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F101 Mnemonics > Lists > Flashcards

Lists Flashcards

1
Q

Application of Risk Adjustment
(PROBE)

A

Provider profiling
Risk management
Outcomes of health care measurement
Budgeting (Pricing)
Efficiency measurement

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2
Q

Characteristics of a good model
VARIABLE CRISP CARD

A

Valid
Adequately documented
Rigorous
Inputs to parameter values appropriate
Arbitrage free
Behaviour reasonable
Length/expense of run not too long/high
Easy to understand

Communicable re workings & output
Reflects risk profile of contracts modelled
Independent verification of outputs
Sensible joint behaviour of variables (dynamics)
Parameters allow for sign features

Clear results
A range of implementation methods
Refineable
Developable

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3
Q

Assumptions Required
RIM PINT CREW

A

Risk discount rate
Investment returns
Mortality / Morbidity rates

Profitability requirements
Inflation
New business volume & mix (demographic, financial)
Tax rates
Commission
Reserving basis
Expenses
Withdrawals

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4
Q

Product Design & Pricing - Go to
CRUDS CA

A

C - Customer acceptability (clear in benefit, amount and variability of prems)
R - Regulator requirements
U - Underwriting methodology
D - Distributors needs
S - Systems and other internal constraints

C - Company culture in style & price —> consistency with other products
A - Adequate profitability/ return on capital

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5
Q

GLM: Suitability of explanatory variable

A
  • Relationship with the response variable
  • Quality of Data
  • Quantifiable in a discrete way
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6
Q

GLM: Disadvantages of One-way analysis

A
  • looks at effect on frequency and severity of each rating factor separately
  • it ignores correlation and interaction effects between variables, for e.g. age and disease
  • as a result, may underestimate/ overestimate the effect of variables correlated to one another
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7
Q

GLM: Assumptions of classical linear models

A
  • error terms are independent and come from a normal distribution
  • mean is a linear combination of the explanatory variables
  • error terms have a constant variance
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8
Q

GLM: Drawbacks of the normal model for multiple linear regression

A
  • assumes that the response variable, Y, has a Normal distribution which may be not true for the variable being modelled
  • assumes constant variance, which may not be appropriate for the variable being modelled
  • adds together the effect of different explanatory variables, seldom practical
  • with more than two explanatory variables, a manual solution becomes increasingly long winded.
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9
Q

GLM: GLM addresses some of the linear modelling shortcomings/ Benefits of GLM

RL SCAAH

A
  • Response variable can take any distribution from exponential family
  • Link function introduced:
  • removes the assumption that the effects of different variables must simply be added together.
  • Stable transitions between levels of risk
  • Control over interactions considered
  • Assess different combinations of explanatory variables
  • Accounts for the effects of other explanatory variables in calculation of effects sizes
  • Handles risk cells with small volumes, uses all data
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10
Q

GLM: Characteristics of a Link Function

A
  • It must be both differential and monotonic
  • Usually include; log, logit and identity functions
  • Log link function is of particular interest in pricing —> used for results in a model where the effect of different rating factors are multiplied together
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11
Q

GLM: Properties of the exponential family

A
  1. Distribution is completely specified in terms of mean and variance
  2. the variance of Yi is a function of its mean
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12
Q

GLM: The Tweedie distribution

A

Direct modelling of pure premium or incurred loss data for PMI business is problematic
A typical pure premium distribution will consist of a large smile (i.e. a point mass) at zero (where policies have no claim)
And then a wide range of amounts (where policies have had claims)

Tweedie dist. can handle this well

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13
Q

GLM: Pitfalls of using GLM vs One-Way

A
  • if influential points affect coefficients, the impact spreads beyond the single cell that the influential point lies in
  • potential for model error if not specified correctly
    -requires some statistical understanding to be able to use
    -might not capture correct shapes of relationships
  • one-way may call out areas of concern that might be overlooked
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14
Q

GLM: Methods for testing the appropriateness of model

A

Deviance residuals - measures the distance between the observation response & the fitted values

Standard Pearson - the difference between the observation response & the predicted value, adjusted for the standard deviation of the predicted value & the leverage of the observed value.

Residual plots - plots of residual against fitted values, which should be symmetrical about the x - axis & fairly constant across the width of fitted values & average residual of zero

Cook’s distance - used to test the influence of a data point in models results, if cook’s distance >=1 should be investigated —> excluded or capped

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15
Q

What determines the cover limit
(SCR T)

A

Size of scheme - no. of lives covered

Compulsory or Voluntary membership

Required take up rate/ proportion taking up cover if voluntary

Total & average sum insured

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16
Q

Data sources
PROMOTAR

A

P - population data (provided by government)
R - reinsurer’s data
O - own data of company
M - Market data (including insured lives data and published returns)
O - overseas data
T - trade magazines
A - actuarial consultant’s data
R - rate table software

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17
Q

Data Challenges

A
  • Outdated
  • Contain errors
  • Incomplete - missing entries
  • Not sufficient to be divided into credible homogenous groups (SA, Occupation, location)
  • Not enough data points
  • Not available by various types of risk cells
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18
Q

Aims of Managed Care

A
  • Manage claims costs (Reduce it)
  • Maintain/ improve quality health care
  • Provide insurer with some control over HC service providers through provider networks
  • Reduce unnecessary utilisation
  • Manage high risk members
  • Ensure medical services are provided in an appropriate setting
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19
Q

Risks of managed care

A
  • Provider networks restricts access to care (lower utilisation)
  • Providers may resent external parties imposing clinical protocols on them and influencing the way they practice medicine
  • Protocols used unfairly:
    —> May compromise the quality of care provided by encouraging under servicing of clients
  • The use of formularies and other financial based managed care incentives may result in additional costs being transferred to ph with no overall cost reduction
  • Biases and discrimination ( selecting healthy and young lives)
  • Price, intensity, severity, frequency & actuarial risk due to managed care.
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20
Q

Examples of managed care techniques/ strategies
TRRRP HCF

A

T - Treatment protocols —>governs the treatment & medicines that a member gets access to for certain conditions

R - Reimbursement methods

R - Risk sharing i.e co-payment

R - Referrals (GP to Specialist) —> will only cover the full specialist fee if referred by GP to reduce unnecessary specialist visits

P - Provider networks

H - Hospital pre-authorisation

C - Cases and disease management

F - Formulary medicines (generic medicine)

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21
Q

Characteristics of provider networks

A

Negotiated prices
Insurer has better control on procedures taken I.e. treatment protocols
Able to monitor data
Able to check efficiency of each provider
Minimise fraud
Able to incentivise provider for not being wasteful/ for being under budget
Policyholders may not have access to provider networks, leading to a decrease in sales
Value add services

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22
Q

Considerations when deciding on the risk factors:

A

Data easily obtainable

Objectives of factors chosen

Verifiable data

Not politically sensitive

Cognisant of particular features of the country

Parsimonious (captures as much information as possible in a few as possible features)

Balance between demand-side and supply side factors

Relevant & up-to-date

Inexpensive to collect relevant data

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23
Q

Case mix

A

Is a special case is risk adjustment
Used to compare treatment costs
Case mix reflects the severity of each case on a risk-adjustment

24
Q

Risk prediction

A

Used to predict future costs
With reference to differences observed in the past

25
Q

Risk Adjustment

A

Normalizes populations according to specific risk factors

Is applied to historical data

26
Q

Common risk-adjustment factors
DCH SAS

A

Demographic:
- Age
- Gender
- Race and ethnicity

Clinical:
- Acute clinical stability
- Principal diagnosis
- Severity of principal diagnosis
- Co-morbidities
- Extent & severity of co-morbidities
- Physical functional status
- Cognitive status
- Mental health
- Chronic disease prevalence
- Treatment protocol
- Hospital admissions

Health related behaviours and activities:
- Tobacco use
- Alcohol use
- Use of illicit drugs
- Sexual practices (safe sex)
- Diet & nutrition
- Obesity & overweight

27
Q

Common risk-adjustment factors
DCH SAS

A

Socio-economic factors:
- Familial factors & household composition
- Educational attainment, health literacy
- Economic resources
- Employment & occupation
- Housing & neighbourhood characteristics
- Health insurance coverage
- Cultural beliefs & behaviours
- Urban/ rural split
- Proportion of the population insured

Attitude & perception:
- Overall health status & behaviours
- Religious beliefs & behaviours
- References & expectations for health care services

Supply side factors
- Specialist facilities eg diagnostic equipment such as MRIs
- Number of high care (HC) and ICU beds
- Number of clinics
- Specialists facilities

28
Q

Why the Cashflow approach is preferred to a formula approach

DIRE CART

A

D - Discontinuance can be explicitly included
I - Investigates sensitivity of profits
R - Reserves and solvency requirements can be explicitly allowed for
E - Expected return on capital can be measured (In ST can assume that capital needed can be borrowed at the discount rate used)

C - Complex model structures e.g. UL & OG possible
A - Assumptions that vary over time easier to incorporate, also stochastic assumptions
R - Risk discount rate can take into account the term structure of interest rate
T - Timing of events eg claims can be more properly included

29
Q

Drawbacks of Formula Approach
VATICN

A

V - Variation of assumptions over time
A - Accumulation of reserves
T - Timing of events
I - Independent inspection of claim or premium cashflows
C - Capital needs
N - Net negative cashflows

30
Q

Modelling Framework

A
  • Purpose of the Model
  • Data points or model points
  • Assumptions (deterministic/stochastic
  • Parameters —> dynamic interaction
  • Simulation and projection of cashflows
  • Discounting: valuation interest rate, risk discount rate reflects the level of risk of the cashflows
  • Sensitivity tests
  • Or other considerations such as premium & charges meeting the profit target and marketability
    —> adjustments of profit targets
  • Scale up MPs for expected business mix
  • Profit: on individual policy level or aggregate
  • Profit matrix: NPV, profit margin = NPV profits/ disc(Premiums), IRR, or DPP; profits results compared to these
  • Premium level & expense loadings adjusted until target profit level achieved
31
Q

Uses of models
**SAAAPVP*

A

S - Sensitivity analysis or assessment of variance
A - Assessing return on capital
A- Assessing a suitable investment strategy
A - Assessing the profitability of existing business
P - Pricing
V - Valuing liabilities
P - projecting future supervisory solvency position (Dynamic Solvency Testing)

32
Q

Advantages of case estimation

A
  • Makes use of all known data on o/s claims
  • Considers qualitative factors that may affect amount
  • May be more reliable than statistical methods in certain cases
33
Q

Disadvantages of case estimation

A
  • Cannot be used to produce estimates for claims that have not been reported (incurred or not)
  • Relies on skill and judgement of claims manager
  • Managers may be naturally conservative/ optimistic
  • May not use consistent rates of inflation
  • May be biased to the lower end of used for negotiations with the claimant
  • Difficult to check
  • Expensive and inefficient if there are many o/s claims
  • May be produced by outsiders who don’t have access to all data on claims
34
Q

Pricing Framework - Individual business

A

Choose a base period over which to collect claims and exposure
— Volume
— Detail
— Trends
— Relevance
— Unknowns

Collect and check the data
— Mention data source and relevance & credibility
— Information collected

Split data into homogenous groups
— Using risk factors

Calculate the burning cost premium for each group
- BCP = average claim amount x claim incidence rate

Analyse the data
— To identify trends

Adjust the base values: base experience may be different from expected experience
— Unusually light/ heavy experience
— Large or exceptional claims
— Trends in claim experience
— Change in risk
— Changes in cost of reinsurance
— Seasonal variation in claims
— Incomplete claims
— Changes in agreements with suppliers

Project the base values
— Adjustments
— Claims inflation
— Future Trends
— Changes in benefit
— Medical innovation and technological
— Changes in professional fees, cost of medical treatment and pharmaceuticals
— Changes in behaviour of healthcare professionals (e.g. trends towards prescribing more expensive treatment)
—Introduction of provider network and manages care arrangements
— Changes in disease profile and impact on HIV/ AIDS
— Impact of regulatory changes eg. Prescribed minimum benefits
— Impact of demographic profiles eg age profile and family composition

35
Q

Risk premium —> Office Premium

A

Total risk premium: The total risk premium for a class (group) of ph can be found by summing the individual risk premiums for each benefit/ procedure

Risk premium (age, gender) = sum(ik * ACk)

— Profit margin / profit requirement by company
— Setting assumptions - with margins
— Modelling
— Model points creation —> represents expected NB / mix of lives
— Cashflow projection for each MP
- Benefit/ claim amount
- Renewal assumptions
- Utilisation assumptions
- Expenses [acquisition and renewal, claims]
- Commission
- Development costs
- Net projected cashflows discounted at a rate of interest
- Risk discount rate that accounts for:
— Required return by company (net of tax)
— Level of statistical risk of each cashflow
- Reserves
- Solvency margin
- CoC
- Tax
- Margins
- Sensitivity testing

36
Q

Types of reinsurance

A

Proportions
- original terms reinsurance (co-insurance)
— Deposit back
— Quota share
- Risk Premium reinsurance
- Coinsurance using Level Risk Premium

Non- proportional
- excess of loss (XoL)
— Risk basis - Individual Surplus
— Occurrence basis - Aggregate losses
— Stop loss - cap loss arising in a period
— Catastrophe reinsurance

Financial Reinsurance

Retention limit: is the maximum amount of risk retained by the cedent on any individual risk

37
Q

Considerations by an insure for setting up a retention limit

A

Average benefit level for the product & expected distribution of benefit

Risk appetite

Level of free assets & importance attached to stability of its free asset ratio

Terms on which reinsurance can be obtained

Level of familiarity of the insurer in underwriting the product

The on insurers regulatory capital requirement of increasing or reducing the retention limit

The existence if profit sharing arrangement

The insurers retention limit on its other product

Nature of future increases in sum assured

38
Q

Fund Protection

A

Fund protection refers to the underlying unit fund not being used to fund benefits and insurance benefits are payable from the non- unit fund.

The greater the level of fund protection the greater the liquidity risk.

39
Q

Characteristics of policies from different distribution channels consider the following:
DTHC

A

D - Demographics: age, gender, geographical area

T - Target market: Individuals( includes retired, anti-selection) or group (generally work-force, worksite health services, wellness programs and days to raise awareness)

H - Health status: healthy or in poor health

C - Class / socio economic status: upper class more knowledge on product, knows when to claim, has access to health care providers

40
Q

Bases in which the private healthcare provision can co-exist with the State Provision:
OA OC CA CC

A

Optimal Alternative: Private healthcare insurance can be purchased on an optional basis. Those with private health insurance only utilise private providers.

Optimal Complement:
Some basic service provided by the state; the rest needs to be paid for, and can optionally insure for these.

Compulsory Alternative:
State resources only available to some (I.e the indigent), the rest need to purchase health insurance and access private resources

Compulsory complement:
Certain services provided by the state, all others privately and those who can need to take out insurance for this.

41
Q

State Provision: Resource allocation

A

Cost analysis:
Asses the cost of various healthcare systems providing services

Cost-effective analysis:
Assesses cost of healthcare systems relative to the non-monetary benefits

Cost-utility analysis:
Assesses the relative to changes in quality of life (quality)

Cost-benefit analysis:
Puts monetary value on the cost of the healthcare and its outcome. Allows for direct comparison between cost and outcome.

Willingness to pay:
Used to measure the value an individual places on a health care system.
Determined through:
1. Direct method - through questionnaires/ interviews
2. Indirect method - observing behaviour and identify how much individuals may be will to pay for treatment)

42
Q

Methods and considerations of State health benefits provision
MPL RAD

A
  • Means testing
  • Provision of treatment/ services
  • Lump sum cash payment
  • Regular income
  • Amount of benefit
  • Differenriation
43
Q

Objective of the state
PSBP

A

Protect the nation’s health
Subsidise/ support the poor
Balance the budget
Political promises + follow social culture

44
Q

Strategies to achieve the objectives of the state

A

Promote self-provision
- Tax relief on premiums
- Subsidise providers
- Exclusions from state provision

Provide
- means tested cover
- reduce non-essential benefits via own hospital
- lumpsum
- different life stages
- Illness

Use managed care

45
Q

Challenges the State may face:

A

Demographic challenges - ageing population

Technological challenge - very costly

Challenges of Sisyphus - increase life expectancy (medical advances), increase in future demand of health care, increased costs

Burden of disease - demand of care

Medical professions - leaves the count ny

Infrastructure

Competition -budget
competing needs failure

Fraud

46
Q

PMI specific risk mitigations

A

Benefits limits
Exclusions
Cost reduction:
- Treatment protocols
- Formularies
- Preferred Provider Networks
Co-payments
Deductions - is a specific amount you must spend in a year before your insurance policy pays for some or all your claims
Negotiate fees & fixed payments
Pre-authorisation
Case management
Preventative measures
Attract younger & healthier lives - if prems are not risk rated
Utilisation reviews
Medical savings account

47
Q

Risk Mitigation Actions
(think product cycle) or equation of

A

Matching (NUTC) - Long-term products

Distribution:
- support brokers to improve sales
- expand sales channels
- change remuneration strategy to improve client retention
- promote cross sell and upsell

Retention activities:
- improve customer experience
- engage more with customers

Consider exit some lines of business

Premiums:
- increase premiums for additional risk for NB
- move to reviewable premiums —> balance with future reputational risk
- may be difficult to increase NB sales and premiums due to affordability in a bad economic climate
- Repricing policies

Management expenses:
- Ensure that earnings (profit before tax/ NAV) & capital viable medium to long term
- perform expense analysis to identify the expenses that need to be managed

Invest in automation & digital self- servicing to meet needs to save co

More frequent reporting:
- focus on key risk metrics
- Expertise
- Pricing
- Model risks

Underwriting to prevent anti- selection:
- increase vigour
- start applying

Introduce exclusion clauses on NB (but may have reputational risk)

Reinsurance cover;
- financial reinsurance
- expertise
- pricing
- model risk

Increase claims underwriting to eliminate invalid claims

Add extra profit margin

Limit maximum sum insured offered

Limit number of policies sold, hold back on marketing spend

Ensure that you may have a very quick feedback loop on the claims experience

Ability to monitor experience by relevant factors

Use longer waiting periods to reduce anti-selection

Clearly define benefit in policy document and marketing material

48
Q

Risks
Rates (claims inception, mortality, average claim size)

A

Model risk
- Risk underlying model is not adequate
Parameter risk
- Depends on adequacy and appropriateness of data
- Parameter used may not reflect future even though model might be appropriate
- Possibility of new diseases or advances in medical treatment

Random fluctuation risk
- unpredictable fluctuation arising from sample error
- heterogeneity of data
- numbers of exposed to risk in data may not be large enough for law of large numbers to apply

Severity risk
- risk of average claim exceeding expected value

Sources of uncertainty for average claim amount:
- changes in cost of medical treatment (medical innovations, advances in tech, currency fluctuations)
- changes in lifestyle prevalence of medical conditions
-changes in policyholder or medical professional behaviour
- poor claims control and fraud
- introductions of claims management process
- ageing population - greater demand for HC treatment
- new diseases or epidemics
- hospital capacity changes
- pricing agreements are renegotiated

Policy data & other data
- accuracy

Claims:
- frequency
- amount
- anti-selection (especially for indemnity products)

Assumptions:
- mortality (base & improvement) & morbidity

49
Q

Other risks

A

Investment performance:
- risk that investment returns are lower than expected & provided for in the pricing
- future investment ( re-investments or investment return assumption not consistent with inflation)

Expenses & expense inflation
- higher then expected
- expense inflation (CPI + medical + salary)
- initial expenses not recouped, early withdrawals or non-renewals

Withdrawals:
- due to affordability etc
- risk at early duration when asset share is negative
- selective withdrawal —> worsening of the mortality experience of in-force business
- may invalidate assumptions esp selective withdrawal on mortality, CI incidence, PMI sickness)

New business mix by nature size of contract and source
- demographic and expense experience may differ and invalidate these assumptions.

New business volumes:
- need to cover overheads (if not volumes —> can’t cover overheads)
- too much —> not enough capital

Guaranteed and options

Competition/ competitive pressure

Actions of the board of directors or staff

Actions of distributors + mis selling risk

Operational risk
- Failure of appropriate management systems & controls
- Dominance of individual
- Reliance on third parties
- Reputational risks

Counterparty risks
- reinsurance
—
- derivatives
- corporate bonds
— loss of investment returns
— deteriorating credit rating
- - higher Borrowing costs
— increase in capital requirements for investments with worsening credit rating
- counterparties in provision of medical services
— risk of ultimate claims cost lies in the hands of the third party provider
- outsourcing services may be below standard
— extra costs for the insurer
— e.g administrators or underwriters

Legal

  • legal action & having to pay large compensation to ph
  • reputational risk

Regulatory
- how products can be sold, nature of benefits
- risk that new regulation may apply to policies already in force and change nature of contract
— eg change in supervisory regulations such as prudent prescribed valuation basis could cause large increases in reserves (valuation strain) and the risk of supervisory insolvency

Fiscal developments
- State decides to offer services for free, for all
- Make it compulsory
- Risk that tax changes may be introduced that change the probability and coverage of existing contracts

Fraud

Aggregation and concentration of risk including credit failure
- Risks arising for group business or geographical concentration —> removes independence of risks

Earlier screening or diagnosis or medical improvements
— advances in medical science means that claims incident may increase
— CI windfall claims
— lead to prolong to life, delaying time of death, leading to more claims paying out
- Cost of treatment may increase
- Increased encouragement of screen —> increasing claims incident rates & increasing the cost of treatment and PMI 

50
Q

Distribution channel counterparty risk

A
  • commit to new conditions
  • delay premium or claim payments
  • bring insurer to disrepute
  • encourage business to lapse and re-enter where there are no clawback arrangements
  • taking advantage of loopholes in product design, eg. With risk classification where the insurers’ non-smoker/ smoker definitions may allow some variation in interpretation
  • stop selling your business and you have no alternative routes available through which to make sales
  • mid-selling products lead to poor persistency and damage to reputation
51
Q

The principles and main areas to be addressed when setting reserving basis (assumptions) (LTCI)

A

A prudent basis, rather than best estimate should be used with appropriate margins for adverse deviations.
Regulatory requirements need to be taking into account.

Interest rate
- Take account of currency
- Regard to yields on existing assets
- Regard to yield in sums to be invested in the future
- Credit/default risk
- Term of the liabilities
- A low rate is prudent

Mortality
- Need to consider mortality both pre and post claim
Pre claim
- Take account of sex and age
- Underwriting policy
- Territory of insurance
- A low rate of mortality is prudent.
Post claim
- Factors as above:
- Take account of sex and age and extent of impairment
- Duration of claim (note this is for active lives) NB: Cause not required as this is for active lives
- Source of data eg published statistics
- A low rate of mortality is prudent.

Morbidity
Consider both prob of claim and claim recovery rate ( prob very low)
Pre-claim
- As of mortality:
- Take account of sex and age
- Underwriting policy
- Territory of insurance
- Occupation class
- A high rate of incidence is prudent
Post claim
- As per pre claim
- Extent of impairment
- Duration of claim (note this is for active lives) NB: Cause not required as this is for active lives
- Source of data eg published statistics
- A low rate of recovery is prudent

Expenses
- Gross valuation so would look to allow for expenses in line with best estimate plus margin
Allow for:
- product design features
- territory
- claim costs
- administration costs
- commission
- need to allow for future inflation. Should be based on analysis of recent experience

52
Q

12 Principles of setting statutory or solvency reserves

A
  1. The reserves should cover all liabilities arising from all contracts
  2. The reserves should be calculated prudently, allowing for all relevant liabilities
  3. Take credit of future premiums if these are contractually due
  4. Valuation should be prudent, not best estimate, so basis should contain margins
  5. The valuation is the liabilities should be consistent with the asset valuation.
  6. Appropriate approximations or generalisations may be allowed
  7. Interest rate used for calculating reserve should be chosen prudently, taking into account currencies, yields & reinvestment yields on the assets
  8. The demographic, persistence, and expense assumptions used should all be prudent, but the expenses can be on an ongoing basis.
  9. The valuation method itself defines the amount of expenses assumed (e.g. premium method) then the amount implied must be no less than a prudent estimate of the relevant expenses.
  10. Evolution calculations conducted overtime should not suffer discontinuities arising from arbitrary changes to the basis
  11. The evolution method used should recognise the emergence of profits appropriately over the policies lifetime
  12. Valuation basis and method should be disclosed
53
Q

Risks in managed care that can be transferred between funder and the provider

A
  1. Price risk
  2. Severity risk
  3. Intensity risk
  4. Frequency risk
  5. Actuarial and marketing risk
54
Q

Contract Design Factors

AMPLE DIRECT FACTORS

A

Administration
Marketability
Profitability
Level and form of benefits
Early leaver benefits
~~~

Discretionary benefits
Interests and needs of customers
Risk appetite of the parties involved
Expenses vs charges
Competition
Terms and conditions of contract

~~~
Financing (capital requirements)
Accounting implications
Consistency with other products
Timing of contributions or premiums
Options and guarantees
Regulatory requirements
Subsidies (cross)

55
Q

Managed care objectives

A
  • Reducing the cost of medical event
  • Improving the quality of care provided
  • Ensuring that the medical services are delivered in an appropriate setting
  • Ensuring that high risk members are managed and receive appropriate care
  • Reducing the number of unnecessary medical services
56
Q

Regulatory Framework for investments of an insurer
TECH SCAM

A

T - Types of assets that can be invested in
E - Extent of mismatching allowed
C - Currency match between assets and liabilities —> Reduce currency risk
H - Hold certain proportion of total assets in particular class eg gov bonds

S - Single counterparty exposure maximum
C - Custodianship of assets
A - Amount of any asset allowed to demonstrate solvency
M - Mismatch reserve

F101 Mnemonics (1 decks)

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