Misc Additional Cards

Question 1

Statement of Opinion Instructions/Revisions Appendix B - ASOPs relevant to the Health Actuarial Opinion

Answer 1

ASOP 5: Incurred Health and Disability Claims
- Preparing or reviewing financial reports, claim studies, rates, etc

ASOP 7: Analysis of Life, Health, or P&C Insurers Cash Flows
(To Provide Guidance - To Actuaries - Analysing Asset and Liability Cash Flows - Of Insurers)

ASOP 11: Financial Statement Treatment of Reinsurance for Life and Health

ASOP 22: Statements of Opinion of Asset Adequacy Analysis for Life and Health

ASOP 23: Data Quality
- Selecting underlying data, relying on others, reviewing and using data

ASOP 28: Actuarial Opinion Requirements for Health
- Responsibilities for actuaries signing statements of opinion

ASOP 41: Actuarial Communications
- Written, electronic, or oral communications

ASOP 42 - Health and Disability Liabilities Other than for Incurred Claims
- Contract Reserves, Premium Deficiency Reserves, Provider-Related Liabilities, Claim Adjustment Expense Liabilities, etc

GHFV-818-18 - Appendix B

Question 2

ASOP Communications, Disclosures, Documentation, and Data (Simple List for all but 23/41)

Answer 2

1. Communication, disclosure, and documentaiton
   a) Scope, purpose of analysis, and intended users
   b) Assumptions and methods are in compliance with ASOPs 41 and 23
   c) Sensitivity of work to the assumptions
   d) Changes from prior anaylsis
   e) Sources of data
   f) Whether relied on other sources and disclaim responsibility
   g) Effects of adverse selection and recommendations to mitigate impact
   h) Limitations
   i) Unresolved concerns
   j) Retain for a reasonable period of time
2. Data Quality
   a) Refer to ASOP 23
   b) Make effort to obtain more accurate data
   c) Volume (more is more credible)
   d) Identify time period of data
   e) Review of reasonablness
   f) Seasonality
   g) Document any data issues
   h) Sources are:
   i. Account systems and other internal systems
   ii. Claim and utilization data
   iii. Medical records, patient reported dadta
   iv. Population exposure
   v. Consulting firms
   vi. State administered data

ASOP TIA Master List

Question 3

Uses of Approximations for Liability for Future Claims (ALR) - From CIA Education Note on Valuation of Group Life and Health Policy Liabilities

Answer 3

(Saves time because this approach does not require seriatim calculations for each policy)

1. Does the Approximation appropriately provide for all risks?
2. For benefits without interest rate risk, the CALM liability may be approximated
3. UPR may be reasonable appropriation
   a) Ensure it approximates expected claims and expenses
4. Example of an approximate method for LTD future claims
   a) Determine a valuation benefit factor including MfAD
   b) Adjust the valuation benefit factor for pricing inadequacies
   c) Using Projection of Premium, develop claim cash flows (develop premium and multiple by target Loss Ratio)
5. May test representative ages and durations to demonstrate the claim liability is small and can safely be ignored

TIA Video on CIA Education Note

Question 4

Use of Approximations to Determine Future ERR Liability - From CIA Education Note on Valuation of Group Life and Health Policy Liabilities

Answer 4

Some Actuaries hold excess of policyholder liability over statutory as the ERR Liability, adjusted for deficits

When using Approximations, be aware of the following:

a) Differences between policyholder and statutory liabilities due to differences in valuation interest rate or valuation expenses do not contribute to ERR cash flows
b) Does not account for differences between guaranteed interest credited and interest required
c) Does not account for differences between premiums and policyholder charges for retention and claims
d) Does not account for inadequacy of risk charges

TIA Video on CIA Education Note