Module 5

Question 1

A plan where the plan
sponsor assumes full
liability for the financial,
legal, and
administrative costs of
the plan.

Answer 1

self insured

Question 2

An alternate

term for “selfinsured”.

Answer 2

self funded

Question 3

An insured group
plan’s premium
surplus or deficit.

Answer 3

experience results

Question 4

An annual process
for insurers to
determine the
premium for the
contract year.

Answer 4

premium rate renewal

Question 5

A renewal method
where the insurer
amalgamates claims
experience for an entire
book of business into
one pool.

Answer 5

fully pooled premium rate renewal

Question 6

A renewal method
where the group’s own
claims experience
determines premium
rates.

Answer 6

prospectively rated premium renewal rate

Question 7

The amount of money an
employer is willing/able
to contribute from
revenue and plan
member contributions to
pay for group benefits

Answer 7

funding sources

Question 8

Determination of who
bears the underlying risk
for paying claims and
expenses for a group
benefits plan.

Answer 8

funding arrangement

Question 9

A fully insured plan
with no risk to the
plan sponsor.

Answer 9

insured non refund

Question 10

A fully insured plan
with some risk to
plan sponsor.

Answer 10

insured refund

Question 11

A financial report
prepared by an insurer
for plans underwritten
on a refund
arrangement.

Answer 11

annual financial accounting report

Question 12

An annual statement
prepared by a contracted
service provider to
reconcile plan sponsor
payments to claims and
expenses plus cash flow
interest for the period.

Answer 12

annual financial accounting

Question 13

Protection against
exposure to large
individual claims.

Answer 13

large amount pooling

Question 14

Protection against
potentially catastrophic
claims that occur with
low frequency. This
applies to the entire
claim.

Answer 14

pooling from first dollar

Question 15

Protection against an
unexpectedly high
level of total claims in
any one contract
period for one benefit.

Answer 15

aggregate stop loss pooling

Question 16

Protection against
financial risk beyond a
specified number of
years for a disability
claim, assumed by the
insurer.

Answer 16

duration pooling

Question 17

The charge paid by the
plan sponsor to the
insurer for assuming the
risk for claims above a
pooling threshold.

Answer 17

pooled premium

Question 18

A fund established by the
insurer from plan
surpluses for the purpose
of offsetting a future
deficit.

Answer 18

claims fluctuation reserve CFR

Question 19

An agreement a plan
sponsor enters into with
an insurer or third party
administrator to
administer a plan, with
financial and legal
responsibility for all plan
costs remaining with
sponsor.

Answer 19

admin services only ASO

Question 20

Projected claims and
expenses paid by
monthly deposits similar
to how premiums are
billed.

Answer 20

billed in advance (budget aso)

Question 21

Claims and expenses are
reimbursed to the insurer
or TPA with a cheque
payment in the following
month.

Answer 21

monthly billed in arrears

Question 22

Reimbursement to an
insurer for claims and
expenses is by automatic
funds transfer from the
plan sponsor’s account,
on the basis of cheques
issued and expenses.

Answer 22

billed in arrears