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Problem Lists Flashcards

1
Q

(17) Parameters to consider in a disability income claims or persistency study

A
  1. Occupation class
  2. Occupation
  3. Policy form
  4. Extra benefits
  5. Age
  6. Duration
  7. Elimination period
  8. Benefit period
  9. Indemnity
  10. Income
  11. Geography
  12. Agent/agency
  13. Sex
  14. Mode of premium payment (annual best, quarterly worst)
  15. Smoking status
  16. Combinations
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2
Q

(18) Considerations in establishing morbidity assumptions for LTC

A
  1. Data sources
  2. Integration of coverages
  3. Reinstatements
  4. Transfers
  5. Coordination with other coverage
  6. Pre-existing requirement
  7. Level of care/charge levels
  8. Area
  9. Policy options and benefit triggers
  10. Age/gender
  11. Marital status
  12. Morbidity improvement
  13. Underwriting
  14. Marketing
  15. Claim administration (care mgmt)
  16. Reinsurance
  17. Regulatory considerations (moderately adverse)
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3
Q

(19) Considerations in pricing LTC

A
  1. Morbidity (list 18)
  2. Investment earnings assumption
  3. Expenses: 13-18% non-commission, 1st year commission high
  4. Voluntary lapses
  5. Mortality: 1994 GAM
  6. Surplus strain/reserves
  7. Profit: takes 7-10 years to emerge
  8. Loss ratio requirements: most states 60% individual (higher grp); NAIC Model Reg removes in favor of certification of rate adequacy - moderately adverse
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4
Q

(21) Medicare Supplement pricing assumptions

A
  1. Morbidity
  2. Mortality (not significant)
  3. Persistency
  4. Investment earnings
  5. Selection factors / underwriting
  6. Age / sex distribution
  7. Smoker vs non-smoker
  8. Area factors
  9. Expenses and taxes
  10. Other considerations
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5
Q

(36) Typical information contained in risk register

A

Register is created to record scenarios and events that have been considered in the risk evaluation

  1. Description of the risk scenario
  2. Details of how and when the scenario was identified
  3. Which corporate goals the scenario affects
  4. Description of the method used to quantify risk exposure and time horizon for modeling
  5. The range of outcomes considered
  6. Outcome of a reverse stress test (conditions that would cause risk capital to be exceeded)
  7. Assessment of gross likelihood and impact (normal/stressed)
  8. Description of mitigation strategies, assessment of effectiveness/cost
  9. Assessment of net likelihood and impact
  10. Assignment of responsibility for monitoring
  11. Details regarding action plans
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6
Q

(38) Characteristics to enter into the risk dashboard for each identified risk

A

Dashboard provides a high-level overview of the organization’s exposure to risk

  1. Brief description of risk
  2. LOB affected
  3. Gross likelihood
  4. Gross severity
  5. Gross risk rating
  6. Control effectiveness
  7. Net likelihood
  8. Net severity
  9. Net risk rating
  10. Tolerance
  11. Net risk rating vs. tolerance
  12. Action plan status
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7
Q

(44) Categories of risk faced by organizations

A
  1. Market
  2. Economic
  3. Interest rate
  4. Foreign exchange
  5. Credit
  6. Liquidity
  7. Systemic
  8. Demographic (Mortality/Longevity)
  9. Non-life insurance risk
  10. Operational
  11. Residual
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8
Q

(45) Types of systemic risk

A
  1. Financial infrastructure
  2. Liquidity (in run on bank)
  3. Common market positions
  4. Exposure to a common counter-party
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9
Q

(46) Types of demographic (mortality or longevity) and non-life insurance risk

A
  1. Level
  2. Volatility
  3. Catastrophe
  4. Trend
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10
Q

(47) Types of operational risks

A
  1. Business continuity
  2. Regulatory
  3. Technology
  4. Crime
  5. People
  6. Bias (deliberate/unintentional)
  7. Legal
  8. Process
  9. Model
  10. Data
  11. Reputational
  12. Project
  13. Strategic
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11
Q

(48) Types of people risk

A
  1. Employment-related
  2. Adverse selection
  3. Moral hazard
  4. Agency
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12
Q

(56) Categories of risk for health insurance companies

A
  1. Environmental
  2. Financial
  3. Operational
  4. Pricing
  5. Reputational
  6. Strategic
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13
Q

(57) Environmental risks for health insurers

A
  1. Buyer environment
  2. Competition
  3. Economy
  4. Fraud (external)
  5. Legal
  6. Regulatory and legislative
  7. Supplier environment
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14
Q

(58) Financial risks for health insurers

A
  1. Asset default
  2. Data
  3. Financial viability
  4. Interest rate
  5. Liquidity
  6. Model
  7. Reinvestment
  8. Reserve adequacy
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15
Q

(59) Operational risks for health insurers

A
  1. Billing and collections
  2. Claims processing
  3. Contract wording
  4. Data technology and management
  5. Fraud (internal)
  6. Human resources
  7. Network management
  8. Reinsurance
  9. Ineffective sales force
  10. Training
  11. Vendor relations
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16
Q

(60) Pricing risks for health insurers

A
  1. Anti-selection
  2. Authority
  3. Competition
  4. Data
  5. Financial viability of capitated providers
  6. Model
  7. Mortality
  8. Regulatory and legislative
  9. Reinsurance
  10. Trend: inflation
  11. Trend: intensity and severity
  12. Trend: technology
  13. Trend: utilization
  14. Underwriting
17
Q

(61) Reputational risks for health insurers

A
  1. Disgruntled policyholder
  2. Rating agencies
  3. Stock analysts
  4. Claims adjudication
  5. Corporate governance
  6. Distribution
  7. Fraud (control measures)
18
Q

(62) Strategic risks for health insurers

A
  1. Capital management
  2. Growth
  3. Incentives
  4. Management failure
  5. Mergers and acquisitions
  6. Network management
  7. Reinsurance
19
Q

(77) Formulas for net tier 1 capital

A

Net tier 1 capital equals gross tier 1 capital minus:
1. Goodwill
2. Intangible assets >5% of gross tier 1 capital
3. Adjusted negative reserves calculated policy by policy and negative reserves ceded to unregistered reinsurers
4. Cash surrender value deficiencies calculated on a grouped aggregate basis
5. Back-to-back placements of new tier 1 capital between financial institutions
6. Each net defined benefit pension plan recognized as an asset on the insurer’s balance sheet net of any associated deferred tax liability
Adjusted net tier 1 capital is net tier 1 capital minus:
1. 50% of deductions/adjustments
2. Deductions from tier 2 capital in excess of total tier 2 capital available

20
Q

(82) Processes included in the ERM control cycle

A
  1. Risks are identified
  2. Risks are evaluated
  3. Risk appetites are chosen
  4. Risk limits are set
  5. Risks are accepted or avoided
  6. Risk mitigation activities are performed
  7. Actions are taken when risk limits are breached
21
Q

(84) Required disclosures for communications subject to ASOP #46 on risk evaluations in ERM

A
  1. The results of the economic capital model, their intended use, and any known limitations of the model
  2. The results of the stress and scenario tests, their intended use, and any known limitations of the model
  3. The methodologies and sources of information for identifying and evaluating emerging risks
  4. Any material changes in the system, process, methodology, or assumptions from those previously used
  5. Significant assumptions used in the risk evaluation and interdependencies among risks and statistical distributions
  6. The risks included in the risk evaluation and their relative significance, as well as known material risks not included and the rationale for not including them
  7. Whether and how the modeled future economic conditions have been reviewed and tested for reasonableness
22
Q

CAST Model Parameters

A
  1. a for active, i for impaired
  2. l for lives: alx and ilx
  3. probability of 1 health life becoming unhealthy with issue age x and duration t is denoted q^(ai)_[x]+t
  4. S for severity: aS[x]+t, iS[x]+t
  5. lapse rates iq[x]+t, aq[x]+t, u involuntary lapse
  6. 0
23
Q

LTC pricing considerations related to expenses

A
  1. Underwriting
  2. Claim administration
  3. Policy administration
  4. Compliance
  5. Actuarial
  6. Marketing
  7. Premium tax
  8. Overhead

GH Specialty (5 decks)

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