Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Design & Pricing > Stop Loss > Flashcards

Stop Loss Flashcards

1
Q

Stop Loss Insurance

Specific Stop-Loss

A

Covers plan’s exposure to large losses per member

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Stop Loss Insurance

Aggregate Stop-Loss

A

Covers large losses of the entire plan not otherwise covered by SSL

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Stop Loss Insurance

Minimum Attachment Point

A

Protects carrier against antiselection if there is substantial decrease in enrollment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Stop Loss Insurance

Aggregate Corridor

A

Plan’s maximum net possible loss

  • Gap between expected claims and aggregate attachment point
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Stop Loss Insurance

Stop Loss Insurance Business Functions

A
  • Marketing/Sales/Distribution
  • Stop-Loss Underwriting
  • Policy/Claims Admin and Reporting
  • Policy Compliance
  • Risk-Taking
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Stop Loss Insurance

Key Variables Within Stop Loss Insurance

A
  • Benefits Covered
  • Contract Basis = “Incurred/Paid”
  • Known vs. Unknown Risks = Lasers
  • Maximum Liability Covered by SLI (ASL)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Stop Loss Insurance

Specific Stop Loss Variations

A
  • No Laser Guarantee
  • Aggregating Specific = Plan retains risk for aggregate amount above specific deductible
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Stop Loss Insurance

Aggregate Stop Loss Variations

A
  • Attachment Point below 125%
  • Aggregate-Only SLI
  • Attachment Point below 100% = retained corridor
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Stop Loss Insurance

Optional Features of Stop-Loss Products

A
  • Advance Funding
  • Specific/Aggregate Accommodation
  • Specific Reimbursement
  • Terminal Liability Option = add runout protection
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Stop Loss Insurance

Specific Stop Loss Premium Rates: Steps

A
  1. Collect claims and exposure data
  2. Adjustments to claim amounts (trend, common benefits)
  3. Create CPD
  4. Calculate Specific Base Claim Rates
  5. Adjustments (group, benefit plan, contract provisions, cost controls)
  6. Expense/Risk Loading
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Stop Loss Insurance

Reasons to Use Manual to Calculate Attachment Point

A

Typically based on group’s experience

  • Small group w/o 100% credible data
  • Benchmarking
  • No experience available
  • Determining adjustments for changes in benefit plans
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Stop Loss Insurance

Aggregate Premium Rates: Development

A
  1. Run Monte Carlo Simulation (# of EEs, agg. factor, SSL deductible, agg. benefit limit)
  2. Premium = Risk % * Expected Claims
  3. Load for Expenses/Profit
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Stop Loss Insurance

Process Risk

A

Potential variations of actual claims vs. expected

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Stop Loss Insurance

Parameter Risk

A

Potential for stop loss UW to misestimate the expected claims

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Stop Loss Insurance

Specific Stop-Loss UW Considerations

A
  • Eligibility/Enrollment Information
  • Underlying plan design
  • Competition
  • Past SL experience
  • Known loss data
  • Data Quality
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Stop Loss Insurance

Advantages of Lasers (Carrier and Self-Insured)

A
  • Stop Loss Carrier
    • High cost claimant remove from risk pool
  • Self-Insured Plan
    • Lower SL Premium
17
Q

Stop Loss Insurance

Disadvantages of Lasers (Carrier and Self-Insured)

A
  • Stop Loss Carrier
    • Premium could be higher if member is included
  • Self-Insured Plan
    • Plan may be better off without laser if carrier underestimates actual liability
18
Q

Stop Loss Insurance

Disadvantages of Aggregating Specific (Carrier and Self-Insured)

A
  • Stop Loss Carrier
    • Less being covered and lower potential profit
    • More complexity
  • Self-Insured Plan
    • Plan is taking additional risk
19
Q

Stop Loss Insurance

Known Loss Underwriting Approachs

A
  • Add expected liability into premium calculation
  • Modify risk margin
  • Add laser
20
Q

Stop Loss Insurance

Reserving Methods for Specific/Aggregate Stop Loss

A
  • Specific
    • Completion Factors
    • Loss Ratio
  • Aggregate
    • Policy YTD
    • Loss Ratio
21
Q

Stop Loss Insurance

Stop Loss Filing

A
  • Form Filing = Contract documents
  • Rate Filing
  • Actuarial Memorandum
    • Description
    • Rates = sound and reasonable
    • Anticipated LR and MLR compliance
    • Certify that filing is compliant with law

Design & Pricing (64 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions