Pricing Med Supp

Question 1

Pricing Med Supp

Rating Types

Answer 1

• Issue Age
• Attained Age
• Community-Rated

Question 2

Pricing Med Supp

Premium Increases

Answer 2

Done annually to account for increases in provider payment schedules and utilization changes over time

Question 3

Pricing Med Supp

NAIC Model Regulation

Answer 3

• Rates and supporting documentation must be filed and approved annually
• Must meet 3 LR requirements

Question 4

Pricing Med Supp

Loss Ratios that Must be Met as Part of Annual Filing

Answer 4

• Total Claims / Total Premiums
• Future Claims / Future Premiums
• Expected Third Year Loss Ratio

Question 5

Pricing Med Supp

Items to be Provided in Filing

Answer 5

• Desc. of Policy Benefits
• Desc. of Marketing, UW, etc.
• Historical experience (by duration)
• Projected future experience
• Actuarial certification

Question 6

Pricing Med Supp

Reserving Requirements

Answer 6

• Appropriate Reserves
• Active Life Reserves
• Test Premium Adequacy
• Risk-Based Capital Calculation

Question 7

Pricing Med Supp

Pricing Assumptions

Answer 7

• Morbidity
• Mortality (Not significant)
• Persistency
• Investment Earnings
• Selection Factors/UW
• Age/Sex Distributions
• Smoker/Non-Smoker
• Area
• Expenses and Taxes
• Mode of Premium
• Policy Fee (to cover maintenance expenses)
• Actuarial memorandum and certification