Regulatory Issues in Health Reserving Julia T. Philips, FSA, MAAA Life and Health Actuary Minnesota Department of Commerce

Requirements and Guidance

State Statutes and Regulations Statutory Reporting Minimum Reserve Standards Actuarial Opinion

National Association of Insurance Commissioners Model Laws and Regulations: Standard Valuation Law, Actuarial Opinion and Memorandum Regulation, Health Insurance Reserves Model Regulation Accounting Practices and Procedures Actuarial Guidelines

National Association of Insurance Commissioners Examiner’s Handbook Codification: AP&P Manual with SSAP’s, Appendices Health Reserves Guidance Manual: Draft available on NAIC Web Site

American Academy of Actuaries Actuarial Standards of Practice: ASOP No. 5, ASOP No. 9, ASOP No. 14, ASOP No. 16, ASOP No. 20, ASOP No. 22, ASOP No. 28, ASOP No. 36, and ??? Code of Professional Conduct Qualification Standards for Prescribed Statements of Actuarial Opinion Practice Notes

ASOP No. 5 Revision Timetable Current standard adopted 1991 Revised standard exposed 9/99 Comments were due 3/00 Proposed final revision to be reviewed at ASB 9/00

ASOP No. 5 Revisions New format as of May, 1996 Includes paid claims, not just unpaid Long-term products: cancer, LTC, DI, LTD Not included in ASOP: Settlement expenses, deficiency reserves, and policy reserves.

Regulatory Issues in Health Reserving Conservatism Provider contracts Credibility Follow-up studies Premium deficiency reserves