Data Collection and Analysis Related to Post Level Term Mortality & Lapse Experience

I. Background

The Society of Actuaries is interested in hiring a researcher to complete a study of U.S. mortality and lapse experience of insurance policies during the Post Level Term policy period. This Request for Proposal (RFP) covers the phases of collecting and validating the data, analyzing the experience and drafting a report describing the results.

This study covers two distinct phases:

  1. A data collection and data analysis phase.  The researcher(s) will work with Society of Actuaries staff and/or a Project Oversight Group (POG) to design the data request, issue a data call, collect and validate data from submitting companies, design data validation checks and rules, and design data reasonableness checks to review the results of this phase; and
  2. A mortality and lapse experience analysis, together with a publication-ready report detailing the results of the analysis.

We will only consider proposals that bid on both of these phases.

II. Project Objectives

Many insurance companies have underwritten individual level term policies, and most of these policies allow for the policyholder to continue coverage at the end of the level term period at a rated guaranteed when the original policy was written. The level premium term is usually between 10 and 30 years. The lapse and mortality experience in the years following the level premium period is a critical assumption for many purposes including but not limited to:  pricing both for the issuing company and for reinsurers, establishment of GAAP benefit reserves and asset adequacy analysis.

The objective for this project is, once usable data has been assembled, to perform an experience study of the post-level term lapse and mortality experience for these level term products. The researcher will be expected to consider the impact that numerous variables, such as gender, original policy term, premium jump etc. have on the resulting post level term lapse and mortality experience. These variables are not intended to be a complete list, but merely as an indication of the types of variables that will be available.

It is expected that the researcher(s) will work closely with the Society of Actuaries staff, and/or the POG in developing the data request and data validation rules, as well as finalizing the issues to be addressed in the study and ensuring that the objectives of the project are met. The researcher(s) will also provide the POG and Society of Actuaries staff with periodic progress reports on the analysis and report development. Members of the POG and/or Society of Actuaries staff will be available to provide feedback and guidance to the researcher(s) as needed.

We anticipate that the data collection phase will take about 5 months after vendor selection, and that the data validation phase would not be complete until about 9 months after selection. Details of the data collection phase follow.

III. Specific Components

Data Collection and Data Analysis

The expected effort of the selected vendor will include the following components:

  1. Work with Society of Actuaries staff, and/or the POG to design a data request, issue a data call and collect the data from submitting companies. The data from submitting companies would need to be consolidated into a single database, with inconsistent reporting from submitters being resolved as part of the compilation of an aggregated database.
  2. Design and implement data validation checks, rules and data validation summary reports. These reports may include counts of syntax and data logic errors along with the distribution of records with various attributes collected in the data (i.e. gender, age, status type, term structure, face amount band etc.).  
  3. Work with the POG and Society of Actuaries staff to resolve issues uncovered during the data validation phase.  The researcher would contact the submitting companies to resolve these data concerns.
  4. Work with Society of Actuaries staff and/or the POG to design and review experience analytics and reasonableness-testing procedures.  Experience analytics will include the calculation of exposures, death counts, crude mortality and lapse rates, actual to expected ratios, etc. 
  5. Work with Society of Actuaries staff and/or the POG to resolve issues uncovered during the reasonableness testing within a short timeframe. 
  6. Mortality and Lapse Experience Analysis and Report

  7. The researcher(s) will analyze the data collected during the data collection phase. The researcher will be expected to prepare a comprehensive analysis using current experience analysis techniques (that will likely include the use of Predictive / Descriptive Analytics) to determine which variables are most indicative of post level term mortality and lapse experience. The findings should be summarized in a report suitable for publication on the Society of Actuaries’ website.
  8. Work with the POG and Society of Actuaries staff to design the report, complete the data analysis and prepare the final report. The POG will help provide guidance and a peer review of the process and report. 
  9. Maintain a rigorous time schedule and other specifications as detailed in the requirements documents.  Some of the key milestone dates for the project are as follows:
    • Data collection period 12/1/18-4/30/2018
    • Availability of comprehensive database and subsets  8/31/2019
    • Draft report  12/31/2019
    • Report published  3/31/2020         
  10. Help prepare, review and potentially present to external audiences material to be included in the final report.

IV. Funding

The vendor will be selected based on a comparison of costs and services included, as well as the POG’s comfort with the ability of the vendor to complete the project. Funding will be provided by the Society of Actuaries.

V. Schedule for Proposal

Proposals must be received no later than 9/30/2018 (a notice of intent to submit a proposal is requested by 9/10/2018).  The proposal to be funded will be selected by 10/31/2018.  The POG will select the proposal to be funded in consultation with the Society of Actuaries after review and evaluation.

VI. Vendor Requirements

Only qualified vendors should present a proposal.  Qualified vendors will have actuarial knowledge of analyzing life insurance mortality and lapse data, and familiarity in conducting experience studies.

We will give preference to proposers that have past experience in working with post level term experience data. Proposers who work for reinsurers will be considered only if they can demonstrate that they can perform the duties required by the study without any bias. 

VII. Proposal

To facilitate the evaluation of proposals, the following information should be submitted:

  1. An outline of the approach to be used for working with the SOA and/or the POG to collect and validate the data. Note any special considerations or limitations in achieving the project objectives.
  2. Estimates can be in the form of a guaranteed total fixed cost, guaranteed cost per unit of work (such as per contributor, per plan, per insured, etc.), or a set of hourly rates for the personnel expected to do the work.  If the estimate is in the form of hourly rates, time estimates for each hourly rate level and a range of total expected costs should be included.  Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal.  While cost will be a factor in the evaluation of the proposal, it will be closely weighed against the ability of the vendor to meet to requirements in section IV.
  3. Feedback and input on the process and time schedule provided in section III.
  4. The proposal should be accompanied by an overview of the proposing organization and brief resumes of key staff to be involved in the compilation of the data.  Note any experience on similar studies or background that would be valuable to the effort.  The person submitting the proposal must be authorized to speak on behalf of the firm or institution on whose behalf the proposal is submitted.
  5. Procedures for keeping the contributing company and the data confidential. 
  6. Any other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.

VIII. Expected Project Deliverables

The project deliverables include a research report detailing the findings of the mortality and lapse experience analysis.

IX. Selection Process

The Society of Actuaries is responsible for reviewing and evaluating the proposals.  The Society of Actuaries, represented by Mervyn Kopinsky, Experience Studies Actuary, will provide staff support.  Input from other knowledgeable individuals also may be sought.

The proposal evaluation will be based on a comparison of costs, services provided and other relevant information as described in Section VII above.

X. Notification of Intention to Submit Proposal

If you intend to submit a proposal, please send written or electronic notification by 9/10/2018.  This will allow us to create a list to distribute additional information and answer questions to all interested parties.  Please send your notice of intent to:

Korrel Rosenberg 
Research Associate
Phone: +1-847-706-3567

XI. Questions

Any questions regarding this Request for Proposal should be directed to:

Mervyn Kopinsky 
SOA Experience Studies Actuary 
Phone: +1-847-706-3571

Questions and responses to questions will be sent to all parties who have indicated the intent to submit a proposal as noted in X above.  Only those who have made a notice of intent will receive this distribution.

XII. Submission of Proposal

If submitting a proposal, please send an electronic version (e.g., Word Document) if possible, or two (2) hard copies of the proposal to Korrel Rosenberg at the above address.

Proposals must be received no later than 9/30/2018.

XIII. Project Monitoring

The POG and the Society of Actuaries staff will be responsible for oversight of the progress of the experience study.  A Letter of Agreement between the selected vendor and the Society of Actuaries will specify the deliverables, key dates, progress expectations and a payment schedule.

XIV. Conditions

The selection of a proposal is conditioned upon and not considered final until a Letter of Agreement is executed by both the Society of Actuaries and the researcher.

The Society of Actuaries reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available.

The Society of Actuaries plans to hold the copyright to the research and to publish the results with appropriate credit given to the researcher(s).

Submitted responses to this RFP become the property of Society of Actuaries.  The Society of Actuaries reserves the right to use any and all ideas included in any response without incurring any obligations to the responding individual or entity.  The Society of Actuaries also reserves the right to redirect the project as is deemed advisable.

The Society of Actuaries may choose to seek public exposure or media attention for the research.  By submitting a proposal, you agree to cooperate with the Society of Actuaries in publicizing or promoting the research and responding to media requests.

The Society of Actuaries may also choose to market and promote the research to members, candidates and other interested parties.  You agree to perform promotional communication requested by the Society of Actuaries, which may include, but is not limited to, leading a webcast on the research, presenting the research at an SOA meeting, and/or writing an article on the research for an SOA newsletter.

It is intended that the data and summary reports for this project can only be used for the purpose of this project and study, the next cycle of this study performed by the Society of Actuaries, or for table development performed by the Society of Actuaries. It cannot be shared with any other party or used for any other purposes other than for completing the deliverables for this project and study without the Society of Actuaries’ written permission. The Society of Actuaries will require that the original data submitted for this project be destroyed after a reasonable period of time following the publication of the study.

You must be able to meet any laws and regulations required to accept and handle any personally identifiable information (PII) or protected health information (PHI) that may be requested in the data request or ensure that the data request is structured in a manner such that no PII or PHI will be received. The Society of Actuaries will not accept or be able to receive any PII or PHI in connection with this project from you.  Any data passed to the Society of Actuaries from you must be aggregated or translated in a manner to remove any PII or PHI