Description: This paper proposes a hypothesis that the negative public policy implications of durational rating strategies in the medical insurance market are caused by lack of prefunding of durational deterioration of experience and constitute a failure to maintain an important part of the original insuring promise. To solve the problem, a practical and simple reserving basis is proposed as a regulatory standard. Discussions of this paper are included.

Description: Presented at October 1985 Annual Meeting. Discusses 3 papers: 'Report on Reserve Standards for Individual and Group Health Insurance Contracts' by the AAA Committee on Health, 'Reserve Principles for Individual Health Insurance' by the Committee for Accident and Health, and 'Structure for Consideration of Health Coverage Valuation Standards' by an NAIC Health Subcommittee of Standing Technical Advisory Group.