Description: The table of contents for The Actuarial Practice Forum May 2007 issue.

Description: Index of The Actuarial Practice Forum October 2006 issue.

Description: The March 2009 issue of the Actuarial Practice Forum table of contents.

Description: This paper illustrates the calculation of embedded value of an insurance company. The principles should be applicable to similar calculations for other companies.

Description: This paper describes in detail each of five options available to small Texas employers wanting to purchase insurance for their employees. It then describes the advantages and disadvantages to the various players: carriers, employers, employees, and agents. It points out that each player will act in its own interest.

Description: This paper describes the Federal Income Tax FIT treatment of reserves historically. Then it describes Principles-Based Reserves PBR. Finally, it discusses issues in the treatment of PBR under FIT.

Description: The paper explores developments through 2006 in the application of market-consistent concepts to the measurement of fair values of liabilities for financial reporting purposes.

Description: Enhanced or impaired annuities are life annuities underwritten to reflect annuitants' actual mortality. They are not currently prevalent in the U.S. or Canada, where life annuities assume low mortality and are thus unfair for impaired lives. This paper looks at the present annuity marketplace in the United States and Canada. It also reviews the underwriting and marketing of life annuities in the United Kingdom where “enhanced” life annuities are available for a broader cross section of the marketplace. It also reviews the use of P&C risk classification techniques and how they might apply to the annuity marketplace as well as potential legal constraints on broader risk classification for life annuities.

Description: In 2007 the International Accounting Standards Board IASB released a discussion paper proposing a new accounting model for insurance contracts, known as the current exit value model. One aspect of the proposed accounting model is that claim liabilities would need to include explicit margins satisfying certain criteria. Currently it is common for U.S. medical insurers to include explicit margins in their claim liabilities. However, we demonstrate that the margin approach most commonly used today by U.S. medical insurers does not satisfy the objectives articulated in the IASB discussion paper regarding the role of margins. We then propose a new formula for including explicit margins in U.S. medical insurance claim liabilities in a manner that is more compatible with the principles articulated in the IASB discussion paper. Finally, we illustrate our proposed claim liability formula using an example drawn from real-life data.

Description: Insurance company financial reporting and performance measurement are going through a significant transformation. Insurers are beginning to look at their business based on what many refer to as the “economic value framework.” Under this framework insurance companies determine the economic value of the capital invested in their business and the economic value of earnings to derive a risk-adjusted return on capital. Standard setters, primarily European insurance regulators through Solvency II and the International Accounting Standards Board through IFRS Phase II, propose adopting many of these concepts for solvency and performance reporting.