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6 Cards in this Set

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Watch for the words “Newly underwritten _____ insurance” in the exam question. That’s a hint that you need the Durational Slope model (this SN) or the CAST model (TSA 34) or one of the others in SN 209.
none
Reasons why Incurred Claims Increase By Duration:
 Underwriting wear-off
 Antiselective lapses
 insureds delay care until familiar with the claims process
 disabled ph’s still covered by old cpy.
Reasons why Paid Claims Increase by Duration:
 The above, and:
 claims not submitted until after elimination period
 2nd, 3rd, etc. year paid claims include more incurral years
GOAL OF THIS STUDY:
To find out how the shape of the durational claim cost curve varies by
 UW method
 Size of group
 pre-existing-condition exclusion period
METHOD USED IN THIS STUDY
Collecting data:
 wait until claims are complete
 ignore cells with not enough data (common in later durations, since lapses are high)
 Plans studied must have similar:
 deductibles
 plan type
 no reinsurance
 underwriting (within each UW category)
 no procedure changes during the experience period
Adjustments to data:
 Normalize data using adjustment factors to remove the effect of differences due to:
 plan design
 Geog Area
 Demographics
 Inflation / trend
 review data for reasonability.

Calculation Method
(See numerical examples in chapter notes)
RESULTS OF STUDY
see notes