Glossary

The base data represents the historical data set used by the actuary to develop the capitation rates. The data may be from Medicaid fee for-service data, MCO data, or from a comparable population data source. (Medicaid Managed-Care Capitation – Rate Development and Certification)

Reserves calculated in accordance with section 5 of the model NAIC Standard Valuation Law. (ASOP No. 40)

The residual risk that results from an imperfect risk offset or transfer process. For example, basis risk may arise from a hedge that pays off based upon an index while the exposure is an investment in a managed selection of individual stocks, or from a capital market hedge based upon industry-wide losses used to offset an insurer’s specific storm exposure. (ASOP No. 47)

Choices that a benefit plan member may make under a benefit plan including basic coverages (for example, choice of medical plans) and additional coverages (for example, contributory dental coverage). (2nd Draft Proposed Revision of ASOP No. 6)

An individual covered by a benefit plan. (2nd Draft Proposed Revision of ASOP No. 6)

An arrangement providing medical, prescription drug, dental, vision, legal, death, long-term care, or other benefits (excluding retirement income benefits) to participants of the retiree group benefits program, whether on a reimbursement, indemnity, or service benefit basis. (2nd Draft Proposed Revision of ASOP No. 6)

An assumption that reflects anticipated experience with no provision for risk of adverse deviation. (ASOP No. 10)

For each economic assumption, the narrowest range within which the actuary reasonably anticipates that the actual results, compounded over the measurement period, are more likely than not to fall. (ASOP No. 27)

All policies of a common coverage type (for example, major medical, preferred provider organization, or capitated managed care); demographic grouping (for example, size, age, or area, group, or individual policies); or other segmentation useful for estimating incurred claims for actuarial purposes.

The value of an asset or assets, as included in a financial statement or other financial reporting context. (ASOP No. 20)

Benefit plans are categorized into levels in the non-group and small group markets as follows: bronze (60% AV), silver (70% AV), gold (80% AV), and platinum (90% AV). (Determining Minimum Value and Actuarial Value Under the Affordable Care Act)

A group of policies and associated assets that are modeled together to project future accumulated deficiencies. This grouping will generally follow the company’s asset segmentation plan, investment strategies, or approach used to allocate investment income for statutory purposes. (Standards for Life-Insurance Required Capital Levels)