Glossary

As each is defined in SFAS No. 97, & 6–14. (ASOP No. 10)

The source of the risk ceded in a reinsurance transaction. Examples of underlying products include life insurance, annuities, long-duration health benefit plans, pensions, and any associated riders.

All cash flows related to underwriting operations, including premiums, claims, claims expenses, and underwriting expenses.

All expenses except losses, loss adjustment expenses, investment expenses, policyholder dividends, and income taxes. (ASOP No. 30)

The provision for underwriting profit in the actuarially developed rate, typically expressed as a percentage of the rate. (ASOP No. 30)

An explicit provision for profit in the future cost estimate. An underwriting profit margin may be referred to as an underwriting profit provision in certain contexts.

An amount established to reflect premiums that have been collected prior to the valuation date for coverage after the valuation date.

The excess of the actuarial accrued liability over the actuarial value of assets. (ASOP No. 4)

The excess of the actuarial accrued liability over the actuarial value of assets. (ASOP No. 4)

The excess of the actuarial accrued liability over the actuarial value of assets. (ASOP No. 4)

The excess of the actuarial accrued liability over the actuarial value of assets. (ASOP No. 4)

An unfunded actuarial accrued liability which is not adjusted (“frozen”) from one actuarial valuation to the next to reflect actuarial gains (losses) under certain actuarial cost methods. Generally, this amount is adjusted by any increments or decrements in actuarial accrued liability due to changes in pension plan benefits or actuarial assumptions subsequent to the date it is frozen. Adjustments are made from one actuarial valuation to the next to reflect the addition of interest and deduction of amortization payments. (ASOP No. 4)

An unfunded actuarial accrued liability which is not adjusted (“frozen”) from one actuarial valuation to the next to reflect actuarial gains (losses) under certain actuarial cost methods. Generally, this amount is adjusted by any increments or decrements in actuarial accrued liability due to changes in pension plan benefits or actuarial assumptions subsequent to the date it is frozen. Adjustments are made from one actuarial valuation to the next to reflect the addition of interest and deduction of amortization payments. (ASOP No. 4)

Impacts or outcomes on specific risk subjects resulting from the use of a risk classification framework that is not intentionally designed to result in such impacts or outcomes.

A method under which the benefits (projected or unprojected) of each individual included in an actuarial valuation are allocated by a consistent formula to valuation years. The actuarial present value of benefits allocated to a valuation year is called the normal cost. The actuarial present value of benefits allocated to all periods prior to a valuation year is called the actuarial accrued liability. (ASOP No. 4)

As each is defined in SFAS No. 97, & 6–14. (ASOP No. 10)

The process of developing an unpaid claim estimate. (ASOP No. 36)

The actuary’s estimate of the obligation for future payment resulting from claims due to past events. For clarity and unless otherwise indicated, this estimate is on an undiscounted basis and the terms “unpaid claim estimate” and “undiscounted unpaid claim estimate” are used interchangeably throughout this standard. (Draft Proposed Revision of ASOP No. 20)

The entity with respect to which the actuary is determining liabilities associated with health benefit plans or risk-sharing arrangements. (ASOP No. 5 Revision – Incurred Health and Disability Claims)