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September 10, 2006 at 04:00 PM
Disability benefits and benefits paid under accident and health contracts increased 11% for the top 50 companies, according to 2005 annual statement filings.
Total benefits in this category grew to $63.6 billion in 2005 compared with $57.5 billion in 2004. The data is culled from the National Association of Insurance Commissioners’ annual statement database via Highline Data, LLC. The information appears on page 6, line 13 of the annual statement filings.
The line item, NAIC says, represents a good portion of a reporting entity’s incurred claims. However, NAIC adds, another figure must be added to what is on Line 13 to obtain a reporting entity’s total incurred claims. That figure, NAIC says, is the change in the reporting entity’s aggregate reserve for accident and health contracts.
So, the net increase in total reserves in 2005 over 2004 (page 14, line 7) would be added to benefits paid, according to NAIC.
NAIC also notes that some companies have higher incurred claims than benefits paid. The differences can usually be attributed to the type of A&H coverage, NAIC says.
Under a traditional major medical policy, most of the amount will come from the benefits paid line on page 6, line 13. For other types of coverage, such as long term care or disability, the reserves carried by the insurer are calculated and reported in a different manner than those under a major medical policy and a higher percentage of the incurred claims may be attributed to the change in aggregate reserves, NAIC adds.
