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Group drafts individual disability table

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Actuaries would like to start getting public comments on a draft of a new individual disability insurance valuation table in January.

If adopted, the draft table could help insurers make more use of information about smoking, policy benefit periods and other variables when designing individual disability policies, establishing reserves and setting prices.

The Individual Disability Table Work Group has prepared a written presentation on the table effort for the Health Actuarial Task Force at the National Association of Insurance Commissioners (NAIC).

Actuaries at the American Academy of Actuaries and the Society of Actuaries formed the work group in February this year, at the request of the Health Actuarial Task Force.

The task force wants the work group to help it replace two tables based on data collected in the 1970s: The 1985 Commissioners’ Individual Disability A Table (1985 CIDA) and the Commissioners’ Individual Disability C Table (1985 CIDC).  

The new draft table is based on data collected from 1990 to 2007.

The work group would like to put the new table draft through a six-month public comment period starting in January. Members would build in a two-year table adoption transition period, to give insurers and vendors time to update their systems once states agree to use the tables, according to Doug Taylor, the work group co-chair. 

The individual table work group has tried to follow the example set by another disability table update team, the Group Long-Term Disability Work Group, as much as possible, Taylor said.

The work group acknowledged that the draft table does have some limitations.

The drafters have not assumed any improvement in mortality, and they could not separate the effects of individual disability claims that end because of death from claims that end because the claimant has recovered, Taylor said. The drafters are hoping they can get data to make improvements later.

CORRECTION: An earlier version of this story described the source of the individual disability presentation incorrectly. The Individual Disability Table Work Group is the source of the presentation.

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