Actuaries and others have given a proposed update of the U.S. individual disability insurance valuation table good reviews. The Health Actuarial Task Force, part of the National Association of Insurance Commissioners (NAIC), released the 2013 Individual Disability Income Valuation Tables Exposure Comments draft in December.
The task force used insurance company experience data collected from 1990 to 2007 to create the draft. They hope to replace the current table, the 1985 Commissioners’ Individual Disability A Table (1985 CIDA) and the Commissioners’ Individual Disability C Table (1985 CIDC). The 1985 tables are based on data gathered in the 1970s.
Insurers use the tables to set reserve levels for individual disability insurance policies and calculate prices.
The people who commented on the new draft focused mainly on technical concerns and requests that the drafters clarify some parts. Two actuaries who commented — Tracy Koch and Michael Streck — praised the draft but suggested that the drafters ought to distinguish between different types of employer-sponsored individual disability insurance.
Koch and Streck said the table ought to include separate modifiers for guaranteed standard issue business and fully underwritten multi-life business. An issuer of guaranteed standard issue coverage typically charges more for the insurance but agrees to take all applicants from a specified group without considering their medical history.