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Old 08-29-2003, 12:53 PM
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Double High C Double High C is offline
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1. When he talks about 1958/1980 CSO being used, he must mean for Active Life reserves, as the mortality rate for the disableds is embedded in the double decrement termination rates (the other decrement being recovery, of course). As for Active Lives, I don't see why you cannot use 1980 CSO; in fact, I believe that there are published SOA "monetary tables" with these; I believe that it is clear, whether implicitly or explicitly, that you can in fact use (reserves consistent with) these tables (and hence, 1980 CSO).

2. The termination rates are likely too low, because the life expectancy upon disability for a given insured has almost certainly increased; IIRC, disability insurance valuation assumptions/tables have also increased, e.g. from 1964 CGT? to the 1985? 1987? table. (Having said that, it is not clear that the active lives reserves are not overly conservative, as the probabilities of becoming disabled may have decreased significantly, though I am not aware of a study on this.)
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