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T he N ewsmonthly
A merican A cademy
s the presidential and congressional elections near and candidates begin to engage
in campaign policy battles, Americans need the background information necessary to closely scrutinize the details of candidates’ proposals on health care issues and Social Security. In its role as a resource for objective actuarial analysis, the Academy has developed an Election 2008 online resource center devoted to presenting information on relevant topics in order to aid policymakers, the media, and the public in their decision making throughout the 2008 elections. As part of the Academy’s election effort, its Health Practice Council has developed a series of one-page backgrounders that summarize issues critical to the national dialogue on health care reform. Meanwhile, the Pension Practice Council’s Social Insurance Committee has updated an overview of key debate topics surrounding potential Social Security reform.
Health Care The health backgrounders highlight the overarching issues of rising health care costs and Medicare’s financial condition—an issue often ignored by candidates in discussions of health care reform. Additionally, while terms like “universal coverage” and “market reform” tend to be recognizable, the means by which candidates hope to achieve these goals may be harder to understand. Accordingly, the backgrounders also define and See Election, Page 8 discuss the potential impli-
Health Practice Council Annual Hill Visits
Inside Academy Dues May 1 deadline nears for 2008 payments. . . . . PAGE 2 Next Phase of Life 10,000 scenarios released as Academy prepares for C3 Phase III. . . . . . . . . . PAGE 4
Academy Prospers from Capitol Ventures
and Federal Health Committee needed little introduction as they made their annual spring sojourn to Capitol Hill on March 6 and 7. Education was the theme for the two-day Academy health visits, as Washington policymakers from both political parties turned to the 16 Academy visitors as trusted See hill visits, Page 6 resources for health care expertise. embers of the Academy’s Health Practice Council
PBA Seminar Registration Academy offers introduction to the principles-based approach. . . . . . . . . . . . PAGE 4 Coverage Map Fact sheet explains medical malpractice policies. . . . . . . . . . . . . . PAGE 5 International Outlook IAA President David Hartman shares strategic objectives . . . . PAGE 7
Academy Frames Key Election Issues
From left, Cori Uccello, John Schubert, Karen Bender, Cathy Murphy-Barron, and Warren Jones prepare for a meeting with the Congressional Research Service.
Calendar April 6-9 Enrolled Actuaries Meeting (Academy, CCA), Washington
14-16 SOA enterprise risk management symposium, Chicago
17 Academy PBR update webcast 22 Academy Executive Committee meeting, Washington
24-26 NCSL spring forum, Washington
May 6-8 Life illustrations seminar (Academy, SOA), Tampa, Fla. 13 Academy Council on Professionalism meeting, Boston 20 CUSP meeting, Washington 21 Academy Board of Directors meeting, Washington
22 Academy Governance Task Force meeting, Washington
31-June 3 NAIC summer meeting, San Francisco
June 9-10 Academy introduction to PBA seminar, Orlando
11-14 IAA meeting, Quebec City 16-18 SOA life spring meeting, Quebec City 18-20 CIA annual meeting, Quebec City 30-July 1 ASB meeting, Washington
JULY 17-19 NAAC meeting, Banff, Alberta, Canada
AUGUST 5 Academy Leadership meeting, Washington 6 Academy Executive Committee meeting, Washington
September 15-16 ASB meeting, Washington
Academy News Briefs Due(s) Date Approaching
f you haven’t renewed your Academy membership, May 1 is the dead-
line to pay your 2008 dues if you want to avoid a late fee and possible interruption of Academy publications. You can use our fast, efficient online dues system 24/7. Just go to www.actuary.org/dues.asp and log in. If you have any questions about your membership status or about paying dues, contact Rachel Rusch, the Academy’s assistant director of membership relations and administration (email@example.com; 202-785-7871).
Stay Connected Is your contact information with the Academy current? Please take a moment to verify your member record via the Academy’s website. We are committed to providing services to our members that help them get connected and stay connected. Having current contact information is an important part of that process. To verify or update your information on the Academy website: 1. Log in to the site. You’ll go to the member welcome page. 2. Under “Your Academy account,” click “Update your member record.” 3. Verify your employer, position, preferred address, alternate address, daytime phone number, and e-mail address. While you are checking your profile, take a moment to get particulars on any outstanding balances and amounts paid in your Academy account. The invoices and receipts have a printer-friendly version that you can use if you need to submit them to accounting departments or for your own records. To stay connected or if you have questions about receiving Academy material, contact Rachel Rusch (firstname.lastname@example.org; 202-785-7871).
24 Academy PBA case study seminar, Washington
October 2-4 NAAC meeting, Sedona, Ariz. 5 CUSP meeting, Phoenix 6 Joint Orientation for U.S. Boards, Sedona, Ariz.
7 Academy Board of Directors meeting, Phoenix
19-22 SOA annual meeting, Orlando, Fla. 19-22 ASPPA annual meeting, Washington 26-29 CCA annual meeting, Bonita Springs, Fla.
November 1-4 IAA meeting, Limassol, Cyprus Web Interface
Links to documents underlined in blue are included in the online version of this issue at www.actuary.org/update/index.asp
The Academy is cosponsoring a Society of Actuaries (SOA) seminar on illustration testing for life insurance product development actuaries on May 6 and 7 in Tampa, Fla. The seminar will provide information on the illustration regulation and related emerging issues. To register, visit the SOA website. Seeking Fellows
The Academy has three openings for senior fellow positions: one for life insurance issues, one for pension issues,
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and one for international issues. Details are expected to be announced soon. In the meantime, if you are interested in one of the positions or have questions, please contact the Academy’s human resources manager, Gail Ingram (email@example.com; 202-223-8196). Actuarial Art As far as corpora callosa (the part of the brain that connects its two hemispheres) go, Philip Barlow’s is probably bigger than yours. At least, that would explain how the Academy Life Practice Council mem-
ber goes from his left-brained actuarial day job as associate commissioner for the District of Columbia Department of Insurance, Securities, and Banking to his rightbrained after-hours interest as a well-known patron of
25-26 SOA valuation symposium, Washington
by THE NUMBER
Miles across the English Channel from the shores of Dover, England, to Calais, France. In July, Australian actuary Kaise Stephan will actually need to swim closer to 28 to 31 miles, including tides, over 12 to 15 hours when he tries to become the first actuary to cross the channel. Stephan, a 33-year-old approved actuary for Munich Re in Sydney, will be swimming for the Channel Crossing for Life campaign, which raises funds for the oncology unit at the local Children’s Hospital at Westmead. By the time of the attempt, Stephan will have swum over 3,000 miles in preparation (farther
the Washington arts scene. In January, Barlow’s affinity for things expressive and numeric converged in the title of a local exhibit dedicated to him, 15 for Philip: Fifteen Artists Look at Arts Patron Philip Barlow. The exhibit, all the work of Washington artists, is a testament to the boundlessness of modern portraiture—covering media that range from painting and photography to lyricism and Legomania. It is also a tribute to a man who is actively involved in the arts community as a local collector and occasional curator. Temp-ting Career
When the Golden Globenominated Hope Davis was a struggling actress, she immediately learned to measure the payoff of fulfilling her acting dreams against the risk of her probable failure. Before playing the daughter of actuary Warren Schmidt (played by Jack Nicholson) in About Schmidt, Davis earned a paycheck by doing temp work for an insurance actuarial firm, she revealed in an interview in the Feb. 21-27 issue of entertainment magazine Time Out New York. Even if she never read copies of the Update around her office, she had a second chance when they—along with Contingencies and the w w w. a c t u a r y. o r g
Yearbook—were featured in the 2003 film. In The News
Academy Senior Health Fellow Cori Uccello was quoted in the February issue of Kiplinger’s Personal Finance in an article dissecting presidential candidates’ health care reform proposals. Uccello said that in New York, as an unintended consequence of guaranteed issue, healthy people often decide not to buy coverage until they get sick, which boosts the cost for everyone. Academy President William Bluhm’s letter to the editor of the Baltimore Sun was published in the Feb. 7 edition. His letter responded to a Feb. 1 op-ed that provided a faulty and misleading characterization of actuarial accountability and standards of practice. Bluhm wrote that actuaries are accountable for their work and explained the roles of the Actuarial Standards Board and the Actuarial Board for Counseling and Discipline. Bruce Schobel, chairperson
of the Academy’s Retirement Security Principles Task Force, revealed some of the lesser-known facts about Social Security in a Feb.
than the distance between any two points within the contiguous United States). In addition to intense training, you might say he has etymology on his side. Though Kaise Stephan’s heritage is Assyrian, an Anglo-Germanic derivation of his name would trace back to King Stephen, the last Norman monarch of England and the grandson of William the Conqueror—who led his invading army in the historic reverse commute across the English Channel almost a millennium ago. For more information, or to donate, visit www. channelcrossingforlife.com.
17 Baltimore Sun financial column. Diane Wallace, member of the
Academy’s Life Reinsurance Work Group, was quoted in a Feb. 11 National Underwriter Life & Health article. Wallace said modeling reinsurance is really no different than modeling life insurance policies. Many reinsurance cash flows are more consistent than regular policy cash flows, and capturing all possibilities through modeling helps eliminate the possibility of manipulating reinsurance, she explained. Her comments were offered during a Jan. 31 conference call of the Life PBR and Reinsurance subcommittees of the National Association of Insurance Commissioners’ Life and Health Actuarial Task Force. Former Academy Executive Director Kevin Cronin was the guest during the Feb. 21 broadcast of BestDay Audio—a Web audio show by A.M. Best. Cronin provided background on the Academy, an update on the actuarial profession, a summary of recent Academy accomplishments, and an outlook on the future. He also encouraged listeners interested in becoming actuaries to visit www.BeAnActuary.org.
John Parks, Academy
president-elect, and Sheila Kalkunte, Academy assistant general counsel, addressed the Philadelphia Actuaries Club on Feb. 19. Parks discussed the Academy’s state of affairs, and Kalkunte discussed the profession’s revised Qualification standards. On The Move
® Former Academy President Larry Zimpleman has been elected to take over as chief executive officer of Principal Financial Group in Des Moines, Iowa, on May 1. He is currently president of Principal Financial Group and will retain that title. ® Thomas Wortman is the new vice president of actuarial pricing for The Regence Group in Portland, Ore. He was previously the senior director of actuarial pricing. ® Kristen Walter Wright is the new vice president of actuarial analysis for The Regence Group in Seattle, Wash. She was previously the senior director of actuarial analysis. ® Dimitry Mindlin is now president of CDI Advisors LLC in Agoura, Calif. He was previously managing director for Wilshire Associates in Santa Monica, Calif.
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➤ Steve Blaske, vice president and appointed actuary with Ameriprise Financial Inc. in Minneapolis, has joined the Academy’s Annuity Reserves Work Group.
Interest Rate Scenarios Released for C3 Phase III Preparation
he Academy’s Economic Scenario Work Group
(ESWG) is getting ready for the next phase in principles-based approaches to reserves and capital. With C3 Phase III looming around the corner, on Feb. 25, the work group released 10,000 interest rate scenarios created by a proposed scenario generator model under a principlesbased system. The work group has made these scenarios available for companies and Academy work groups wishing to test current proposals for principles-based calculations. As the ESWG continues to work on criteria to allow alternative generators, it also plans to release in the near future an upgrade to the generator that will allow alternative start dates to be used to create riskfree curves. The stochastic log volatility scenario generator is calibrated to historical U.S. interest rate volatility and yield curve shapes. In developing its projection, the model considers the long-term average level of rates as well as the current interest rate environment, which is lower than the long-term historical average. The interest rate scenarios provided are based on the Sept. 30, 2007, U.S. Treasury curve. Accompanying the model is a scenariopicking tool that allows users to extract a representative sample of scenarios from the 10,000. The ESWG has also released a program allowing compa-
➤D onna Megregian, an actuary with Milliman in Indianapolis, has joined the Academy’s Illustrations Work Group.
nies to calculate statistics from an internal model in order to compare these with similar statistics created from the base scenarios described above. The work group is still in the process of developing calibration criteria—including, possibly, setting sample-size requirements for the subsets used—that the alternative interest rate models must meet, which the ESWG will submit as recommendations to the National Association of Insurance Commissioners. In order to encourage companies to take responsibility for their risk management processes and to develop internal models that best reflect their own blocks of business—the driving force behind the principles-based approach—the ESWG supports broader calibration tolerances as long as the actuary can document and support the choice of scenarios. The work group will remain flexible on this issue, as it awaits continued public discussion from various parties. Information about the Academy’s proposed scenario generator can be accessed online, along with links to the stats calculator, details on the interest rate scenarios, and additional background material. The ESWG welcomes any feedback from those who have applied the scenarios to unique blocks of business. To submit comments or questions about using the scenario generator, please contact Academy Life Policy Analyst Natalie Jones (firstname.lastname@example.org; 202-223-8196).
Applying a Principles-Based Approach to Capital: Status Update and Lessons Learned from C-3 Phase II June 9-10, 2008 • Orlando, Fla. The Academy will present a two-day seminar on the principles-based approach (PBA) for statutory reserves and capital and the impact it will have in the near future. It is part one of a two-part series covering PBA. The second, more advanced, seminar covering implementation and other issues will be offered in the fall of 2008.
The June seminar will provide information on: ® The factors that have sparked the need for PBA ® T he basic elements of the PBA framework for both reserves and capital ® Major issues and hot topics currently under discussion ® Key challenges and opportunities ® Implementation and practical considerations
Hilton Walt Disney World 1751 Hotel Plaza Blvd. Lake Buena Vista, Fla. Telephone: (407) 827-4000 Fax: (407) 827-3890 Room rates: $199/night (single/double) For more program details and registration information, visit www.actuary.org/life.asp.
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Speakers include: ®M ike Boerner, chairperson, NAIC Life and Health Actuarial Task Force’s PBR Process and Coordination Subgroup ® T om Campbell, vice president, Academy Life Practice Council, and chairperson, Academy Variable Annuity Reserves Work Group ®D onna Claire, chairperson, Academy Life Financial Soundness/Risk Management Committee ® T odd Erkis, chairperson, Academy Life PBA Practice Note Work Group ® J im Lamson, chairperson, Academy Annuities Reserves Work Group ®D ave Neve, chairperson, Academy Life Reserves Work Group
Medical Malpractice Fact Sheets
Just What the Doctor (and Actuary) Ordered
n March, the Academy’s Medical Malpractice Liability Insurance Subcommittee published the first in a
series of fact sheets designed to educate actuaries and members of the public about various areas of medical malpractice insurance. The first fact sheet (just over a page in length) gives an overview of the different types of medical malpractice policies, such as occurrence policies and claims-made policies. It also addresses ways to close the gap between the rules for those two types of policies by purchasing modified occurrence policies. The fact sheet also explains what distinguishes each policy type from the next and how to determine coverage within a policy area. For instance, it shows how the coverage of different claims-made policies depends on factors such as the retroactive date of the policy and how the policy defines a claim. Future fact sheets will give an overview of topics such as joint and several liability, damage caps, periodic payments, tort reform, and statute of limitations. The fact sheet can be accessed on the Academy’s casualty page.
➤ Joining the Academy’s Terrorism Risk Insurance Subcommittee are Roberta Garland, president of Garland Actuarial in Los Altos Hills, Calif.; Kimberley Ward, partner with Windsor Strategy Partners in Newark, Ill.; and Victoria Gomez, assistant vice president with ACE Tempest Re USA in Stamford, Conn.
➤ Teresa Dalenta, an actuary with Deloitte Consulting in Hartford, Conn., has joined the Academy’s Casualty Practice Council and the Academy’s Public Interest Committee on Emerging Issues.
➤ J oining the Academy’s Casualty Loss Reserve Joint Planning
man, I hate consultants. © 2007 Craig Snodgrass
Cartoon by Craig Snodgrass, www.notsohumblepi.com
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Committee are Chairperson Chester Szczepanski, vice president and chief actuary for Donegal Mutual Insurance Group in Marietta, Pa., and Vice Chairperson Joseph Herbers, principal and consulting actuary for Pinnacle Actuarial Resources in Bloomington, Ill. Also joining the committee are James Kahn, a senior consultant with Watson Wyatt Worldwide in New York; Kenneth Carlton, principal for Milliman in Manchester, N.H.; Bethany Cass, a consulting actuary with Milliman in Wakefield, Mass.; David Foley, principal for Deloitte Consulting, Hartford, Conn.; M. Wendy Germani, a consulting actuary with American Actuarial Consulting Group in Houston; Alan Hines, a managing director for PricewaterhouseCoopers in Boston; William Burns, an actuary in Basking Ridge, N.J.; Richard Kohan, actuarial director for Arrowpoint Capital in Charlotte, N.C.; Ronald Kozlowski, an actuary with Towers Perrin in San Francisco; Ronald Kuehn, a consulting actuary with Huggins Actuarial Services in Media, Pa.; George Levine, senior manager with KPMG in Hartford, Conn.; and Joseph Petrelli, president of Demotech Inc. in Dublin, Ohio.
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“Over the years, we continue to meet with more senior policy staff who are more familiar with, and can make decisions on, health care issues,” said Sandler, who is a member of the Update editorial board and has been a spring regular since the Academy bolstered its Hill visit efforts in 2002. “That continues to enhance the value of these visits for us and for the people we’re meeting with when we can start at a higher level of discussion.” As another successful sign of the Academy’s efforts, most of those staff members came from the offices of powerful policymakers on Capitol Hill, including staff on both sides of the aisle from the Senate Finance and Budget committees. Academy Health Practice Council member Cathy MurphyBarron said she was surprised with some policymakers’ familiarity with even cutting-edge issues. For instance, in one meeting, Murphy-Barron’s group was asked about value-based insurance design, a relatively new plan-design concept that lowers costsharing requirements for services determined to be of higher clinical value. The idea is that such a system would not only reduce cost-sharing for certain patients but could also reduce costs for health plans, assuming that spending a little more money initially to treat a condition could stave off more serious and more expensive treatment later on. From left, Patrick Collins, Karl Madrecki, and David Shea before meeting Though there was general agreement that the Academy’s with Senate staff own priorities were in line with the issues on which Congress intends to focus in the near future, the trip was also a learning As Democrats and Republicans prepare their plans of opportunity for Academy members. action contingent on the momentum of this fall’s elections, “The visits gave us insight into the political nuances of some legislative staffs from both parties stressed their eagerness to issues and whether there was more general support in Congress gather as much information on health care issues as they can or more contention,” Sandler said. “That will help us shape our in 2008. In turn, the four Academy teams responded by propublic policy activities.” viding comprehensive considerations to representatives from During the course of the 19 congressional offices and visits, Academy members committees, the CongresThe best approach is one that responded to questions on a sional Budget Office, the comprehensively acknowledges wide variety of issues: the effect Congressional Research Seron premiums of risk pools in the vice, the Department of the how interrelated all the issues are group and non-group markets, Treasury, and the Bipartisan the pros and cons of mandates, Policy Center. and looks at the whole picture. the role and experience of the “It was actually refreshrecently implemented Massachusetts health reform program, the ing to hear that nobody acted like they knew all the answers,” effectiveness of disease management programs, the Bush adminissaid Academy Health Practice Council member Patrick Collins, tration’ s tax proposal, and mental health parity legislation—which a member of the Update editorial board. passed the House of Representatives the day before the Hill visits However, Collins was impressed by the legislative staffs’ but differs from the Senate version. Perhaps most important, howpreparation and knowledge of various health care issues. For ever, Sandler said that the two-day discussions indicate that there example, in a meeting with a Senate legislative assistant about government medical reinsurance, Collins said it was clear from is more appreciation on the Hill for how all the various health care issues are connected to one another. the conversation that the staffer is up to date with the Academy’s “The best approach is one that comprehensively acknowlpublications, including relevant issue briefs. “It’s encouraging to see that the assistant had in mind that edges how interrelated all the issues are and looks at the whole the Academy is a good resource for that information,” Collins picture,” he said. Accordingly, the 16 Academy visitors to the nation’s capital said. “In that sense, we’ve achieved our goal.” Like Rome, Washington—and its network of policy power came from a variety of health backgrounds and brought a wide brokers—wasn’t built in a day. Fourteen years after he made his range of expertise. The Academy delegation included MurphyBarron, Sandler, Collins, David Shea, Al Bingham, Karl Madrecki, first Academy visit to the Hill, Academy Health Practice Council Warren Jones, Karen Bender, John Schubert, Beth Lieberman, member and Hill visit team leader Geoffrey Sandler said that it was extremely gratifying to look at the inroads the Academy has Rowen Bell, Mark McGuire, Jeff Petertil, Jennifer Gillespie, Darrell Knapp, and Cori Uccello. made with policymakers in the past decade.
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IAA Welcomes American Input By David Hartman On Jan. 1, David Hartman began a one-year term as 2008 president of the International Actuarial Association (IAA). Hartman served as president of the American Academy of Actuaries in 1993-94, president of the Casualty Actuarial Society (CAS) in 1987-88, and chairperson of the Actuarial Standards Board for a two-year term from 1998-99. He has also served on numerous committees of both the Academy and the CAS. Hartman retired in 2005 as the chief actuary of the Chubb Group of Insurance Companies following a 34-year career there.
of the IAA at the beginning of this year, one of my primary goals has been to get the IAA to adopt a strategic plan. The Council of the IAA took its first step in that process in February, when its delegates supported new statements of the vision, mission, and values of the international body. Now, the next step in that process is to identify strategic objectives to fulfill the mission and to work toward the vision. The following six strategic objectives have been proposed by the IAA’s Task Force on Strategic Planning: ® Identify, establish, and maintain relationships with key supranational audiences and provide them with actuarial input to improve the soundness of decisions being made on important global issues. ® Facilitate the use and expansion ince becoming president
of the scientific knowledge of the actuarial profession to wider fields to help enhance the scope, quality, and availability of actuarial services offered by its member associations. ® Establish, maintain, and promote common standards of actuarial education and professionalism, as well as model standards of practice for use by member associations worldwide. ® Support the promotion, organization, and development of the actuarial profession in areas of the world in which it is not present or is not fully organized. ® Provide a forum for discussion among actuaries and actuarial associations throughout the world. ® Promote and facilitate the globalization of the actuarial brand. These six strategic objectives have been circulated for comment to the IAA Council delegates from the 58 full member associations and the chairpersons of the seven sections of the IAA. They will be considered at the next meeting of the IAA Council in Quebec City in June. If you have any comments on these strategic objectives, please forward them as soon as possible to Dan McCarthy (dan.mccarthy@milliman. com), the Academy’s delegate to the IAA Council and member of the task force, who will bring them forward for consideration. The members of the task force look forward to further discussion of these strategic objectives over the next several months. The goal is to incorporate them into an IAA
IAA President David Hartman
strategic plan that can be adopted by the Council of the IAA this year. This year also marks the 10th anniversary of the restructuring of the IAA from an association of individual actuaries to an association of associations. There are many significant accomplishments of the IAA over the past 10 years that will be celebrated this year. Looking forward, the IAA is dependent on its member associations for its success. The Academy is becoming a more visible, contributing member of the IAA. Special thanks are due to the many Academy members who serve on IAA committees and who serve our profession so ably. With the help of all member associations, I look forward to moving the actuarial profession forward internationally in 2008.
In February, the Council of the IAA approved the following statements:
To seek worldwide recognition for the actuarial profession as a major player in the decision-making process within the financial services industry, in the area of social protection, and in the management of risk, for the well-being of society as a whole.
To promote professionalism, develop education standards, and encourage research, with the active involvement of its member associations and sections, in order to address changing needs and promote the international role, reputation, and recognition of the actuarial profession, which it represents as the worldwide organization of actuarial associations.
To adhere to the values of integrity, accountability, transparency, and objectivity when dealing with member associations, other stakeholders, and the public.
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Actuarial Update Associate Editors
William Carroll Patrick Collins Andrew Erman Rade Musulin Geoffrey Sandler Donald Segal Editor
Tim Dougherty (email@example.com) Design and Production
BonoTom Studio Inc. Marketing and publication production manager
American Academy of Actuaries President
William Bluhm President-Elect
John Parks Secretary-Treasurer
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The American Academy of Actuaries 1100 Seventeenth Street NW Seventh Floor Washington, DC 20036 Phone 202-223-8196 Fax 202-872-1948 www.actuary.org Statements of fact and opinion in this publication, including editorials and letters to the editor, are made on the responsibility of the authors alone and do not necessarily imply or represent the position of the American Academy of Actuaries, the editors, or the members of the Academy. ©2008 The American Academy of Actuaries. All rights reserved.
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The Academy’s insights on these issues will become even more valuable after the next president and Congress take office and the details surrounding reform proposals are hammered out. cations of medical insurance pools (risk pooling), reinsurance mechanisms, and consumer-driven health plans. “The media and the general public can use these overviews to quickly familiarize themselves with the Academy’s perspective on health reform issues,” said Cori Uccello, the Academy’s senior health fellow. “They can also learn about some of the key considerations that need to be addressed as different policy proposals are pursued.” Each of the backgrounders is supplemented with links to more detailed Academy policy statements on the issues. As more details become available about the various proposals and as the council develops new material to respond to gaps in public education on these issues, the new election 2008 website will continue to grow. Social Security Social Security’s financial shortfalls creep ever closer. With benefits and expenses expected to exceed tax revenues in 2017 and the trust fund projected to be exhausted by 2041, there is an immediate need to question our presidential and congressional candidates about how they plan to stabilize the foundation of retirement security for many Americans. Possible Social Security reforms discussed in the election guide include increasing the age for full eligibility, changing financing and benefit levels, establishing means testing, and instituting some form of individual accounts. The Social Security guide provides an update to the version developed by the Social Insurance
According to Uccello, it’s important to remember that the election is only the beginning of the reform process for both health care and Social Security. “The Academy’s insights on these issues will become even more valuable after the next president and Congress take office and the details surrounding reform proposals are hammered out,” she said. —Heather Jerbi and Samuel Genson
health briefs ➤ Dale Yamamoto, president of Red Quill Consulting in Barrington, Ill., has replaced Adam Reese as cochairperson of the Academy’s Joint HP/PPC Committee on Retiree Health. ➤ Kevin Dill, an associate actuary with Ceres Group Inc. in Mission, Kan., has joined the Academy’s Health Practice Financial Reporting Committee. ➤ David Kerr, principal and consulting actuary with DaVinci Consulting Group in Jamison, Pa., has joined the Academy’s Federal Long-Term Care Task Force. ➤ Bob Darnell, an actuary with Towers Perrin in Dallas, has joined the Academy’s State Long-Term Care PrinciplesBased Work Group.
pension briefs ➤ Jim Rizzo, senior consultant and actuary with Gabriel, Roeder, Smith & Co. in Fort Lauderdale, Fla., has joined the Academy’s Public Plans Subcommittee.
Committee prior to the 2004 presidential election— when the estimated dates for the first budget deficit and trust fund exhaustion were 2018 and 2042, respectively. Now, effectively five years closer to trouble, many of the same questions surrounding Social Security remain, though some hot-button issues from 2004 are no longer at the forefront of today’s Social Security reform discussions. For instance, the idea of individual accounts, while still favored by many, has morphed into a discussion of an additional savings tool rather than one that would replace the current Social Security system. The election guide encourages all citizens to think about how any proposed changes to Social Security may disproportionately affect differing demographic groups. One of the many questions this election guide poses to stakeholders is whether or not improvements in older workers’ health and longevity justify delaying the age requirement for full benefits. Increasing the normal retirement age from 67 to 70 (or higher) is a topic that is sure to be heavily debated once Social Security reform discussions commence.
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risk management and Financial reporting briefs ➤ Joining the Academy’s Financial Reporting Committee as vice chairperson is G. Christopher Nyce, senior manager at KPMG in Radnor, Pa.