Section Three - Computational or Procedural Issues
Part 1 – Trifurcation of Duties and Responsibilities
The past practice has been that the three duties and responsibilities with claim reserves, i.e., (a) data-handling, (b) consulting and delivery and (c) computation have all been assumed by actuary. The new practice is as follows: (a) the data-handling may be with the (i) broker, (ii) practitioner, (iii) plan sponsor or (iv) actuary, (b) these four parties may also assume the consulting and delivery duties and (c) the computation duties will always remain with the actuary. Note – The certifying actuary must review and edit any data which is handled by a non-actuary.
Part 2 – User-Friendliness
Claim reserves are produced and delivered in an environment that is (a) competitive, (b) litigious and (c) computer-dominated. User-friendliness becomes a necessity. User-friendliness assumes different forms depending on the relationships: e.g., is it in response to (a) trade and commerce law demands, (b) retention or development of producers or buyers, (c) service-oriented, (d) profit-oriented, etc. This E-Text notes that user-friendliness is a commodity not always gladly offered or gladly received.
Part 3 – New-Millennial Changes
New millennial changes which impact claim reserves, directly or indirectly, include (a) new provider reimbursements, (b) merger of risk and actuarial, (c) medical underwriting, (d) provider practice protocol, (e) stop-loss coverage, (f) administrative changes, (g) marketing and promotion, (h) computer technology, (i) economies of size and format, (j) new organizations and (k) enterprise risk management.
Part 4 – Procedural and Administrative
The Plan Sponsor, with guidance from the practitioner/consutant decides to obtain claim reserves using the new millennial procedural and administrative protocols described in this E-Text. The motivations for this decision are (b) ERM, (b) trade abd commerce laws, (c) new applications and uses for claim reserves (d) new technologies and (e) improvements in user-friendliness.