MODULES

Aim
The aim of the Principles and Practice of Health Insurance module is to examine the practical application of the actuarial scientific method and actuarial techniques to the financial management of a health or medical expenses insurance company.

Objectives
With reference to the provision of health care and the arrangements for health insurance in Hungary,
the trainee actuary will, on completion of the module, be able to:

• demonstrate a knowledge of the underlying framework, i.e.
• define the principal terms in use in health insurance business;
• describe some of the alternative models for financing health care;
• describe the main features of a mixed public/private financial health care system;
• describe the main features of the major types of health insurance product;
• describe the principles of accounting for health business;
• describe the major areas of risk and uncertainty in health insurance business;
• describe the principal forms of investment available for health business insurers and state the principles of investment for health insurers’ assets;
• apply the actuarial philosophy, the actuarial scientific method and relevant professional guidance to he financial management of health insurance business in:
• describing valuation data and verification procedures
• analyzing the experience of a health business insurer for the purposes of determining pricing and valuation assumptions and identifying the main sources of profit,
• assessing the cost of potential claims and expenses under a health insurance contract, in terms of emerging costs and in terms of discounted values, for the purposes of product pricing,
• determining the values of insurance liabilities of a health insurer and value of the assets, in terms of emerging costs and in terms of discounted values, for the purposes of
• the establishment of provisions and reserves for the accounts,
• the determination of solvency,
• interpreting the accounts of a health insurer,
• establishing the impact of the liabilities of a health insurer on the choice and management of assets,
• modelling the uncertainty in claim frequency and amount,
• evaluating the capital requirements of a health insurer for the purpose of determining the strategy for growth in business .