tabular discounting vs non-tabular discounting
What are the differences between these two and how does it impact other stuff like premiums, reserves and etc? Thank you!
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What are the differences between these two and how does it impact other stuff like premiums, reserves and etc? Thank you!
Comments
Discounting is performed on reserves; premium is not involved. Tabular discount involves use of discount factors based on life tables, which are usually specified by state statute. They are most commonly used in Workers Comp. Non-tabular discount rates are promulgated by the reporting entity, and not necessarily based on a statute.
Wiki notes provide the cases where either type of discounting should be included/excluded from capital calculation.
Does the fact that we subtract out medical and non tabular imply that the given PHS must be based on discounted loss reserves? After all, the statutory surplus does not consider non tabular discounts (although it does consider tabular discounts for some lines of business). Thanks.
We worked on this issue earlier. Have a look at this thread and see if it answers your question:
https://battleacts6us.ca/vanillaforum6us/discussion/605/statutory-loss-reserves-are-booked-at-their-nominal-undiscounted-value#latest