WOOD, GIVEN HIS EDUCATION, TRAINING AND EXPERIENCE? Brice Salence, - PowerPoint PPT Presentation

HOW MUCH WOOD WOULD A WOODCHUCK CHUCK, IF A WOODCHUCK COULD BE REASONABLY EXPECTED TO CHUCK WOOD, GIVEN HIS EDUCATION, TRAINING AND EXPERIENCE? Brice Salence, Pedrie le Roux SCOR

1. INTRODUCTION-CASE STUDY ONE 46 year-old saleslady, repeated hernia complaints “inability to perform own or any other occupation for gain or reward to which the life assured would be reasonably suited by education, training, earnings, status or experience . ” 2 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

AGENDA HOW MUCH WOOD WOULD A WOODCHUCK CHUCK, IF A WOODCHUCK COULD BE REASONABLY EXPECTED TO CHUCK WOOD, GIVEN HIS EDUCATION, TRAINING AND EXPERIENCE? 1. Introduction 2. Is There a Problem? 3. Termination Experience 4. Industry Guidance 5. Survey Feedback and Results 6. Possible Solutions 7. Conclusion 3 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

2. IS THERE A PROBLEM? GROUP INCOME DISABILITY POLICY DEFINITIONS Initial Period: “inability to perform your own occupation with own/any employer” • Extended Period: “inability to perform your own or any reasonably suited alternative • occupation, given the member’s age, education, training and experience (ETE) with any employer” “inability to perform any occupation with any employer” 4 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

2. IS THERE A PROBLEM? GROUP INCOME DISABILITY POLICY DEFINITIONS F102 “When costing for different benefit definitions it is important to make allowance for interpretation. Whilst a pricing actuary would regard the inability to perform “any” occupation as severe, in practice a more lenient interpretation is often made. ” 5 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

3. TERMINATION EXPERIENCE 6 ACTUARI AL SOCI E TY 2019 CONV E NTI ON | 22 - 23 OCTOBER 2019

3. TERMINATION EXPERIENCE AUS SA 7 ACTUARI AL SOCI E TY 2019 CONV E NTI ON | 22 - 23 OCTOBER 2019

3. TERMINATION EXPERIENCE USA AUS SA 8 ACTUARI AL SOCI E TY 2019 CONV E NTI ON | 22 - 23 OCTOBER 2019

4. INDUSTRY GUIDANCE APPLYING THE DEFINITION IN PRACTICE “inability to perform your own or any reasonably suited alternative occupation, given the member’s age, education, training and experience (ETE) with any employer” 9 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

4. INDUSTRY GUIDANCE LOA – GUIDELINES FOR ASSESSMENT OF IMPAIRMENT AND DISABILITY Age •  Close to retirement age Income •  Fall of more than 25% Current Position •  Length time in position  Experience, level of education and qualifications 10 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

4. INDUSTRY GUIDANCE ASISA GUIDELINES ASISA issued assessment guidelines for various claim causes Ensure claims are dealt with according to TCF Principles 11 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

4. INDUSTRY GUIDANCE PROF CHRISTIE – OCCUPATIONAL DISABILITY CLAUSES: OPINION FOR THE OMBUDSMAN (1998) “No general test can be applied, but in the end the question must be whether it • is reasonable to expect this assured to pursue this occupation.”  Assures against disability, not unemployment  Occupation can’t be “fanciful” 12 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

4. INDUSTRY GUIDANCE PROF CHRISTIE – OCCUPATIONAL DISABILITY CLAUSES: OPINION FOR THE OMBUDSMAN (1998) JAI-ALAI 13 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

4. INDUSTRY GUIDANCE SUE MYRDAL – THE INTERPRETATION AND APPLICATION OF DISABILITY DE FINITIONS (2008) Insurers must specify the particular occupations that it contends the insured can • follow.  Roof carpenter Bench Carpenter  Janitor Security Guard 14 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

4. INDUSTRY GUIDANCE OMBUDSMAN FOR LONG-TERM INSURANCE Ombudsman supported insurer decisions in 63% of disability cases Claims declined (policy terms or conditions not met) https://www.ombud.co.za/useful-information/topics-and-cases 15 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEDBACK AND RESULTS INDUSTRY SURVEY Claims Assessors Pricing Actuaries Product Development Actuaries 16 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEDBACK AND RESULTS INDUSTRY SURVEY – INITIAL PERIOD DEFINITIONS 17 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEDBACK AND RESULTS INDUSTRY SURVEY – EXTENDED PERIOD DEFINITIONS 18 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEBACK AND RESULTS SOURCES OF ASSESSING ALTERNATIVE OCCUPATIONS 19 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEDBACK AND RESULTS INDUSTRY SURVEY – REASONABLE ALTERNATIVE OCCUPATIONS GIVEN ETE Actuary Lecturer • Manufacturing at platinum plant with platinum allergy Other ore plants • Underground electrician Above ground electrician • Sales representative Administrative work • 20 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEDBACK AND RESULTS MOST SIGNIFICANT OBSTACLES IN TERMINATING CLAIM AT CHANGE OF DEF INITION Percentage of respondents 21 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEDBACK AND RESULTS MOST SIGNIFICANT OBSTACLES IN TERMINATING CLAIM AT CHANGE OF DEF INITION Percentage of respondents 22 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEDBACK AND RESULTS MOST SIGNIFICANT OBSTACLES IN TERMINATING CLAIM AT CHANGE OF DEF INITION Percentage of respondents 23 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEDBACK AND RESULTS MOST SIGNIFICANT OBSTACLES IN TERMINATING CLAIM AT CHANGE OF DEF INITION “… disabled from carrying out his own occupation or any other occupation which he could reasonably be expected to follow, taken into account his age, education, training, knowledge, status , ability or experience. ” 24 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEDBACK AND RESULTS SIGNIFICANT STAKEHOLDERS 25 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEDBACK AND RESULTS NUMBER OF CLAIMS TERMINATED PER 100 IN FORCE AT CHANGE OF DEFINI TION Number claims grouping 26 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEDBACK AND RESULTS NUMBER OF CLAIMS TERMINATED PER 100 IN FORCE AT CHANGE OF DEFINI TION Number claims grouping 27 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEDBACK AND RESULTS NUMBER OF CLAIMS TERMINATED PER 100 IN FORCE AT CHANGE OF DEFINI TION 28 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEDBACK AND RESULTS – CASE STUDY ONE 46 year-old saleslady, repeated hernia complaints “inability to perform own or any other occupation for gain or reward to which the life assured would be reasonably suited by education, training, earnings, status or experience . ” 29 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEBACK AND RESULTS CASE STUDY ONE – INDUSTRY RESPONSES 30 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEBACK AND RESULTS CASE STUDY ONE – INDUSTRY RESPONSES 31 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEBACK AND RESULTS Sales job Seated job Accommodated job Limited alternatives Cashier Admin work 32 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEBACK AND RESULTS CASE STUDY TWO 40 year-old bus driver • Suffered gunshot wound • Left leg amputated above the knee, wears a prosthesis • “inability to perform own or any other suited occupation for which he is or could reasonably be expected to become qualified by his knowledge, training, education, ability and experience. ” 33 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEBACK AND RESULTS CASE STUDY TWO - RESPONDENTS 34 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

5. SURVEY FEEBACK AND RESULTS Office job Teaching or admin work Can Disabled – be reskilled Young even prior jobs Drive Alternative Not job with automatic incapable company Foreman vehicle of working Prior occupation No ‘office job’ Handyman Limited training alternative or jobs maintenance 35 ACTUARIAL SOCIETY 2019 CONVENTION | 22 - 23 OCTOBER 2019

5. SURVEY FEEBACK AND RESULTS 36 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

6. POSSIBLE SOLUTIONS TO CONSIDER REGULAR TERMINATION BASIS UPDATES Fewer claimants terminating at change of definition • Bases should reflect current experience • Impacts fully credible scheme pricing • 37 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019

6. POSSIBLE SOLUTIONS TO CONSIDER BENEFIT STRUCTURES Definitions “CI” type definitions • Functional Impairment hybrid • “Own” throughout definition • “Reasonable” throughout definition • 38 ACTUARI AL SOCI ETY 2019 CONV ENTI ON | 22 - 23 OCTOBER 2019