- Froogled By:
- Elias Makere, FSA, MAAA
- Last Froogled:
ASOP 3 | §3.4 | COHORT PRICING ANALYSIS
The actuary should use a population projection that is performed solely with respect to a cohort of new contractual residents or new members. The actuary should project surviving contractual resident or member movements through various levels of care until contract termination. This population projection excludes any non-contractual residents.
The revenues include the advance fees, the actuarial present value of future periodic fees (described in section 3.6.1), and the actuarial present value of future additional fees and third-party payments (described in section 3.6.2).
The expenses include the actuarial present value of each of the following: the future use of physical property (described in section 3.6.4), the future operating expenses (described in section 3.6.5), and the future refunds due to refund guarantees (described in section 3.6.6).
The actuary may consider, subject to disclosure, the use of expense levels consistent with the targeted number of contractual residents or members when a material change in the population, such as growth resulting from new construction or expansion, is expected.
ASOP 3 | Commentary Section 3.4 | COMMENT ON SECTION 3.4
| Comment | Response |
|---|---|
| One commentator suggested that the ASOP should provide an example of the methodology regarding temporary transfers among levels of care. | The reviewers noted that the concept of temporary transfers is discussed in sections 2.27 and 3.7.1. The reviewers also note ASOPs are principles based and are not educational in nature, and made no change in response to this comment. |
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