The health valuation line at a glance
Health reserves run on the Health Insurance Reserves Model Regulation (Model 010): contract reserves on preliminary-term methods, claim reserves for everything incurred but unpaid, and premium reserves with a gross-modal floor. The Valuation Manual barely touched it — VM-25 routes back to the model with two patches — and long-term care adds its own layer, AG 51's stand-alone asset adequacy test.
Products
The two health lines that matter for valuation work.
What defines the health line
Three stacked reserves
Contract (active-life), claim (disabled-life), and premium reserves — each with its own basis, tables, and adequacy machinery.
Morbidity, not mortality
DI has prescribed tables (85CIDA, then the 2013 IDI); LTC has none — the actuary builds tables the commissioner will accept, and AG 51 forces the assumptions into the open.
LTC's lapse exception
The one product where lapse assumptions are allowed in contract reserves — capped, because lapse-supported pricing is the product's original sin.
Key health documents
- Model #010 — Health Insurance Reserves Model RegulationContract, claim, and premium reserves. Link follows the NAIC URL pattern; text verified against enacting states.
- AG 51 — Stand-alone LTC asset adequacy testingThe binding LTC testing guideline (2017).
- Model #641 — LTC Insurance Model RegulationRate stability, the 58/85 rate-increase test, nonforfeiture. Link follows the NAIC URL pattern.
- 2013 IDI Valuation Table (SOA)The current DI morbidity basis.
- Academy — LTC practice note (2021)The profession's LTC valuation Q&A, including contract-reserve practice.