LE*XPOSURE™ Exposure Study

Opportunities exposed

LE*XPOSURE™ is a powerful exposure study and Monte Carlo simulation system for traditional life insurance.

• Studies (and simulations) can be performed on both policy count and face amount bases.
• The face amount basis can be gross or net of reinsurance and optionally adjusted by a multiplicative factor.
• A flexible definition of reinsurance is provided which can handle reinsurance recapture.
• Studies can be by plan group, plan, attained age, or policy year.
• Results can be reported as actuarial rates (q) or as central rates (m).
• The reports detail the decrement being studied, the exposures, the actual rates, the expected rates, and the actual to expected ratios.
• Goodness-of-fit tests are performed between actual and expected rates.

You choose the statuses

There are up to three stages in the life of a policy. They are triggered when (1) a policy is issued, (2) when a policy goes onto nonforfeiture status (ETI or RPU), and (3) when a policy terminates. Reinsurance and expected mortality, lapse, and shock lapse rates can vary by stage (1) or (2). Expected mortality rates reflect table ratings for substandard policies. The user can select which of the following statuses to include:

• Premium-paying
• Premiums being waived
• Normal paid-up
• ETI
• RPU

Cause of death option

Studies can be performed to determine mortality rates for selected causes. As an example, deaths can be coded as accidental and non-accidental. Then a study can be performed to measure accidental death benefit rates.

Withdrawal definitions

You can choose any combination of the following: normal paid-up starters, ETI starters, RPU starters, lapses, conversions, deaths of chosen causes, other deaths, surrenders, maturities, expiries, ICOS deaths of chosen causes, other ICOS deaths, and rescissions. By selecting all of these, a study of total termination rates can be performed.

Monte carlo simulations

LE*XPOSURE™ can perform Monte Carlo simulations which can be used to support the actuarial opinion and the appropriateness of X factors under Regulation XXX. There are several options with respect to sample size, type, decrement timing and pattern. The reports detail the actual decrement being simulated, its mean simulated values, the sample standard deviations, the significance levels, and the actual to mean simulated ratios.