Actuarial Notes

Exam GH-201U

GH 201-U – Valuation and Regulation, U.S. is an exam of the Society of Actuaries' Fellowship (FSA) pathway. Its syllabus covers the Nov 2026/Mar 2027/Jul 2027 sittings.

Learning Objectives

Reserving (30–40%) The candidate will understand how to apply valuation principles for short duration group and health insurance contracts.

  1. Describe the types of claim reserves
  2. Explain the limitations and biases of the traditional valuation methods
  3. Calculate appropriate claim reserves given data
  4. Describe, calculate, and evaluate the impact of environmental factors on reserve calculations (trend, seasonality, claims processing changes, etc.)
  5. Evaluate data resources and appropriateness for calculating reserves
  6. Describe, calculate, and evaluate non-IBNR types of reserves and explain when each is required
  7. Apply applicable best practices related to reserving

Readings:

  • Video: Valuation at the Heart of Health Insurance (Background)
  • Video: Health Valuation and Stakeholder Views (Background)
  • Group Insurance, Skwire, Daniel D., 8th Edition, 2021 (1a-1e, 1g)
    • Ch. 39: Claim Reserves for Short-Term Benefits
  • GH201-100-25: Health Reserves (1a-1g)
  • Premium Deficiency Reserves Discussion Paper, AAA, Mar 2007 (1f)
  • GH201-407-26: Supplement to PDR Paper (1f)
  • ASOP 5: Incurred Health and Disability Claims (excluding Appendices) (1g)
  • ASOP 7: Life or Health Cash Flow Analysis (excluding Appendices) (1g)
  • ASOP 23: Data Quality (excluding Appendices) (1g)
  • ASOP 41: Actuarial Communications (excluding Appendices) (1g)
  • ASOP 42: Health and Disability Actuarial Assets and Liabilities Other than Liabilities for Incurred Claims (excluding Appendices) (1g)

Financial Statements (25–35%) The candidate will understand how to prepare and interpret insurance company financial statements in accordance with Statutory Accounting Standards and GAAP.

  1. Prepare a financial statement in accordance with Generally Accepted Accounting Principles (GAAP)
  2. Interpret the results of both statutory and GAAP statements from the viewpoint of stakeholders, including regulators, senior management, and investors
  3. Project financial outcomes and recommend strategy
  4. Evaluate capital needs using RBC and the use of reinsurance to mitigate capital strain
  5. Apply applicable best practices related to financial statements

Readings:

  • Read. Think. Write., Health Section News, Oct 2004 (2e)
  • GH201-400-25: Health Insurance Accounting Basics for Actuaries (excluding Ch. 1 & section 2.2 & Ch. 7) (2a, 2b)
  • ASOP 21: Responding to or Assisting Auditors or Examiners in Connection with Financial Audits, Financial Reviews, and Financial Examinations (excluding Appendices) (2e)
  • Group Insurance, Skwire, 8th Edition, 2021
    • Ch. 43: Analysis of Financial and Operational Performance (2b, 2c)
    • Ch. 41: Risk-Based Capital Formulas (2d)
  • GH201-101-25: Group and Health Reinsurance – A Primer for Actuaries (2d)
  • GH201-402-25: RBC Calculation Examples (2d)
  • GH201-401-25: Structured Reinsurance: Impact on Health Product Pricing (2d)

Regulation (15–25%) The candidate will understand how to evaluate the impact of regulation on insurance companies and plan sponsors in the United States.

  1. Describe the regulatory and policy making process in the United States
  2. Describe the major applicable laws and regulations and evaluate their impact

Readings:

  • Group Insurance, Skwire, Daniel D., 8th Edition, 2021
    • Ch. 4: Health Policy and Group Insurance (3a)
    • Ch. 15: Principles of Health Insurance Regulation (3a)
    • Ch. 16: State Regulation in the United States (3a, 3b)
    • Ch. 17: Federal Regulation in the United States (3a, 3b)
  • Pharmaceutical Patent Regulation in the United States, The Actuary, Feb 2021 (3b)
  • Potential Abuses Within U.S. Pharmaceutical Patent Regulation, The Actuary, Feb 2021 (3b)
  • Federal Regulation of Prescription Drugs in the United States, The Actuary, Feb 2021 (3b)
  • State Regulation of Prescription Drugs in the United States, The Actuary, Feb 2021 (3b)
  • GH201-408-26: A Tale of Two Systems: How Regulatory and Market Structures Make US Gene Therapies Pricier than Europe’s (3b)

Government Programs (10–20%) The candidate will understand how to describe government programs providing health benefits in the United States.

  1. Describe Medicare benefits and evaluate pricing and filing requirements
  2. Describe Medicaid program structure and benefits, and evaluate pricing and filing requirements
  3. Describe the Affordable Care Act and evaluate impacts on pricing and filing

Readings:

  • Group Insurance, Skwire, Daniel D., 8th Edition, 2021 (4a, 4b)
    • Ch. 9: Government Health Plans in the United States, pp. 133-149
  • Medicare Advantage Expanded Supplemental Benefits Over the Years, Health Watch, Special Edition, Mar 2021 (4a)
  • Medicare Advantage Experience Data: Pitfalls and Concerns Beyond ASOP #23, Health Watch, Feb 2019 (4a)
  • GH201-404-25: Medicare Advantage: Eight Critical Considerations for Every Organization as ESRD Eligibility Expands in 2021 (4a)
  • GH201-403-25: Medicare Part D Prescription Drug Benefits (4a)
  • GH201-406-25: Attempting to Boil the Ocean: A High-Level Overview of Medicaid and its Risk-Based Managed Care Programs (4b)
    • Companion Excel: Medicaid Tables
  • ASOP 49: Medicaid Managed Care Capitation Rate Development and Certification, pp. 1- (4b)
  • Group Insurance, Skwire, Daniel D., 8th Edition, 2021 (4c)
    • Ch. 19: The Affordable Care Act
  • GH201-405-25: A Hard Pill to Swallow: Appreciating the Mathematical Dynamics of the Affordable Care Act (4c)

Flow of Funds (5–15%) The candidate will understand how to describe the flow of funds in the health care system and the role of providers in the system.

  1. Establish a framework of how funds flow through the health care system
  2. Describe the role physicians play and their influence on the flow of funds
  3. Describe the market power of hospitals and how provider systems compete for patients, physicians, and contracts
  4. Describe the flow of funds in the Canadian healthcare system and the roles of the provider and government

Readings:

  • GH201-102-25: Flow of Funds in Healthcare System and the Role of Providers (5a-5d)
  • GH201-103-25: Health Economics and Financing, Getzen, Thomas and Kobernick, Michael, 6th Edition, 2022: Sections 5.4 - 5.6, 6.2 - 6.3, 7.4 - 7.5, 8.4 - 8.5, 13.2 - 13.3 (5a, 5c)
  • Sustainability of the Canadian Health Care System and Impact of the 2014 Revision to the Canada Health Transfer, SOA/CIA, Sep 2013, pp. 1-3, 51-54, 82 (5d)

Source Material

Source Material

  • Video: Valuation at the Heart of Health Insurance
    • Background
  • Video: Health Valuation and Stakeholder Views
    • Background
  • Group Insurance, Skwire, Daniel D., 8th Edition, 2021
    • Ch. 39: Claim Reserves for Short-Term Benefits (1a-1e, 1g)
    • Ch. 43: Analysis of Financial and Operational Performance (2b, 2c)
    • Ch. 41: Risk-Based Capital Formulas (2d)
    • Ch. 4: Health Policy and Group Insurance (3a)
    • Ch. 15: Principles of Health Insurance Regulation (3a)
    • Ch. 16: State Regulation in the United States (3a, 3b)
    • Ch. 17: Federal Regulation in the United States (3a, 3b)
    • Ch. 9: Government Health Plans in the United States, pp. 133-149 (4a, 4b)
    • Ch. 19: The Affordable Care Act (4c)
  • GH201-100-25: Health Reserves
    • Outcomes 1a-1g
  • Premium Deficiency Reserves Discussion Paper, AAA, Mar 2007
    • Outcomes 1f
  • GH201-407-26: Supplement to PDR Paper
    • Outcomes 1f
  • ASOP 5: Incurred Health and Disability Claims (excluding Appendices)
    • Outcomes 1g
  • ASOP 7: Life or Health Cash Flow Analysis (excluding Appendices)
    • Outcomes 1g
  • ASOP 23: Data Quality (excluding Appendices)
    • Outcomes 1g
  • ASOP 41: Actuarial Communications (excluding Appendices)
    • Outcomes 1g
  • ASOP 42: Health and Disability Actuarial Assets and Liabilities Other than Liabilities for Incurred Claims (excluding Appendices)
    • Outcomes 1g
  • Read. Think. Write., Health Section News, Oct 2004
    • Outcomes 2e
  • GH201-400-25: Health Insurance Accounting Basics for Actuaries (excluding Ch. 1 & section 2.2 & Ch. 7)
    • Outcomes 2a, 2b
  • ASOP 21: Responding to or Assisting Auditors or Examiners in Connection with Financial Audits, Financial Reviews, and Financial Examinations (excluding Appendices)
    • Outcomes 2e
  • GH201-101-25: Group and Health Reinsurance – A Primer for Actuaries
    • Outcomes 2d
  • GH201-402-25: RBC Calculation Examples
    • Outcomes 2d
  • GH201-401-25: Structured Reinsurance: Impact on Health Product Pricing
    • Outcomes 2d
  • Pharmaceutical Patent Regulation in the United States, The Actuary, Feb 2021
    • Outcomes 3b
  • Potential Abuses Within U.S. Pharmaceutical Patent Regulation, The Actuary, Feb 2021
    • Outcomes 3b
  • Federal Regulation of Prescription Drugs in the United States, The Actuary, Feb 2021
    • Outcomes 3b
  • State Regulation of Prescription Drugs in the United States, The Actuary, Feb 2021
    • Outcomes 3b
  • GH201-408-26: A Tale of Two Systems: How Regulatory and Market Structures Make US Gene Therapies Pricier than Europe’s
    • Outcomes 3b
  • Medicare Advantage Expanded Supplemental Benefits Over the Years, Health Watch, Special Edition, Mar 2021
    • Outcomes 4a
  • Medicare Advantage Experience Data: Pitfalls and Concerns Beyond ASOP #23, Health Watch, Feb 2019
    • Outcomes 4a
  • GH201-404-25: Medicare Advantage: Eight Critical Considerations for Every Organization as ESRD Eligibility Expands in 2021
    • Outcomes 4a
  • GH201-403-25: Medicare Part D Prescription Drug Benefits
    • Outcomes 4a
  • GH201-406-25: Attempting to Boil the Ocean: A High-Level Overview of Medicaid and its Risk-Based Managed Care Programs
    • Companion Excel: Medicaid Tables (4b)
  • ASOP 49: Medicaid Managed Care Capitation Rate Development and Certification, pp. 1-
    • Outcomes 4b
  • GH201-405-25: A Hard Pill to Swallow: Appreciating the Mathematical Dynamics of the Affordable Care Act
    • Outcomes 4c
  • GH201-102-25: Flow of Funds in Healthcare System and the Role of Providers
    • Outcomes 5a-5d
  • GH201-103-25: Health Economics and Financing, Getzen, Thomas and Kobernick, Michael, 6th Edition, 2022: Sections 5.4 - 5.6, 6.2 - 6.3, 7.4 - 7.5, 8.4 - 8.5, 13.2 - 13.3
    • Outcomes 5a, 5c
  • Sustainability of the Canadian Health Care System and Impact of the 2014 Revision to the Canada Health Transfer, SOA/CIA, Sep 2013, pp. 1-3, 51-54, 82
    • Outcomes 5d