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Comparative Analysis of Disability Insurance Models in the US and Canada

This study compares US and Canadian disability insurance models, examining coverage, populations, and trends. Analyzing data from the SOA 2005 meeting and discussions on waiver tables and mortality rates.

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Comparative Analysis of Disability Insurance Models in the US and Canada

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  1. CIA meeting Group Hot TopicsSOA 2005 Waiver Table Denis@garandnet.net

  2. Is the US different then Canada? • Most but not all Canadian group waiver based on LTD definition • US Disability covered population lower then Canada as a proportion of population insured • US can still exclude Mental and Nervous disorder • 9 month elimination period

  3. Is Kreiger out of date? • Based on 1970’s at that time: • Workforce had much higher male participation compared to women (15% F in Krieger versus 40% currently) • Overall work was harder and population health during working life time worst. • Overall mortality has improved substantially since 1970’s • Medical interventions improved. • Etc.

  4. First impressions SOA 2005 • Compared to ~Krieger basic (now sex distinct!) A/E Total select ultimate Death 56% 59% 53% Recovery 102% 98% 174% Reserve 60% 62% 61% • Ratio female to male death rate • Select period 72%, higher at older ages • Ulitmate period 79% • Termination rates lower than Canadian experience

  5. Comparing a few tables • Block of ~50,000 lives • 592 currently open waiver reserves • Reserve basis @ 5% res (mil) exp Death • Kreiger Basic 8.5 45.6 • SOA 2005 5.6 29.9 • Muirhead Table 3.6 17.5

  6. Conclusion • Kreiger no longer relevant for Canada • SOA 2005 still does not reflect Canadian data • Muirhead table closest to Canadian population • Need to adjust valuation and pricing models for current waiver risk!

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