Chapter 21: Mortality and morbidity

Question 1

Selection/anti-selection or adverse selection

Answer 1

taking advantage of inefficiencies in a provider’s pricing basis to secure better terms than might otherwise be justified, normally at the expense of the product provider

Question 2

limit the extent to which rating factors can be used

Answer 2

• the ability of prospective policyholders to provide accurate responses to questions
• the cost of collecting information

Question 3

Factors by which mortality and morbidity vary

Answer 3

• occupation
• nutrition
• housing
• climate/geography
• education
• genetics
• HIV status

Question 4

Temporary initial selection

Answer 4

Where the level of risk diminished or increases since the occurrence of a selection process.

Question 5

Class selection

Answer 5

Where a select group is taken from a population consisting of a mixture of different types of individual with different characteristics

Question 6

Time selection

Answer 6

Where a select group is taken from a population of individuals from different calendar years

Question 7

Adverse selection

Answer 7

Where the individual’s own choice influences the composition of a select group

Question 8

Spurious selection

Answer 8

Where the distorting effect of a confounding factor gives the false impression that one of the forms of selection is present

Question 9

Decrements and a selective effect

Answer 9

Decrements may be found to have a selective effect. A selective decrement will ‘select’ from the population lives whose rate of decrement from another cause differs from that of the whole population.