Finance Department

 

Date of this Version

1996

Document Type

Article

Citation

Journal of Actuarial Practice 4 (1996), pp. 209-227

Comments

Copyright 1996 Absalom Press

Abstract

This paper addresses a few of the most important pricing issues faced by a third party administrator (TPA) whose main responsibility is claims handling for self·insured employers and self·insured groups. Such pricing issues include the development of service fees using claim closure information, the selection of service durations, and the design of incentive (either activity-based or financially-based) service contracts. Formulas for pricing new and open claims are provided.

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