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Actuarial Adjustment

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Actuarial Adjustment
In insurance and pensions, a change made to a company's premiums, reserves, or finances based on actual or expected changes to the benefits it must pay out. For example, if a disproportionate number of pensioners retire early, the company providing their pensions must adjust its reserves downward and/or its premiums upward to account for the benefits it must pay before it expected to do so. A company may also make actuarial adjustments to benefits themselves; for example, those persons retiring early may find their monthly pension payments are less than expected.


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45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, presumed that it would be impractical for employers to obtain the actual amount of the actuarial adjustment.
It also reflects the effects of a change in the timing of actuarial adjustments for insurance expense, which resulted in a reduction in favorable actuarial adjustments compared to the prior year quarter.
Our measure is the risk premium for the specific subscriber because the actuarial adjustment is specific to the age and health of the subscriber.
 
 
 
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