We assist clients with product design, pricing, and ways to transfer risk from consumers to risk-taking entities. These clients are the product development teams of lenders, retailers, insurers, administrators, and product innovators as well as their professional advisers. By specializing in these products for over 35 years, our professional staff has a broad understanding of all of the actuarial, lending, regulatory, tax, and statutory/GAAP accounting pronouncements that may affect how the risk is transferred.

Tasks We Undertake

We assist lenders, retailers, administrators, and insurers in designing and pricing DPP programs. We specialize in analyzing new product ideas or modifications:

For credit card programs. We evaluate new protected events for existing programs or we recast existing protections for a particular segment of borrowers, such as non-working persons. We begin by understanding the proposed contingency or borrower segmentation, and finding relevant demographic and loss data. We then develop expected loss costs, and prepare an actuarial memorandum that a product innovator can use when presenting the concept to lenders’ risk managers and product managers or to potential insurers/risk takers.

For existing credit card programs. We serve as the consulting actuary, assisting the product managers and risk managers with setting the dollar reserve that will be held in the lender’s financial statement and setting the benefit reserve percentage that the lender will use in performing reserve calculations and for corporate budgeting and forecasting purposes. We review the loss experience of about 10 million DPP-protected cardholders each year.

For real estate secured lending. We assist the risk takers with a dollar estimate of the reserve that should be held in the financial statements and with an estimate of the benefit reserve percentage to be used for reserve calculations, budgeting and forecasting. We periodically review the case loss experience of an administrator or insurer, providing a historical summary of the experience of each case and in total for all cases. In addition, we provide a quarterly analysis from our CARS (CreditRe Analysis and Reserving System) that provides detailed loss demographics, data displays, and loss experience at the granular level.

We file insurance policy forms, rates, and other regulatory filings. We provide complete support for the regulatory filing process. We are a licensed third-party provider of SERFF filings, with a license to utilize EFT. For insurance policy forms filings, we will assist in the development of policy forms. In addition, we will file those forms in all U.S. jurisdictions.

For insurance rate filings, we provide a broader range of services. We will assist in development of the rates, preparation of supporting actuarial memoranda, preparation of a basic rate support package including manual rates, and preparation of all state-specific supporting data presentations. We will file those rates in all U.S. jurisdictions and will provide complete support in handling filing objections. In particular, we have provided contractual liability insurance (CLIP) filing support for just about every contingency contained in credit card DPP programs.

We testify in legal disputes. Disputes between consumers and lenders/obligors/insurers, between lenders or insurers and their regulators, and among insurers/reinsurers/administrators/marketers are a part of our day-to-day environment. We have provided expert reports and opinions, as well as testimony, in a wide variety of dispute resolution forums, including state and federal courts, U.S. Tax Court, and reinsurance arbitration and mediation. We work to ensure that your views receive a fair and balanced assessment by the appropriate decision-maker.

We teach. Our professionals have spent over 35 years teaching business people about the complex products used in this marketplace, the diverse risk transfer structures that have evolved, and the actuarial underpinnings related to pricing and reserving for these products and structures. We want you to understand the work we perform and present to you. Day in and day out we teach through our individual consulting projects, through our publications, through our presentations at industry meetings, through CreditRe seminars and conferences, and through in-house presentations.

We have fun. We truly enjoy the evaluation of the risks associated with the products that we have specialized in for 20 years and enjoy communicating our knowledge to our clients.