What is "actuarial certification" in health insurance?

Actuarial certification refers to the formal affirmation provided by actuaries regarding the adequacy of premium rates and the sufficiency of reserves that an insurance company holds. This certification is crucial in ensuring that the insurer has calculated its premiums accurately and set aside enough reserves to cover potential future claims. Actuaries use statistical methods and financial theories to estimate future events, including claims that will be made and the associated costs, thereby affirming the financial health of the insurance product. This process fosters confidence in the stability of the insurance company, regulatory compliance, and the overall integrity of financial reporting within the insurance industry.

In contrast, analyzing customer satisfaction metrics, reviewing insurance claims by different actuaries, or reporting the number of insurance policies sold does not pertain to the core purpose of actuarial certification, which is fundamentally focused on the technical and financial assessment of policies and reserves.