EIOPA opinion: Use of climate change risk scenarios in ORSA
The European Insurance and Occupational Pensions Authority (EIOPA) has published its opinion on the supervision of the use of climate change risk scenarios in ORSA.
In many healthcare systems and health insurance markets around the world where risk rating is not allowed, risk equalisation is used to enhance consumer protection and market stability. Its aim is to compensate for the risk profiles of different groups of the population such that the additional medical expenses associated with high-risk members are shared amongst healthcare providers or insurance companies. This is generally achieved by the transfer of payments through a risk equalisation pool, or similar mechanism. In this paper we have set out a 'how-to' guide to risk equalisation, or risk adjustment.