Speaker: James Carson
Title: Backdating of Life Insurance Policies from an Actuarial Perspective.
Affiliation: FSU, College of Business.
Date: Friday, April 13, 2007.
Place and Time: Room 101 - Love Building, 3:45 pm.
Reception: Room 204B, Love Building, 3:15 pm.

Abstract. Backdating is a common (and legal) practice in the U.S. whereby a life insurance contract bears a policy date that is prior to the actual application date. This practice often leads to reduced annual premiums for some insureds, but at a cost that might not be recovered, depending on several factors. We investigate the optimality of this practice, and provide several insights. Among other findings, it appears that backdating serves as a substitute for a finer partitioned pricing structure in the life insurance industry, as a risk-hedging mechanism for insurers, and as a risk-arbitrage tool for consumers.