Another system for financing medical services that is different from a fee-for-service method (e.g., capitation).
Insurance Encyclopedia
Alternative funding mechanism
Method designed to provide the account with a more favorable cash flow (e.g., self-funding and deferred premiums).
Alternative markets
Mechanisms used to fund self-insurance, including captives, which are insurers owned by one or more non-insurers to provide owners with coverage. Risk-retention groups, formed by members of similar professions or businesses to obtain liability insurance, are also a form of self-insurance.
Alternative medicine
Nontraditional medical care given by providers such as acupuncture, aroma therapy, chiropractic, diet, exercise, faith healing, homeopathy, Indian Ayurvedic medicine, massage, meditation, mind/body therapies, nutritional and herbal medicine, stress management, and therapeutic touch. A number of health insurance companies and managed care organizations have begun to provide insurance coverage for a few of these alternative therapies. Alternative billing codes (ABCs) are used to bill for these services. Also see integrative health care and alternative billing codes (ABCs). Website: www.alternativelink.com
Alternative Probability
Probability of any one of two or more events. If A and B are two events, the alternative probability of either one of them is expressed as “p(A or B).”Probability, Conditional Probability : Probability of one event given that another event has already occurred. If A and B are two events, then the probability of A, given that B has occurred, is expressed as “p(A or B).”Probability, Joint Probability : Probability that two (or more) events will both (or all) occur. If A and B are two events, the joint probability of both is expressed as “p(A or B).”Probability Distribution : A listing of all the possible outcomes that might occur and the probability of each possible outcome. The sum of these probabilities must equal 1.
Alternative Risk Financing
Use of the capacity available on capital markets to cover insurance to cover insurance risks e.g. through the securitization of natural catastrophe risks. See Also: “Risk Management: Alternate Risk Transfer (ART).”
Alternative risk financing An ART (qv)
term describing techniques that provide a funding source other than conventional (re)insurance to meet defined risks. The insured may seek to smooth his earnings over a period of years and seek committed funding to deal with prospective loss and/or secure post-loss funding. The insurer taking the risk combines discounted cashflow techniques with actuarial risk analysis. Techniques include: finite reinsurance, financial reinsurance and contingent capital.
Alternative Risk Transfer
methods of transferring insurance risk, other than by conventional reinsurance.
Alternative risk transfer (ART)
Generic phrase to denote various non-traditional forms of (re)insurance and techniques where risk is transferred to the capital markets. More broadly it refers to the convergence of (re)insurance, banking and capital markets. See FINANCIAL REINSURANCE; FINITE REINSURANCE; SECURITISATION; ALTERNATIVE RISK FINANCING; WEATHER DERIVATIVES. (See Figure 1).
Alternative work assignment
In workers’ compensation case, the placement of an injured worker in another job with the same employer as a temporary or permanent accommodation to the workers’ disability.