African Journals Online
South African Actuarial Journal

This paper attempts to clarify the different paradigms from which defined benefit funds are viewed, and the financial nature of the contracts implicit in their rules. Suggestions are made as to the principles that trustees might follow in applying the surpluses for the benefit of stakeholders.

Pension funds; surpluses; defined benefit; fiduciary duties

The consequences of the HIV/AIDS epidemic in Africa are expected to be considerable. A great deal of what is presently known about the HIV/AIDS epidemic has originated from studies in Europe or the Americas, or from urban African contexts. In contrast, the majority of people in sub-Saharan Africa infected with the virus will live in rural communities. It is important that demographic information be obtained for this rural African environment. This contribution is aimed at investigation and verification of HIV-1 mortality patterns in a rural African context. The

authors examine eight years of incident HIV mortality data arising from the Masaka district in Uganda. These data are bivariate and of a type termed doubly censored. The authors explore the non-parametric procedures required for estimation of self-consistent patterns using doubly censored data. Information on age and gender is also incorporated into the analyses. The results are parameterised using a range of survival probability models. The Gompertz probability model provides a reasonable emulation of eight years of empirical underlying hazard, over all age classes, and can be considered as a reasonable first approximation to the HIV/AIDS mortality model for the phenomenon and context of this study. The results also indicate that expected time to death at seroconversion is appreciably affected by age at seroconversion. Extrapolation of these mortality patterns into the future will, however, necessarily remain unsubstantiated until further data become available and the ability to generalise these findings to other contexts remains a subject worthy of further study.

AIDS/HIV modelling; HIV-1 mortality; doubly censored data; African AIDS mortality patterns;

THE FALL OF THE BAMBOO CURTAIN: A REVIEW OF COMPLEMENTARY MEDICINE IN SOUTH AFRICA

This paper considers the increased interest in and usage of complimentary medicine. The movement is being led worldwide, not by healthcare professionals or the funders of healthcare, but by consumers. In South Africa, a pilot study was undertaken in 1999 to identify existing sources of data and collate information as an initial baseline of the practice of and interest in complimentary medicine. This paer summarises the findings of that study. The legal framework of for the practice of complementary medicine in Sout Africa is described, the range of therapies is given and the number of practitioners estimated. First indications of the use of by consumers and the coverage by medical schemes are reported. An introduction to to the status of African traditional medicine is given. Resources for the actuary wishing to gain more understanding of this consumer-driven movement are suggested.

Healthcare; complementary medicine; alternative medicine, traditional medicine; medical schemes

By HD Mcleod, PG Slattery & Am Van Den Heever

An investigation by the regulatory authorities into the use of reinsurance by medical schemes indicated clear problems with reinsurance agreements and cases where the contracts were resulting in substantial losses for members of schemes. It was shown that a number of cases reinsurance had become a conduit for systematically removing surplus from medical schemes. Thus undermining the security of members of those schemes. This paper summarises the key features of the investigation into the use of reinsurance by medical schemes over the period 1996 to 1999. The paper then outlines the actions taken by the regulatory authorities. The specific areas of abuse are described and the conduct of trustees, brokers, administrators and insurance companies is discussed. This leads to the question of the professional responsibilities of actuaries in the design and implementation of these arrangements.

Medical schemes; reinsurance; regulation; professionalism, trustee responsibility

This paper presents an empirical approach to immunizing South African nominal liabilities in the presence of non-parallel yield-curve shifts. The results are compared with immunization strategies based on Fisher-Weil duration and illustrate the value in immunizing against non-parallel shifts.

Immunization; South Africa; principal components; nominal liabilities; arbitrage