JLN Process - Reserve Fund Management

Process Group

Financial Operations Management

Objective

Assure sustainability of the health insurance scheme, and to buffer the scheme from unpredicted liabilities
by maximizing investment income

Input

• Excess income from previous years

• Contribution from the treasury specifically ear-marked for reserves

• Other sources of income which can be channeled to the reserve fund (such as settlement of litigation in favor of the reserve fund, windfall profits, etc.)

Output

• Reserve fund should be an amount as a percentage of predicted claims payouts for the next year of a percentage which is consistent with international reserve accounting standards. Normally the fiscal oversight agency of a country (insurance commission, central bank, or the treasury) determines the percentage

Measurable Outcomes

• Reserve fund reasonably assures the sustainability of the Fund

• Reserve fund grows at a rate commensurate with other comparable reserve funds

Sources

• Joint Learning Network, 2012

• File: NHIIS_Phase_1_Public_Report_JLN_IT_Workshop_FINAL_Jan182012_A4.pdf