FARM vs RSP - coverage required/underwriting

jc2018jc2018
in Dutil.FA

Hi,

In the 2014 Fall Q13 a, the coverage requirements lists "Must have at least minimum auto coverage" under FARM and "any coverage" under RSP.
It makes sense for FARM since on the 2nd page of the reading, it says that in the 2nd paragraph. However, for RSP, on page 5 point 3 states that "each risk transferred into the pool should carry at least the minimum third party liability statutory limit required in the applicable province". Is this not the same as the requirement for FARM?

As well, 2016 Spring Q9 c ii seems to note what I noted above as a criteria for RSP whilst it is not in FARM.

So what exactly is the difference between the two and also isn't "coverage requirement" part of "underwriting" in a grand scheme of things?

On a separate note, where does the "treatment of losses in Ontario PP Automobile Filing" information come from? 2017 Spring 7 b iv. I do not see this being listed in the reading anywhere.

Thank you,

Comments

  • grahamgraham

    For your last question, 'treatment of losses in Ontario PP Auto Filing" is from the FSCO.PPA reading. Check BattleCards 21 & 22 in the Full BattleQuiz for that reading. (I will need to change the reference for 2017.Spring #7b(iv) to reflect that.)

    Regarding 2016.Spring # 9c(ii), the examiner's report has a better answer there versus the answer they provided for 2014.Fall # 13a. In 2014.Fall, when they said "any coverage" under "RSP coverage requirements", I interpreted that to mean that after the risk had been accepted by the insurer, the insurer could then cede any coverage to the pool. (Ex: collision only.) But since it passed the company's U/W criteria, it must already have the minimum statutory coverage, which is what you were saying in your question.

    For the answer to 2016.Spring, it looks to me like Sample Answer # 1 is the one that was written by the CAS, and Sample Answer # 2 was an actual candidate answer because it isn't as neatly laid out. It looks like the candidate wasn't quite sure what was required in the answer, and they tried to include everything they knew about FA to make sure they didn't miss anything.

    I will make a few changes to the wiki to address this and hopefully make things clearer.

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