What is the difference between P1 and P2?
If assuming insurer and reinsurer is the same then what would be the difference between payable premiums and expected future premiums?
Regarding P1 above I also noted it appears in the deduction for unregistered reinsurance but I don't understand why it has the same sign as reinsurance commissions (which is an amount paid to the insurer from the reinsurer). That would mean P1 is also payable to the insurer from the reinsurer. But then I'm confused because the assuming insurer is the reinsurer
Premiums payable are for reinsurance contracts already in-force whereas expected future premiums are for contracts that are going to be in-force, but not yet active. The source doesn't expound on Formula A too much so I can't help you there unfortunately. Although, I will add it is not necessary that inflows and outflows have the same sign here because B represents the AIC (Asset) which has the same sign as premiums payable
I am not sure. The MCT paper only says it is the amount of payables to the insurer not included in A2. This is more an accounting concept rather than actuarial
P.S. @miguel - If you can do the problem the way it's presented in the text then you should be fine on the exam. I suspect some of these issues will be cleared up in subsequent versions of the MCT and CCIR readings.
Comments
Regarding P1 above I also noted it appears in the deduction for unregistered reinsurance but I don't understand why it has the same sign as reinsurance commissions (which is an amount paid to the insurer from the reinsurer). That would mean P1 is also payable to the insurer from the reinsurer. But then I'm confused because the assuming insurer is the reinsurer
Premiums payable are for reinsurance contracts already in-force whereas expected future premiums are for contracts that are going to be in-force, but not yet active. The source doesn't expound on Formula A too much so I can't help you there unfortunately. Although, I will add it is not necessary that inflows and outflows have the same sign here because B represents the AIC (Asset) which has the same sign as premiums payable
I'm still confused. Can you please explain the difference between (26) and A2 in page 70.60?
I am not sure. The MCT paper only says it is the amount of payables to the insurer not included in A2. This is more an accounting concept rather than actuarial
P.S. @miguel - If you can do the problem the way it's presented in the text then you should be fine on the exam. I suspect some of these issues will be cleared up in subsequent versions of the MCT and CCIR readings.