Market Adjustments in the BCAR Model
The text mentions that market changes such as interest rate changes, stage of the underwriting cycle, and reinsurance dependence, can be reflected in the model. Do we need to know any other way of doing this besides adjusting the capital required for each category (e.g. changing B5/B6 depending on what stage of the underwriting cycle we are in)?
Comments
For the purpose of this exam, I do not think you will need to know that