Practice: 4 FCT Financial Condition problems

HateExams99HateExams99
in CIA.FCT

Hi,

Why is the 3rd example in satisfactory condition? The going-concern and solvency scenarios all failed, i.e. step 1b, 1c and 1d.

https://www.battleactsmain.ca/pdf/CIA.FCT-1_(050)_financial_condition_practice_v02.pdf
page 6

Comments

  • Staff-T1Staff-T1

    It's a trick question - The length of the forecast period is 3 years. The insurer only fails the going concern and solvency scenarios in years 4 and after, which means they meet the requirements during the forecast period

  • HateExams99HateExams99

    Got it, thanks!

  • grahamgraham

    I included that example because that's exactly the kind of trick I could see showing up on the exam! (That question has been asked by students multiple times so you are not alone!)

  • MickyBMickyB

    For practice problem 1, the mct ratio > internal target but here asses are also lower then liabilities for 3 out of the 4 forecast periods... is it still a pass if the base scenario wouldn't pass if it was the solvency scenario?

  • Staff-T1Staff-T1

    I am not sure which question you are referring to. Question 1 in the pdf above has Assets > liabilities for the whole forecast period

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