Deduction from capital available (F)

MrGameNWatchMrGameNWatch
in OSFI.MCT

Why premium payable is not included in (F) in the MCT excel worksheet Problem #3 (see upload picture from 2024 MCT Guidelines)?

Thus, "premiums payable to the assuming insurer" of 145$ labeled as "A2" should be added back in F. Is that correct ?

Thanks,

Comments

  • Staff-T1Staff-T1

    It was split out to make it clearer as A goes into the deduction and LOC limit. However, this does not change anything

  • MrGameNWatchMrGameNWatch

    Thanks for your response.

    I noticed something else. D (amount of receivable) should only be consider for Foreign branch (see the attached picture) in the deduction for both capital available and margin required.

    Why, D was not forced to 0$ in the Problem #3 of the MCT workbook given that the question did not specifically state that the reinsurance receivables was coming from a Foreign branch ?

    Thank you !

  • Staff-T1Staff-T1
    I think that's a fair point. That said, it's just meant to be an example of how the calculation will be done. I don't think the CAS will test to this level of detail (i.e. penalizing a candidate for subtracting D given that it's not from a foreign branch) Although I guess there could be a "receivables from foreign branches" cell but that would make the question a lot more convoluted than it needs to be
  • MickyBMickyB

    Hi, so I understand we deduct from capital avialable only when (A+B+C)-(D+E+F+G+H) is greater than 0. But My understanding is we only deduct it from the capital available amounts and its one of the "adjustments" that we make to capital available. In your excel problem for OSFI.MCT Capital Required, we are deductible the that amount from the capital required as well?

  • NycxBattleNycxBattle

    Hi Micky,

    These are actually two different concepts.

    It’s two different parts of the MCT. One is for capital available one is for margin

  • Staff-T1Staff-T1
    No, you're supposed to deduct (D+E+F+G+H) - (A+B+C) if it is greater than zero. I've attached the corrected files here
Sign In or Register to comment.