CAS Exam S19 Questions

stratthixxstratthixx
in PRACTICE EXAM

I couldn't find any other category to ask this in:

S19Q4d

If I stated

  1. loss data (paid and incurred)
  2. Disc rate used, and methodology behind selection
  3. Rating algorithm (including random variables, rates)

Would this be sufficient? The solution stated "All data to support filing"

S19Q10a

Do you think points would have been provided if I stated Social purpose and necessary as two separate points? The solution did not include both, but it did state that the answers given were "sample".

I went on and answered part b using social purpose and necessary as two separate criteria. Would marks be lost for that as well?

S19Q13

I assumed and stated my assumption of UP margin amounts at end of yr (t = 1,2,3). Would I lose marks for this?

S19Q14d

I stated evaluating proj LR on a Gross basis and Net basis. I am unsure if these would count, because in my interpretation of the question, I thought it would.

S19Q17

The question stated all payments are mid-yr so I assumed this meant for the risk margin portion as well. I stated that risk margin portion was performed using mid-yr. Is that ok?

S19Q18b

I stated market risk will decrease because there will be less investment risk on Reserves due to decrease on EQ reserves.

S19Q20

I stated

  1. Should collect future/expected RI costs in their analysis.
  2. I stated that since their equity in UPR is positive, there cannot exist any PDR (I also stated that the calc was performed incorrectly)

Comments

  • grahamgraham

    S19Q4d

    • I do not think you would get credit for your answer because it wasn't specific to UBI. The items you listed would be included in any filing. The question wanted you to list the extra items that a UBI filing requires. You may have received 0.25pts out of 0.75pts for your answer.

    S19Q10a

    • In 2012, "social purpose" and "necessary" were accepted as 2 different answers. This is what the source reading states.
    • In 2018, they were not accepted as 2 different answers. (I don't know what changed, but that sometimes happens - accepted answers on previous exams are not accepted on subsequent exams. There's no way to predict that.)
    • I would go by the more recent 2018 examiner's report. In other words, you would get credit for one of them but not the other as the graders considered them to be the same answer.

    S19Q13

    • Are you saying you stated your UPR as of year-end (instead of mid-year) then used t=1,2,3 as your discount periods instead of t=0.5,1.5,2.5? If so, you would probably lose either 0.25 or 0.5 points for that. You should use the standard methodology whenever possible.

    S19Q4d

    S19Q17

    S19Q18b

    • I think they may accept your answer about market risk. They seemed pretty lenient on the grading since they accepted "market risk stable" in sample answer 3. Although I'm a little surprised they accepted it given the person didn't provide any explanation.
    • I think if you said market risk would go down and you provided a plausible explanation, they would give you credit. There are so many moving parts to MCT that it's very difficult to give an definitive answer to a question like this. What they were looking for was an understanding of how the final MCT ratio might be affected by changing some of the inputs.

    S19Q20

    • I'm not sure what you mean by future RI in your first answer. If you mean future "reinsurance", then it's true it wasn't listed as one of the items she collected but further down, it says maintenance expenses and future reinsurance were not discounted as the discounting effect was immaterial. This implies she did include future reinsurance in her analysis. It seems a bit mean because apparently her "list" wasn't complete. There were things she used that were not on her list, but how are you supposed to know that?
    • I think your second answer would receive full credit. (as long as you state the correct formula though since the question also asked for the correction to the error.)
  • stratthixxstratthixx

    This is extremely helpful. I think I know what they're looking for in solutions now.

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