Reasons of selecting MfAD (Clms) = 2.5% or lower

wilsonchan18wilsonchan18
in CIA.MfAD

Hi,

From CIA CSOP Quiz, I saw there can be below 3 reasons that having the MfAD below 2.5%:
1. Commuted to Reinsurer, being in Runoff
2. LOB with pre-set payment
3. Stop Loss Coverage with SL Limit reserved

Yet, from the MfAD quiz, I saw below (reasons of selecting the lowest of 2.5%) that is kind of conflict to the above:
1. Commuted to Reinsurer, being in Runoff
2. LOB with pre-set payment

Can you please confirm?

Thanks and Warm Regards,
Wilson

Comments

  • Staff-T1Staff-T1

    I think it's just a difference in verbiage. If you were to provide the aforementioned 3 options in an exam as justification for selecting an MFAD of 2.5% or an MFAD below 2.5%, you would obtain full marks. I wouldn't be too worried about this.

  • wilsonchan18wilsonchan18

    ok, thanks then :smile:

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