Is it an error? - Unregistered reinsurance deduction calculation

bulubalabulubala
edited September 2022 in OSFI.MCT

As per the calculation, it's basically +D-E, so it is to plus net reinsurance receivable (col 28).

However, as shown in the source text, the formula is to deduct the reinsurance receivable. Tt is not consistent with the calculation above.)
Also, It says item D is for foreign branches only. So if we are calculating MCT ratio but not BAAT ratio, I believe we should exclude item D.

Is it an error or am I misunderstanding anything here?

Comments

  • Staff-T1Staff-T1

    Where are you getting your formula from? From the MCT paper on the CAS website it is as described in the wiki. (A + B + C + D) - (E + F + G + H + I)
    There also isn't the statement about foreign branches in the MCT paper for (D)

  • bulubalabulubala
    edited September 2022

    This is getting weird.
    The one I'm looking at is the OSFI site:
    https://www.osfi-bsif.gc.ca/Eng/fi-if/rg-ro/gdn-ort/gl-ld/Pages/mct23.aspx#Toc-4.2
    And OSFI cite it as "Guideline" while the one cited on the CAS website is called "Draft Guideline". So there exists differences between the OSFI's guideline and CAS's draft guideline.

    Do we need to send an email to the exam committee to ask which one should really be used?
    @Staff-T1

  • grahamgraham

    @bulubala : It looks like OSFI's website and the CAS Exam 6C syllabus do indeed have different versions of the MCT reading. At least the formula for the deduction from capital available is different. However they both have the same date of publication listed at the bottom of every page, June 2021 so I don't know what's going on.

    I can write to the exam committee about this, although they seem to have stopped responding to my queries. In general, I would say to go by the version of the reading from the CAS syllabus and if there is question on this topic on your exam, notify them immediately. I believe they have a facility for submitting comments regarding defective questions.

  • bulubalabulubala

    @graham
    Hi, I just saw the syllabus update that candidates will not be penalized for using the final version of the paper.
    https://www.casact.org/exams-admissions/resources/syllabus-updates

    Thanks,

  • grahamgraham

    Ah, ok. Thx @bulubala. I see the CAS slipped in a change to the syllabus which you wouldn't know about unless you keep checking the syllabus on the CAS website.

    Here is the original syllabus entry for the MCT reading:

    And here is the current entry: (not sure when this change was made)

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