calculating PFAD for 2019Fall15
When calculating the PFAD components, should I calculate them on a net basis or gross basis?
Using 2019 Fall 15 as an example, are my calculations correct?
PFAD - investment return rate
(0.9781-0.9738 x 111578 x 0.7
PFAD - claims development
0.9738 x 111578 x 0.7 x 0.1
PFAD - reinsurance recovery
0.9738 x 111578 x 0.3 x 0.01
Comments
Claims and interest rate PFaDs are calculated on net amounts whereas reinsurance PFaDs are calculated on the ceded.
I think you are missing a bracket for investment return rate: (0.9781 - 0.9738).
The calculations are correct though. That being said MFaDs are no longer applicable in Canada starting from next year and are no longer on the syllabus. MFaDs are now replaced by the Risk Adjustment under IFRS17 and are calculated differently