AndrewL
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Takeaway, should we include gross investment income or not?
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Same question!
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Hi @Staff-T1 , I have a few question here: * Why do we use Insurance risk and not capital required sum(IMCO)? The cost of capital method is the compensation to meet target return on capital. I thought we would need IMCO. * I tried this meth…
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Hi @Staff-T1, I am also confused by this. If we have a change in reinsurance program, what method do you recommend and why? Clearly the solution and wiki contradict. I did not fully understand what your answer was above Thanks!
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Thanks @bennybees1 I do not think so though. For example, how would we relate cost of reinsurance to any of the methods mentioned in 2)?
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Hi @bennybees1, I personally would not exclude it. In one of the reading, it says that minimum group is: 1. Group onerous 2. Not likely to become onerous 3. Remaining group
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Thanks @bennybees1 @Staff-T1 Is this what you refer as master formula?
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Can you please indicate where is this master formula? I cannot seem to find it. Thanks
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Hi @Staff-T1, I am slightly confused when to USE: * "AM AA DIE MAD", * The answer saying "Description of work, compliance with AAP, recommendation for further work, relationship with AA" * Answer "Main result, name of peer review, when re…
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Thanks @Staff-T1. I find this a bit confusing for the following reason: * Some past exam question and battleact web question on calculating cap required(earthquake) = 1.25*(EPR+ERC), call this total earthquake reserve. * But earthquake rese…
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Thanks @Staff-T1 * If group 1 is issued 1 January 2023 and Group 2 issued 31 Dec 2023, can they be grouped? * For point 3, I was asking what exactly is the criteria for grouping? Do they need to be issued within 1 year from each other or have …
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Thanks @Staff-T1. Though this would represent NWP not net premium received past 12 months. Do you recommend I follow the same step and call some assumption to be safe?
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Thanks for your response @Staff-T1. If I understand what you are saying here, if we have no cancelation, then the DAC would not be part of the calculation at all (The above two terms cancel each other)? However, Future acquisition cost would stil…
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Thanks for your response @Staff-T1. The link above is actually from a question I asked myself and the reason why I am re-asking it here is that I did not understand. I understand that we had a loss at initial recognition. But could you please exp…
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Hi @bennybees1, From my humble opinion, I believe the text is referring to Reinsurance Held CSM, which can be both positive and negative. So if you have LC on your underlying, you transfer part of it to the reinsurance held through the LRECC. And…
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Hello @Staff-T1 @graham , Is the following correct? * CSM = -LC * If we have CSM, contract has net positive inflow and is an asset. If it has LC, it is a liability. * If we have FCF = -20, CSM =20. What if FCF=20? Would LC = -20? * When w…
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@HateExams99 The keyword here is risk-attaching reinsurance contracts. The underlying are 12 months but the reinsurance contract is 24 months. Hope that helps
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Hello, The footer in the battletable says that the definition of PAS in the report is outdated. It says "An adverse scenario is plausible if it is between 95th-99th percentile of outcomes" How is that different from what the answer should be? …
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I was refering to BattleCard 20. Thank you
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Thank you @Staff-T1 . That was really helpful! Last follow-up question, We initally take a loss. Then when we amortize LC, I agree that net loss should be zero, since we already recognized this loss. But how is it zero? As you said above, we d…
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Hello @Staff-T1 and @graham , Being less than 1% indicates that it is PAA eligible. It does not indicate that there is no need for LC. If I recall properly, LRC under PAA = (LRC excluding LC) + LC * Group C can use PAA and PAA LRC > GM…
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Hello, I just noticed that RoR in this question does not include Other Revenues and Expenses of $1100. Could you please explain why? I thought it was the income from subs. Thanks!
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Hi @Staff-T1 , Thanks for your reply! I understand what you said above, but my problem here is that we say payment pattern is not useful because there is no timing risk. However, as shown in the screenshot above, we need to estimate this. Any tho…
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Hello, @Staff-T1 , Can you please explain why we use max loss =3 milion here?
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If certificate of officer is ALWAYS required (Major filing, simplified, CLEAR simplified), why did the battlequiz specifically mention Major filing?
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* Is 0.60% the ALP or LLP? * Can we use DR=2.45% to discount both asset and liabilities? Thanks
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I agree that Market risk is not relevant and should therefore be removed. So to answer to my own question, if we use bond only, there is no market risk and therefore no adjustment is needed? Is that accurate?
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Thanks @Staff-T1 In summary, * I do not understand how you say we do not cede RA of underlying to reinsurance held. Please see below. @graham Do you have any thoughts please? * You are saying that RA for underlying increases Li…
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Hi @Staff-T1 , What I meant is could you please explain how we treat the LC at each stage? At t=0, t=1 and say at t=2 when everything is paid for example. If we have an initial LC, do we book LC=$100 and also $100 in statement of performance? …
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Hi @Staff-T1, As you said above, the case is about being licensed. Why does the solution refer challenging being incorporated federally? Why challenge the requirement to be incorporated instead of challenging to be federally licensed? Thank…