Kyle
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thanks!
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Case 3: oh! so because if we assume the company uses only PAA for all its contracts (no GMM at all), then A*=ARC for PAA only (and A7=0) correct? Case 1: A* = PAA ARC + GMM ARC PAA ARC is part of component A (as in PAA component A=PAA ARC+…
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I guess there are 3 cases here: Case 1: insurer uses both PAA and GMM (wiki example) wiki formula=A=A*+A1+A2+A3+A4+A5+A6-A7 Since using both, why remove the GMM ARC (aka the term -A7)? Case 2: insurer uses only GMM (example above) A=A3+A4+A…