Staff-T1
About
- Username
- Staff-T1
- Joined
- Visits
- 2,786
- Last Active
- Roles
- Administrator
Comments
-
I'm not sure about "business-based assumption" but yes generally it is fair to assume uniform payment within a year, which is why you discount at the midpoint for the LRC. Yes for the LRC. Also the latest derivation for the AAD is found in the…
-
LRC excl LC is a PAA concept exclusively and is always UEP - DAC. There's no such thing as a LRC excl LC under the GMA
-
You only do the adjustment for the LRC. Q25 is calculating the LIC
-
No it is not a mistake because they said this relates to page 20.14 which means the financials exclusively correspond to insurance contracts only
-
The logic I was going for was that you are supposed to strip out everything that is not relevant to insurance contracts from the average yield. * Step 1: Add back the investment expenses to get the gross yield * Step 2: Remove everything that is…
-
Yup
-
That's what the paper says so I suppose so. I can't give you any anecdotal evidence unfortunately as I have not personally seen it done as the paper describes at work
-
Because a corporate bond yield is not risk free while a govt bond is. You need your discount rate to be the sum of the risk free rate and illiquidity premium. Spread over government bonds is financial jargon for the difference between the yield…
-
Yeah you are right here it should be (net cost) or benefit. This is because the allocation of reinsurance premiums are a negative amount (usually the net cost of reinsurance should be negative and reduces your ISR) @CanAct06 's understanding of h…
-
It's never included for the LIC as it is just a LRC adjustment Most of the questions are discounting for the LIC which is why they don't apply the adjustment. You only need to do it for the LRC
-
No, I think you are right and I agree with you. It should be 10.2 rather than 10.2/18. I'll need to get that edited
-
No, AOCI (x) = AOCI(x -1) + OCI(x). CI is NI + OCI
-
You should memorize this formula for the EQ reserves (including the 1.25 adjustment) Risk factors that you don't need to memorize are the LIC and unexpired coverage factors for each LoB and all the risk factors for operational risk. You would ne…
-
For Q17, they're calculating it as a % of your premium which are received at time 0 hence no discounting needed
-
Your LIC always starts at the end of the first year for your latest AY. It cannot start at the beginning of the year as you can't have claims for an AY before the year has passed. Also, it states at the top of the table that we are looking at paymen…
-
I don't know what is actually on the exam since I don't write the questions, but yes it's fair game as it is on the syllabus in the RA paper
-
Acquisition expenses are usually amortized throughout the term of the policy, that means they are incurred as the premium is earned. This is common accounting practice to prevent there being an upfront hit to your financials because of acquisition c…
-
Sliding scale commissions automatically adjust the ceding commission rate based on the loss ratio. As your losses decrease, commission rates increase with the caveat that there is a maximum and minimum commission. Profit sharing pays the cedant p…
-
I meant that they are considered in the ISE but are not part of the GMA calculation
-
The simulation is mainly to determine the RA%. The actual FCF is probably selected using traditional methods like the CL, BF, etc. This is how it is commonly done in practice
-
All reinsurance receivables need to be paid directly to the cedant rather than through a third party for example
-
I have directly provided the net unexpired coverage, bypassing the need to calculate it with the formula above
-
No don't bother. The only return you need to know is ROE
-
1) You can't group contracts more than 12 months apart 2) Cannot group onerous and non-onerous together 3) Cannot group contracts that are using different measurement methods 4) Should not group contracts with substantially different coverage per…
-
Definitely not! This is not a prelim exam - distributions and their moments should be provided
-
* Nah just ignore it. It slipped my mind that 2.1.2 and 2.1.3 is excluded. * The Earthquake reserve in category A is not just the EPR but rather the whole EQ reserve = 1.25*(EPR + ERC). The deduction to capital available is only the EPR
-
Yup so your LRC is 440. Then your final amortization of DAC and ins revenue gets you to 0
-
Only MSA.Legend is valid for the exam. I have removed the MSA.ratios Excel practice problems in that page. You don't have to know it for this sitting
-
In step 1, the table starts at 2024. This means we are evaluating the LIC at Jan 1 2024. For AY 2023, this then means that 35% of the ultimate has already been paid.
-
The bullet points are correct. They're taken straight from page 36 of the paper. Bullet point 2 refers to both RSP and the FARM. The FARM policies are on the books of participating insurers