Staff-T1
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Its in the study kit from the CAS
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It is part of LRC but will be trivial for any insurer to obtain for BCAR purposes
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It's the same thing. Assumed written premium are the premiums from written reinsurance that we assume from the primary insurer
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You should be downloading a v9 version when you click the link. Maybe try to clear your cookies and redownload
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A* in the example contains both the PAA and GMM ARC which means you need to remove the GMM ARC (A7) as that is not required to calculate the capital required. If the insurer only uses the GMM, just use A3 + A4 + A5 + A6
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It is the same formula. This is PAA LRC at time 0 where UEP = Premiums received since no premium has been earned yet and premiums receivable = 0.
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It doesn't specify whether it is reinsurance receivable for foreign branches. It would be reinsurance receivables in general. There are companies with no foreign branches
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No problem, the RA in general is meant to pad for uncertainty in any aspect, not just specifically for claims development
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Your former point is correct. Where are you seeing the latter? On "App C Sch 2 - LRC non onerous", Premium received - earned insurance revenue = Unearned premium (PAA estimate since DAC is 0)
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There is uncertainty related to the development of claims -> For example, IBNR and ultimate loss ratio changes at every valuation period. If we knew for sure that ultimate claims would be 1000, then we wouldn't need any Risk adjustment because th…
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Okay it should be the latest updated version now. @graham do you have a timeline for the second question?
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insurance revenue = earned premium. It is the same thing
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The answer you have provided is the most correct answer, but you would probably get marks for the former also. The idea here is that insurers would like to use PAA as much as possible. To use PAA for contracts with term > 1 year, you would always…
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* Not sure what you mean. There are 9 appendices in the Excel and the source talks about 9 appendices * Change in financial risk is reflected in column (23) of appendix 6 under change in discounting assumptions. In page 28 of the source it talks …
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Liquidity means the ability to exit a position quickly and at fair market value. A surrender penalty makes it more difficult for one party (policyholder) to exit. Being in a position to benefit favourably from a feature does not increase or decrease…
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Yes, LRC is 0 but only at initial recognition. Conceptually, the CSM represents unearned profit and will be amortized at a fix rate, provided assumptions do not change. Thus, at subsequent measurement the CSM will no longer be equal to FCF at any ti…
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Err yeah I think you should come back to this in 1 - 2 days. I have redid the examples. Also, yes to your second question, but LOC limit should have been checked in the preceding step.
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Dang thought I caught them all. You should always use formula 1. Previously, we had LRC = UEP - Prems Receivable - DAC in the wiki which was not correct and I have been going around replacing them, but looks like one fell through the cracks. It shou…
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Uhhh yeah V - 0.1% means V0 - 0.1%. Im just trying to make it look less ugly with fewer characters - If you go to the 6C syllabus and scroll to the link for the duration paper, you will find that it is right underneath
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1) No, the risk adjustment is calculated similarly for reinsurance and insurance contracts held. Non-performance risk is not part of the Risk Adjustment. Risk adjustment here refers to the risk adjustment for non-financial risk. It is only the non-p…
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Oops yeah thanks for pointing it out
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Cash flows that vary with the underlying item would be profit sharing provisions like contingent profit commissions where the underlying item would be the insurance contract itself. Cash flows that do not vary with the underlying are mostly stuff li…
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The correct formulas: Margin for unregistered reinsurance = (A + B + C - D) * 0.2 The correct formula to check to further reduce capital required should be ( E + F + G + H ) - (A + B + C - D). There is no longer an item for 'I' anymore. The s…
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Hi, yes the correct formula is (A + B + C) - (D + E + F + G + H) or the first instance. This was a change made in 2024. We are still working on updating the attached screenshots. For your second question, you are also right and it should be the 'ex…
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It's usually an assumption which should be stated. When we talk about premiums in the context of the FCF, it always refers to premiums received/ receivable and not earned premium. Usually they are paid over the quarter, but in this example it is all…
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Premiums are paid quarterly when the policy is active. After that, only losses are remaining which are assumed to be paid once a year
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Oh yes you are right -> It should be coverage units in the beginning of the period @graham
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I think that's an interesting observation. I'm not an accountant and have never filled up these sections of the P&C annual return, but I think it does seem like the amounts in page 40.72 would be on line 240 of page 40.74. I doubt that there wou…
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Yes, if the policy term is less than one year sure you can use the PAA
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It says CU in the reporting period in column (1) though - This seems right to me