Staff-T1
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1) Correct, and therefore it cannot exceed the underlying LC. 2) No, the LC is not part of the ARC; which is why you need the LRECC to adjust the CSM of reinsurance contracts held
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I don't think this would be solely due to the deductible as each of the other programs also have a deductible. I think it could be because the participation rate assumption under the public insurer option is higher than the others which leads to mor…
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The wiki is basically a restatement of the above, point 1 is seasonality, point 2 is the reinstatement premium and point 3 is the ceding commission
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* No, that is incorrect. LIC and LRC would not decrease as those are measured gross of reinsurance. ARC/AIC net of the risk adjustment will be 250, that is correct. The risk adjustment would be based on the risk appetite of the firm and would increa…
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I am not sure what you are trying to ask me here
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* No, this is not true. Reinsurance has a net cost 99% of the time, otherwise the reinsurer would never write the contract. There are here to make money too. We don't consider a reinsurance contract hled as onerous because reinsurance is meant for r…
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I think this is (probably) referring to ceding commisions - The reinsurer reimburses the primary insurer for some of their expenses, since the reinsurer themselves do not need to incur bespoke expenses
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It just says you are able to project cash flows at a lower level than the group of contracts level, but then when it comes to reporting purposes, you still have to then re-aggregate up so that everything is still in the same group
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Yes that is correct
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There would be lapse and expense risk for both. Why do you think there wouldn't be for insurance contracts issued?
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Yeah I think so
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Yeah that sounds right to me
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Correct
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When the reinsurer is able to claw back prior year losses, then there is less "protection" for the insurer. The whole point of reinsurance is to protect against tail losses - If the reinsurer is able to recover a portion of prior year losses incurre…
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1) I think this is in reference to possible overcontribution of premium to the RSP, or midterm cancellations/ addition of endorsements. 2) Well, the transferred premiums are excluded and members therefore received an allowance. Seems logical to me
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It's usually calculated as Expected Profit/ Allocated Capital to the LoB
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That's what sample answer 4 says
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For RoR, you are basically looking for the pure investment return, excluding capital gains. You are provided with NII, which includes capital gains. So you're simply removing it.
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1) I believe this is cause there is now a large pool of low-risk individuals that are mandated to purchase insurance. Many small flood losses which wouldn't have been covered under the other options would now have to be covered 2) Home insurance is…
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I believe the UAF only operates in the Atlantic provinces
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I am not sure I understand what your questions is here - what exactly are you comparing on 60.25? I only see "Effect of changes in non-performance risk of reinsurers"
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1) Yes that is my understanding 2) I think it would also include the cost of mitigation by the homeowner to flood proof their home, in addition to self-insurance costs
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* 20.12 is for the LRC as there is no CSM for the LIC. 20.14 has got entries for both LIC and LRC * 20.14 has information for both LIC and LRC * Both GMM and PAA I think The headers in each of the pages should provide you the definition you ne…
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It is one of the papers in the study kit
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Nope, BC has open competition for the optional coverages (Everything except BI and AB) while QC has use and file for physical damage coverages and also government mandated coverage for AB
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The former refers to diversification that you would obtain from writing different types of insurance (For example, property, auto, commercial, etc) while the latter refers to the diversification between insurance, market, credit and operational risk
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Bound means when an agreement is entered into. For example, you would usually agree to bind new business 1-2 months before coverage actually begins
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Yes, that is my interpretation too
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Yeah that's pretty much what you get if you expand the formula
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It's at least the 90th percentile while a solvency scenario is at least a 95th percentile, which implies a going-concern scenario would be the 90th-95th percentile. In practice, 90th percentile is usually used as the going-concern scenario