Staff-T1
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For point 1, yes. However, your total liability under GMM will be less than your PAA LRC so in that sense it is fine as you are overstating rather than understating your liability. I prefer the former for point 2
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4165 is the pure 'profit' of the contract as a whole when measured using GMM. However, given that you are booking a liability under PAA, your total profit would be the difference in your current liability (580) and your FCF (-4165). Simply written…
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Interesting - I do not think they actually showed how to calculate effective duration in any of the papers if I recall
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Yes, LRC is 0 at initial recognition. I disagree that it doesn't make sense. At initial recognition, if a contract is non-onerous and no service has been provided, why should there be a liability on the balance sheet? The insurer hasn't even started…
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FCF here stands for future cash flow not fulfillment cash flow
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No, this answer will not be acceptable The purpose of the report was to report as the entity was at the calculation date. Given that the case increase happened in November 20 during the reporting period, then it should be reflected in the AAR. In ex…
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I think you'd just implicitly assume that because there would be no way to get the net liability otherwise
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Well you can see in the financial statement that LIC(past service) and LRC (current service) are broken out and not combined
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I explained it above in my answer on April 24
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Yes, 4165 is the profit, but it wouldn't be the LRC. You book the LRC on your FS not the profits. The whole purpose of IFRS17 is to prevent the pre-recognition of profit before it is fully earned
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oh yeah I have heard about DALLE - Pretty neat
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That's a neat memory trick! Where did you get the picture from though?
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OSFI corporate governance I think
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I believe terrorism is no longer on the syllabus
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ARC = outflow - inflow, outflow = 100, inflow = 60, RA = -12, CSM = 28. As I mentioned above RA is negative for reinsurance held. If the sign is not the same, then you have 100-(-12) which is not correct
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I explained it above re low ELR
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Capital available uses the earthquake reserves (what is being calculated in the question) and not the earthquake premium reserve. There's a difference between those two
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For your example, LRC should have a positive outflow amount, negative inflow amount and a positive RA For your ARC, this number doesn't make sense. You are saying this is a net loss reinsurance contract, but you have a negative CSM which implies a…
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I think you need to be more specific here. Is this ARC or LRC?
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Adjustment for reinsurance non-performance risk, or credit risk on the reinsurer is done directly on the future cash flows by adjusting the probability estimates of future inflows. This is made clear in section 3.2.1 of the reinsurance paper
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Q1. Paragraph 59(a) allows you to expense all acquisition cash flows immediately, provided that your coverage period is less than a year. If this doesn't apply, you would amortize the cost of those acquisition costs across the life of the contract. …
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20.12 is the LRC for GMM contracts. 20.14 is the LRC for all contracts. 20.22 is the consolidated statement. The ISR means the same thing for each page. It is just a different breakdown
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Credit risk falls under investment risk, so yes
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Commercial liability vs personal property - I think this is common knowledge the payout for liab is much longer than for property with a lower freq and higher severity. Proportional scaling here just means converting a dollar amount of RA to a % …
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Obtain a federal license. When reviewing past years, you need to read the whole answer key to spring 2018 b), not just the first sentence. It specifically says the AG of Alberta challenged the requirement to be incorporated federally to operate in a…
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No, the solution provided is incorrect. You cannot have contracts issued more than one year apart in a group. You are right. For your second point, no this is not necessarily true. You can combine a group of contract that is PAA eligible and one …
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You can just pretend that RA replaces PfAD
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This is well explained in section 4.6 of the discounting paper. In short, no as liquidity should be viewed based on the contract features. Remember the option to cancel or prematurely exit a contract lies only with the policyholder, not the insurer.…
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Sure @graham - The whole confusion is that the CIA papers are not consistent with defining the FCF. There's a long thread on this somewhere
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It's one and the same