Staff-T1
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Yes, you can estimate payment patterns at a broader level. This is normal practice in reserving. For your second question, timing is usually associated with claims. What you are referring to in the parallelogram method is the earnings pattern
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1) No, time value of money represents discounting of your premiums and losses whereas the interest accretion represents amortization of the CSM. 2) Broadly yes. You would make a provision in your initial discount rate to reflect the expected volati…
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Yes that is right!
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I think the main idea here was to try to bridge a calculation that was mainly done under IFRS4 to IFRS17. However, you are right that RA for financial risk should be implicit in the discount rate and you can definitely make the assumption that RA fo…
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NEP -> Insurance Revenue, while the Net Loss Reserve doesn't really exist anymore but conceptually, it would be LIC - AIC. I do not think there is an equivalent IFRS17 term for GWP and NWP as far as I am aware. The concept of "Net" has really bee…
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To your first question, the answer is yes. For your second question, 59(a) states than an insurer may recognize insurance acquisition cost as expenses when they are incurred. If you expense the costs of acquisition immediately, it goes straight to …
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To qualify here refers to qualifying for the lower capital requirement. If you are a qualifying hedge, then you would calculate your capital required as per 5.3.4.1 and 5.3.4.2. If not, then you would need to add additional capital on top of that. Y…
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thanks! I will make the fix
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1) Okay, I see what you mean. I think this is because the standard lays out that the PAA simplification is specifically only UEP - DAC and not UEP - FAC. As to why this is the case, I have no idea, but conceptually, I view them as the same thing. I …
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For your second query, this is PAA for non-onerous contracts. As I mentioned above, DAC and FAC can be used interchangeably. You would amortize your DAC every period so it would be part of your carrying amount at the start of the reporting period an…
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For non-onerous contracts, the PAA is UEP-DAC. It is not reflecting that the DAC is an inflow. This is a simplification to bypass the GMA approach for calculating LRC When the contract is onerous, what you are actually calculating is the difference…
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What are you referring to when you talk about the base scenario? This is not terminology I am familiar with when it comes to discount rates under IFRS17 in the industry. I've reread the educational notes and I think the confusion here is the vague…
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Deferred and future acquisition costs are mutually exclusive. Future acquisition costs are for policies that have been written or are expected to be written but not yet incepted, while DAC is for policies that have already incepted. I believe this w…
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Well there is salvage and subrogation on the LIC side but for the most part, yes since there would be no premium inflows
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I believe it is on page 20.14
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The filing requirements for each province are in Section V. For example for Ontario it would be on V-26
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Yes premiums receivable are used in the PAA and GMA measurement. Premium received is used in the FCF for the GMA. If your FCF is negative at initial recognition, then a positive CSM is booked. Otherwise you have a loss component instead. Does that m…
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Don't really think it is important tbh. I didn't even know this page existed when I took 6C but anything on the syllabus is fair game, although you can probably ignore the tables in Section V. The most they can ask is probably related to the filing …
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Which page of the P&C annual return are you referring to?
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You would **exclude **the ON CAT fund to determine the participation ratio, Perhaps it could be more clear in the battlecards
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For inflows, the only ones that are coming to me off the top of my head right now are Premiums Receivable as well as expected salvage and subrogation. Conceptually, you can think of LRC as premium liabilities (sorta) which reflects insurance service…
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yeap it will be clear and if it is not then they will probably accept both answers where the candidate either considers it an asset or liability
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Most of the time here refers to the fact that the CAS themselves do not define FCF clearly in their papers, which is why I mention that it is important to understand what FCF is conceptually and not just attempt to memorize the formula. For discoun…
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Subsequent measurement is usually when reserve analysis are done (i.e. every quarter but it could vary from firm to firm). For your second query, that is a good point to note. I think they are referring to grouping onerous contracts together where …
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Tbh I am not sure. We don't do it in the industry and it is not really mentioned much in the text. I would just take it at face value
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Yeah the insurer is still entitled to recover damages through their underinsured driver coverage for whatever amounts in excess of the 200K limit. Good point, I think that should be added into the BC also @graham
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Just to point out here that your MCT needs to be > internal target throughout the projection period and the answer key is incorrect. Yes, the answer key is assuming that these 3 scenarios shown are solvency scenarios. You could also state your a…
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Yes that's right
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Insurance contracts is supposed to provide a broad overview of IFRS17 but just seems like a bunch of Q&A questions dumped together into a large text with not much continuity between them, which is why it feels very disjointed. Personally, I pref…
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For your first question, this is specifically referring to an acquisition of an insurer's liabilities not for day to day operations per say. (I guess you could say acquiring an insurer's liabilities is kind of a derecognition and then recognition ag…