Staff-T1
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I think your explanation makes sense to me. @graham maybe we can tweak the wording here a little?
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Think it would be your former point
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* For your first question, the unpaid is 0.25/(1-0.25) at each interval since we are at time 12 months now, not at time 0. * LIC would just be your unpaid claims while AIC is technically the ceded claims to reinsurance
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Pfad and Mfad are no longer in the syllabus. These are IFRS4 concepts while the equivalent IFRS17 concept would be the Risk Adjustment
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Not quite. It really depends on the context. Fulfilment cash flows = PV (Future Cash Flows)
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With regards to this formula, the first thing that we should note in layman's terms is that there is a deduction to capital available when the total amount owing from the reinsurer is greater than the amount payable to said reinsurer. Funds withhe…
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Premiums received are the direct written nuclear premium (i.e. premium received from policyholders for nuclear coverage. Premiums paid are the ceded nuclear policy premiums that are paid to reinsurers.
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You will only be graded for the first 2
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This is more terminology here as deficiency is usually a negative number and redundancy is a positive number in AA reports. That number there has nothing to do with absolute development but rather the actual vs expected development.
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I would ignore the QC questions but ON still seems relevant imo
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why do you think that is positive? Your reserves decreasing less than expected is bad for a company as that means that they misestimated their liability and have actually a larger amount of liabilities than expected
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No, it just means that the actual development is worse than expected. Example: Beginning Unpaid: 50000 Expected Ending Unpaid: 45000 Actual Ending Unpaid: 48000 In this case your Deficiency is 3000. You Expected to decrease your reserves by 50…
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I've talked to Graham and there are some changes that needs to be done for this question. Also, it is not possible to separate out the RA for financial risk. It is not explicitly included in the discount rate like current interest rate mfads
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what it means when it is negative here is not that the reserves decreased by 3000, just that the reserves were 3000 less than what it should have been
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I do my FCTs once a year. This is how often it is done in the industry. Okay so OSFI is the regulator. They will direct insurers to do certain things to meet compliance (FCT, AAR). CIA is an educational board/ regulatory body for actuaries. In other…
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Not sure I follow - What specifically is wrong with the Battle Card?
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cost of capital is usually stated on an after-tax basis while Risk adjustment is a pre-tax figure. This is why you would need to make the adjustment
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It should be provincial. For example in Ontario FSRA regulates the rates and is a provincial body.
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Yes I believe so. Although it is strange that they specifically want to remove capital under category C first. Do you know why this is the case @graham ? I guess if you remove capital under category B first you could still fail the second condition …
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You would only amortize DAC (for example commissions) for measuring your insurance service result. Non directly attributable acquisition expenses are stuff like salaries and office supplies which you can't amortize and is included outside the ISR as…
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@adipelino is right The concept is similar to calculating the value of a commutation of a reinsurance agreement whereby we need to calculate the PV of the cost of capital
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Well if you have the difference between PAA and GMA LRC then that means you have also already checked for significant variability in FCF
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It is always outflow - inflow most of the time
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I think so @graham
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Oh I see what you guys mean. I don't think it is required to do an allocation to issue year unless explicitly stated and there are different assumptions by IY. If you look at the sample Excel, the final discounted amount is the same regardless of wh…
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@adipelino has the same idea as me. It shouldn't be too difficult
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No you would discount it using your IFRS17 discount rate. So three things here: * The illiquidity premium is not the same as the interest rate MfAD under IFRS4 * It is not possible to separate out the risk adjustment for financial risk from th…
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yup you do need to make credit and market risk adjustments
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When you mean issue year do you mean accident year? If so then the Excel is doing the allocation correctly. However, if you mean policy year we don't ever do that for reserving
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Yup thanks @adipelino for answering this!