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I think so too @graham
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yeah it should be 'and' @graham
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I don't think it implies that at all. It just means your participation is determined by your business transferred to the pool which is true. The more business you transfer, the smaller your non-ceded EE and the less your participation
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yup @graham
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Yup I would think so. There's a long discussion about realized gains and investment income here: https://www.battleactsmain.ca/vanillaforum/discussion/44/fall-2017-25-ror#latest
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Yeap they are. If you have more receivables than payables, that means the reinsurer owes you more than what you owe them. This is riskier and you are penalized for it through a deduction to capital available
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In question 6.32, should there be a Loss Recovery Component, I believe the CSM is adjusted to take this into account and prevent double counting for GMM. For the PAA approach you would directly adjust the ARC
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You are confusing the 2 concepts. The former is to calculate deduction to capital available The latter is to calculate the margin for unregistered reinsurance
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Yeah CSM is always positive and can only be negative for reinsurance. The problem is here that you have flipped the signs of your FCF which is why I said I don't like this definition of LRC
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Tbh maybe I am not seeing it but the wiki seems fine to me in terms of how I would translate it into the actual PAA formula. I believe it should be plus "the derecognition of assets for acquisition cash flow". -> Refers to the third bullet …
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1) Could also apply to the asset for incurred coverage 2) It is applied to the asset itself
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The formula for the PAA is UEP-DAC. At time 0, your expected premium = UEP since all your premiums are unearned. The Initial recognition calculation in (a) is the opening balance of the LRC. Uhhh no you got your 800 in the exact same way as the for…
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I prefer to define FCF = outflow - inflow which is the more correct definition. If you define it as FCF = inflow - outflow, then CSM at initial recognition = -20. LRC = 20 + (-20) = 0. Smaller (more negative LRC) means a higher liability here. It…
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CSM is added in both cases. CSM is a negative amount in case 1 but a positive amount in case 2. And yes your initial conclusion is right - I normally just remember the second formula -> if you understand the concept it will come naturally
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Adipelino is right. The CAS have been inconsistent in how they define the LRC in different papers.
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1) No, reported reserve can be higher than the AA's estimate. It cannot be lower though. 2) Claim liability will be the LIC
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You can't do it in this way - This is information specifically for PAA
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The forecast period is 3 years. It passes within the forecast period so it is fine
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1) Whether I am paying the premiums quarterly or annually, I am still receiving the full coverage 2) You shouldn't include reinsurer expenses in calculating a risk transfer because only CFs between cedant and reinsurer are taken into account
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Yes I would say so @graham what do you think?
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As I mentioned, it is a negative liability because it essentially functions as an asset -> If you have a profit at day 1 that you can't recognise immediately, then that essentially is an asset for you since it is money that you will eventually ge…
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I think the second point seems correct to me. Prior approval is what we have in ON Auto. FSRA needs to approve it first before rates can be implemented.
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You would do the PV outflow - PV inflow
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I don't think anyone but the exam committee can give you an answer for that. Everything else will be a guess
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It is referring to the certificate for agricultural insurance rates in the Chevalier paper. FCT and AA reports also require certification from an actuary
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The regulator has 30-90 days to approve under the file and use. Your answer is fine. I think the first point is incorrect, that seems to be Use and File
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I guess this is more of referring to whether the program is offered by the government of the private sector. The UK is done through the private sector
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I don't think so because you are directly calculating the PV using first principles. @graham thoughts?
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I think there was a big post on the forum about this question https://www.battleactsmain.ca/vanillaforum/discussion/44/fall-2017-25-ror#latest
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I think it would be. Not sure if the pages are still the same though @graham