Staff-T1
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Where are you getting your formula from? From the MCT paper on the CAS website it is as described in the wiki. (A + B + C + D) - (E + F + G + H + I) There also isn't the statement about foreign branches in the MCT paper for (D)
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I think it says newly hired so that would mean he has only technically worked for one insurance company
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The issue here is that the papers are written on their own and don't talk to each other, but I do see consistency between the three of them though. IFRS 17 defines financial risk as: "The risk of a possible future change in one or more of a specif…
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No worries I see where you are coming from - I believe it is just referring to the actual place in your MCT report where this is calculated
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Yup I believe they are referring to the same event ~
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I would say the FSCO wording is the correct one. @graham thoughts?
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Think what you're looking for is in the CCIR article
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The paper which states that Canada is the only country in G8 without flood insurance is from 2016 while the battle card which says 1/3 of Canadians have overland flood coverage is from the paper written in 2019. https://battleactsmain.ca/vanillaforu…
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It means that management must guarantee that should a capital injection be needed, it will be available no matter what
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Hi, Yes, for (A) conceptually let's think of it from the reinsurer's point of view. They sell insurance to an insurer and correspondingly have an LRC for unearned coverage and LIC for earned coverage. Now take this LRC and LIC which is a liabilit…
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Just the general concept of social inflation basically which is a general trend that we see in the industry
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The calculation for the capital deduction for unregistered reinsurance is 2 lines down on the same page....
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Thanks! I think this is really neat @graham
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Yeah technically having 0 negative equity means the insurer is insolvent. @graham
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Well not if you voluntarily intend to write EQ insurance It's a trade-off - You're reducing your MCT but you are gaining revenue
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The CSM will not change due to discount rates as it is measured using the locked-in discount rate. In other words, the difference between the PVFCF at locked-in-rate and PVFCF at current discount rates will give you the insurance finance expense. T…
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Maybe we are both confusing each other or I am not understanding you correctly ~ Investment income used in RoR excludes gains as mentioned in page 5 of the MSA report so naturally that would exclude unrealized gains Yes fair value gains are unreali…
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Basically the ruling of this case is that XS insurers need to cover defense costs regardless of whether the claim is within or beneath their lower limit
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I believe you do not need to know about this anymore since it is no longer on the syllabus @graham can you confirm?
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I believe it is mainly used to give flexibility to the insurer - You can choose the option which gives you the highest MCT ratio. No, the MCT refers to the EPR as a financial resource. I think it's because by definition, the ERC is an additional c…
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When doing an ORSA/FCT you need to be absolutely certain that you are able to promptly access capital from your parent company before you are able to use a capital injection as a corrective action. If a capital injection is uncertain, the parent cou…
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Strange - I cannot move it too @graham
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What the exam question is trying to get at is the fact that a stressed score that falls below BCAR guidelines does not necessarily imply that the company is facing an unacceptable amount of risk - Reasons are explained in the solution. Yup lower ra…
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It's probably way more expensive to go the full private route although nothing in the source prohibits it
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It doesn't say in the source so you wouldn't be responsible for it but probably through funding from the annual budget
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It's just the decision of the BC Supreme Court judges to reject absolute liability
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Excess insurers are responsible for indemnity if it breaches their lower limit. However, in this specific scenario since it is below their lower limit, they would not have to cover any indemnity but they are still on the hook for defense costs
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In the MCT you are creating a buffer for the misestimation of LIC by applying a risk factor on your LIC. You don't need capital for your current estimate of the LIC since that is on your balance sheet already. In other words, you have already reserv…
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Yup it is a typo - It is fixed now
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Good question. I believe this is money held in trust by the insurer? It would be a liability if so if the insurer is holding it for someone else. @graham thoughts?