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Fixed it! Thanks for pointing it out
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Why would the previous ratio calculation not work for this exam? It is realized gain in the current year. ROR stands for return on revenue -> Capital gains are not logically part of revenue. That's my take on it
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FCT is the acronym for Financial Condition Report. The MAE is used for the AA to report to the board of directors on Material adverse events The FCT is used to test if a company can continue operations under solvency and going-concern scenarios (…
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Whoops sorry I missed this - Even with a smoothing mechanism a severe loss will affect the premium but not by too much. Stable doesn't mean your premium will never change regardless of experience, it will but just at a slower rate
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Your XOL reinsurance coverage can begin on January 1 covering contracts with loss occurring in that AY. However, all your underlying contracts that are covered by the reinsurance could have a coverage that begins only on February 1 of that year. In …
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Just to clarify, are you referring to the formula in mini battle quiz 4? You should always use an average when the preceding year is available
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* I'm not a lawyer so it's just my interpretation: The amount should basically be 100K in 1978 dollars - you shouldn't increase the dollar amount in 1978 dollars because inflation has increased. * Plaintiff was offered 100K in 1978 dollars, indexed…
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Yup it would seem acceptable to me
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Yes that is correct as long as the insurer does not select the OCI option
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* The MCT is just a risk based formula to calculate the one-year capital requirement whereas ORSA is more of a long term view on the capital needs of a company to support its business plan. As such, there are more rigorous requirements needed in an …
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Yup that's basically what it means. You could have treaties with multiple reinsurers for example and all of them can default at once if you have a massive earthquake. This is a contagion because you wouldn't normally expect them to all default at on…
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Investment returns varies from company to company but you probably will never get an investment rate lower than the current interest rate which is essentially the risk free rate
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Yup your latter point should be correct. The only difference between PAA and GMA is the existence of a LC/CSM. There would be no CSM/LC for LIC which necessarily means that PAAA = GMA for LIC
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The Earthquake Premium Reserves cannot be greater than the countrywide PML 500. This is stated in the MCT paper but not in the OSFI EQK paper
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Doesn't seem so for the first 3 points. For the 4th point, it is covered here: https://www.casact.org/sites/default/files/2021-03/6C_FSCO_Coverages.pdf
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Thanks for the catch!
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If it is due to a change in facts and circumstances then: * LC would be increased * CSM would be increased
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OCI stands for other comprehensive income. Basically you can choose to disaggregate insurance finance expense and income in OCI or Profit & Loss. This is known as the "OCI option". In really simple terms: The effect of a change in discount rate …
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Whoops this is a typo: It should be cash outflows -> The title is referring to treatment of cash outflows
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Yup it does
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Yup @graham
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You could write a policy for 1000 with premiums payable every quarter. That would mean your written premium : 1000 Every quarter you would have premium received: 250
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Point 1 is more of referring to sliding scale commissions and the like (profit sharing mechanisms) whereas point 3 is the actual losses. Whoops thanks for pointing that out Probably a typo
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Yup thanks for pointing that out
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Hi, It's because normally for direct insurance contracts issued you have an LRC. However, when purchasing reinsurance you have an ARC (Asset for remaining coverage) which is why you swap the signs of the CSM. Does this make sense?
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Yes you are right. MFaDs no longer exist under IFRS17
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There's an error with the formula. We'll get it fixed @graham I think this has to do with the inconsistency that someone asked earlier.
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* You're describing IFRS transition approaches when moving from IFRS 4 to IFRS 17. I had some explanation here : https://www.battleactsmain.ca/vanillaforum/discussion/906/transition-to-ifrs17#latest * I wouldn't bother about VFA. That is more for l…
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I can't actually find that in the source - Mind giving me the page number in the pdf?
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yup @graham