Staff-T1
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LC is recognized in P&L immediately, but a negative liability is also recognized similar to the CSM on the balance sheet. This is amortized similar to the CSM as a reversal of losses. The total sum of the P&L entries related to the LC will b…
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It basically means that while the federal government has the power to regulate commerce, it doesn't imply they have the right to regulate insurance in a province.
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Seasonality is more prominent for reinsurance contracts so this was why it appeared in the reinsurance section. However, if there is significant seasonality in a direct insurance contract then you would not earn revenue based on the passage of time …
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There's lapse risk and expense risk too off the top of my head
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Yes both can have contracts issued more than one year apart. The difference is in the second and third bullet points under FV. If within a year, an entity is able to divide the groups they MUST do so under the modified retrospective approach whereas…
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There is no difference between LIC and LRC under GMA
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Yup you are right @graham
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Could you elaborate more on where you are seeing this statement so I can find it in the wiki?
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I think acquisition CFs are normally incurred when a policy is sold and not at initial recognition
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* Say you are writing Auto insurance in AB. Bodily injury coverage may be onerous but Accident Benefits coverage is profitable. Both are mandatory coverages so you have to offer BI. Or the company sees that an onerous group has a positive customer l…
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I've explained it maybe at a higher level here: https://www.battleactsmain.ca/vanillaforum/discussion/905/transition-to-ifrs17#latest For full retro approach, you have to do everything as if IFRS 17 was always in effect. This means identifying gr…
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Full retrospective approach must be used unless it is not practical to do so. If not practical to do so, then use modified retrospective approach. If supportable information is not available for modified retrospective approach then entity can use th…
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Yeah you are right. @graham thoughts?
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Yes it is
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The source doesn't really talk about whether a country is opt-in or opt out. If you are optional, you can be either an opt-in or opt-out optional. As Graham alluded to above, an opt-out option would naturally have higher take-up rates
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Okay I see it - I think for the first point it is pretty self-explanatory due to payment plans and the fact that premiums are not all paid at once. The second point is referring to the modelling of a risk transfer. What it is saying is that any los…
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I think it would just be row 199 of Page 60.45 which is column (40) as you mentioned.
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* This is because any changes related to discounting assumptions will flow directly towards the insurance finance income/expense. You will see this in the IFRS17 discounting paper. Changes in FCF that affects future coverage and also the CSM would b…
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Which section of the wiki are you referring to?
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Hi, * Yes this is correct. * From my understanding, you would claim from your own AB coverage as well as the TPL coverage from the underinsured driver. SEF44 is then tops up whatever is left on the claim
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They are related - I wouldn't say it is a subset. They both apply the principal of calculating your capital required. Maybe this is too much of an oversimplification but FCT is kind of like doing the MCT under adverse scenarios
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Undiscounted unpaid would be exactly the same under IFRS17. APV would be equal to your LIC. For an example, maybe Graham and I will try to come up with something for the Practice Exams
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DAC stands for Deferred Acquisition Costs - Basically the portion of expenses incurred as premium is written but expensed as premium is earned. Whoops yeah I wanted to say something then realised it was not correct. Yeah you are right on your last…
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Hi, * Release of CSM and RA into profit For your first point that would be correct. For the second point, I interpret that as more of the amortization of the DAC * Release of LC into expenses I would think so * Balance sheet , 20.1…
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No, it is possible to have a negative LRC. CSM is only calculated at initial recognition unless facts and circumstances have changed significantly. Here's an example: * Coverage period of one year * Claims of 500 paid at the middle of the yea…
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Yup you are right @graham
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Hi, I'd say expenses associated with starting a contract
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No, Graham is right. In the actual exam (a) and (b) would be acceptable answers. Although with option (b) I would say subsidies are provided by allowing insurers to pass on additional risk from high-risk policies to the pool
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In a way I think (b) is correct too but perhaps (a) is a better description of the high-risk pool. Premiums are capped because the insurer can cede away poor risks to the high risk pool
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* In the context of IFRS17 cash outflows refer to things that you pay (i.e. claims, expenses, etc.) So for this, an example for the first point would be using market data (ex. industry experience) to estimate your losses and expenses. For the second…