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yup thanks for the catch! @graham
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At a high-level: MCT is basically a capital test to verify if an insurer has sufficient capital to operate on a going concern basis. The FCT is meant to see how an insurer will perform under plausible adverse scenarios.
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Hi, Tbh this is more of a law issue and I wouldn't be able to answer beyond what's in the papers! But I kind of feel settling for 200K when the policy limit of the tortfeasor is 2M would be prejudiced against the insurer. I think the presence of …
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You wouldn't have to calculate a LC adjustment if a contract is < 1 year and not onerous. For threshold 2 and 3, maybe I do not understand your question - But we do need to calculate the GMA approach quantitatively and that will give us an LC or…
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Lowest unit of account just means there is nothing "smaller" than an individual contract i.e. portfolio > groups > contract
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It would be the same as before - Calculate the duration of your LIC and LRC
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Okay let's define LRC as PV future outflow - PV future inflow This is confusing even for myself - But let me try to use an example to clear things up Example: * No discounting * Premiums received at time 0 of 1000 * Losses of 500 paid at …
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If net FCFs are defined as PV future inflow - PV future outflow then yes. For your second point, absolutely. The more correct way is to define it as a negative liability. I just call it an asset for simplicity but it may not be the most correct ter…
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LRC = FCF + CSM = 0 at time 0 It becomes a liability because you have an obligation to provide services to the insured throughout the period. Think of it this way, assume you receive a premium at time 0. At time 0.5, you no longer have any premium…
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The simulation has three main components: * Probable yield * Premiums * Indemnity Volatility in this sense means the difference between different simulations. Since probable yield and premiums are designed to be stable YoY, then most of t…
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Hi, This paper wasn't really important to begin with for past sittings. I think conceptually it would be the same: * Reported Reserve should be given * Claim liabilities = LIC (BEL + RA) where the BEL is just your regular unpaid that you c…
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I wouldn't worry about separating them for the exam -> it will usually be given. I would say investment income attributable to U/W income is simply the return on your invested UW profits
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If you have access to an AA report, there will be a section for margin or deficiency of the unpaid across each AY. Summing that up over all lines of business and AYs, then dividing that by equity will give you this ratio. In terms of the margin/ …
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Hi, Yes, we are working on updating the wiki for changes in the syllabus. We are hoping to get it out pretty soon!
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I think generally you should expect that - For this sitting, the majority of past year questions are no longer relevant with the scale of changes implemented.
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Hi, For your first question: I personally think using total Earned Exposures would make the most sense as Graham alluded to in his explanation. Perhaps using non-ceded EE is a way to ensure everyone cedes the maximum amount possible at all times …
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Hi, You are talking about the changes mentioned in this paper: https://www.casact.org/sites/default/files/2022-05/6C_DutilBulletin_062020.pdf This paper is currently on the syllabus so I would go with you having to know it. In terms of the …
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Hi, If you look at the practice template under for unregistered reinsurance, there is a footnote that explains this.
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Claims and interest rate PFaDs are calculated on net amounts whereas reinsurance PFaDs are calculated on the ceded. I think you are missing a bracket for investment return rate: (0.9781 - 0.9738). The calculations are correct though. That being sa…
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If you got to the learning objectives here: https://www.casact.org/sites/default/files/2021-03/6C_individual_textref.pdf Search for "CIA Discount Rates" and you will be able to find the Excel file
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Yup your interpretation is right
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In this question, they specifically mention that maintenance expenses are a % of GWP. In this case, the CAS were being lenient by accepting 5000 which imo is incorrect. However, in spring 2018, they mentioned it is just a % of premium and didn't pr…
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Your available surplus will decrease as your liabilities will increase (unpaid increases due to no reinsurance) and assets (reinsurance receivables) will decrease. Surplus is part of capital available
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No you wouldn't. It's the exact same thing (algebraically) You can try it out
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Yup that's correct
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This is so strange - Stealth update? The CAS is normally pretty adamant against updating mistakes in their past exams. But anyways as long as you are clear
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yes that's correct. Where as you getting this screenshot from? I am seeing the right numbers on the CAS website
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Unappropriated surplus is surplus that has no designated business use (or not set aside to be reinvested in the company). What that sentence is saying is that when EPR decreases, unappropriated surplus should increase. It's not mentioned explicitly …
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I don't think you will ever be penalized for quoting up-to-date material that is more recent. It would just not make sense