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Hi, Yes to your first point Yes to your second point and also including maintenance fees to avoid commutation Yes to your third point For the fourth point, this is because we may not have much of our own historical data so using reinsurance pr…
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Pitfalls in the context of this battlecard represents what you would need to consider when doing a risk transfer test. It's not saying don't do all these things. Mainly these are what you should consider - And then what you should or should not do w…
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NPV = Net Present Value This is how severity is defined in the source . Appendix A page 1
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Yes to your first point. For your second point, if you have a CSM you will not be able to calculate a LRC PAA. Remember, the PAA simplification is to avoid having to calculate a CSM
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@suomi yes because GMM LRC = LRC(Excluding LC) + LC LRC(excluding LC) = Simplified PAA LRC So LRC = FCF + CSM where the CSM is set such that profit at initial recognition is 0. If you have a CSM, your LRC = 0 since the CSM is set to be zero out…
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I think so ~ Just like an injury from an auto accident I guess
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Okay I see what you mean. If that's the case I would assume that the insolvent insurer has to pay an assessment too which doesn't make sense since I would assume whatever he has left would be in the 50K of recoveries But that's what the source say…
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D includes the paid for the most recent AY while J does not. J specifically mentions it is paid claims for prior years Yes to your second question, well for XS/Deficiency questions we never include the latest AY data
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As Graham mentioned above, this exam question was based on the old DCAT paper and not the latest FCT paper
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As per the text: When a contract is accounted for as reinsurance, all premiums, allowances and expenses under the contract are included in revenues and expenses, and claims recoveries under the contract are estimated in the valuation of insurance…
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When you mean favourable impact, you mean increasing the PV factor by (1+i)^(0.5-1/3)? This is because the average accident date is not the midpoint and is a little closer for premium liabilities compared to unpaid claims. The source shows a proof …
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Let's say we have a policy written from Jan 1 to Dec 31 2021. We also have a reinsurance contract that covers risks on a loss occurring basis every year which we renew on June 30th every year. At January 1 when we calculate our DPAC, we will cede…
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No you don't. It's labelled as outdated because in the latest BCAR you do not test a second catastrophic event
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Very simply - he will get more money if he is injured and that may be kind of intentional from the govt because well he is injured You can call that a tax break
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Cap for non-pecuniary losses in general is 100,000 AB: 5500 cap for minor injuries (2022) It used to be 4000 ON: 3500 cap for minor injuries The AB and ON caps have nothing to do with the cap on non-pecuniary losses. (Different papers)
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Yup I think this is the case @graham
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Oh okay - I wouldn't say they are all promoting settlement without trial. For example, I am not sure how changing the compensation to a gross basis would promote settlement without a trial
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Let's say you make 10K a year and taxes are 20%. Your take home pay is 8K a year. You get injured and now your compensation is 10K a year. Basically you are receiving more than you would have had you not been injured because you are receiving your g…
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No it's just algebra here. The percentages are all multiplied by 50000 so PACICC will always receive 50000 regardless of whether we subtract 100 from the denominator or not. For example, assume that there is only one other company, C that writes 9,…
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Hi, I: This is basically H just one year back. That is why they are telling you to take the second latest diagonals. Just pretend the latest diagonals doesn't exist and do the same thing you would do for H. J: They are asking you for Calendar Ye…
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You'll find it on page 13 of the MFaD reading. It's table 5.3
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Yup that is correct. As for examples, I have no idea - It's not stated in the paper and I have not seen this in work yet
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Yes an employer plan is deemed to be then "first payer" and EI is deemed to be a second "payer" of disability benefits. Any payments received from a short-term disability plan reduces the EI benefit paid for the same week. * written agreement j…
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I think it should be compare and contrast the role of the AA to the BoD/ Audit committee. @graham can you confirm? Yeah that's fine for part (c) <- I mean it's a logical answer
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For your second question it would be explicit in the exam. However, Graham is using ERC as the answer here but I think it should be EQ reserves = (EPR + ERC)*1.25 actually. @graham thoughts?
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I don't think BC auto plan is in the syllabus anymore. @graham can you confirm? It was from an older paper
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Point 1 is not really correct ~ The reinsurer does not return the reinsurance premium. Your second point is correct
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Yup, no onerous contracts for B,C and D
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Ceded = Gross - Net. If your net is really close to your gross amounts, then you could have 0 or close to 0 data for certain periods. This makes it hard to directly estimate the PV of ceded cash flows. You have much more data in each period with gro…
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Yup they are the same