Staff-T1
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Also as a note, you would do some sort of weighted average of the three scenarios to determine if there is a risk transfer
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Yeap you are right!
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No you don't have to. I didn't memorise any of them when I took 6C. Focus on really understanding the decision tree and everything will come naturally!
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Hi, * No the true coverage is 2M. In order to reach it, you would have to have 3M worth of losses in the layer 2M XS 1M. Example: 3 losses of 1.5M, payout = 1.5M (losses in the layer) - 1M Agg deductible = 0.5M payout. Example: 3 losses of 3M…
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Whoops I pasted the wrong link: https://www.casact.org/sites/default/files/2021-03/6C_OSFI_Supervisory_Framework.pdf It's on page 16-19
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Hi, I'm not sure I really follow your question, so I apologise if I am a little off the mark. Basically what the examiner's report is trying to say is that you can account for the time value of money either by accumulating interest forwards, or …
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Hi, Yes you are right; it's not very clear. My take on this is that when you invest in bonds, you would need to "roll" upon maturity to a newer bond by taking the proceeds from your matured bond and buying a freshly issued bond. However, if inter…
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I think it's just a difference in verbiage. If you were to provide the aforementioned 3 options in an exam as justification for selecting an MFAD of 2.5% or an MFAD below 2.5%, you would obtain full marks. I wouldn't be too worried about this.
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Yes, the APV is always calculated by the AA
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Hi, You would take the undiscounted liabilities to be commuted multiplied by the remaining % of payments remaining. Ex: 2016: 3M(100%) = 3M <- You still have to pay the full amount 2017: 3M(1 - 20%) = 2.4M <- You already paid 20% in 2016 …
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Hi, If your Max DPAE is > than your initial DPAE then yes you would stick with your initial DPAE. The DPAE that is calculated by actuarial is more of needed as a cap to the DPAE estimated by accounting and is calculated by the AA to ensure tha…
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Hi, That's a great one! Thanks for sharing with everyone Definitely think coming up with your own mnemonics are a great way to study the material!
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Hi, I think what they mean is if you are dealing with an unregistered reinsurer and your EQ reserves decrease, then your credit risk from that unregistered reinsurer would be lower because you have less to potentially recover from them. That's my…
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Hi, I think the key part of this formula is the mention of APV. PfADs and Discounting are always done on ultimate losses.
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Hi, in the UCLR section of the AAR, loss ratio always means ultimate loss ratio
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Couple of things here: * L in your definition is the gross unpaid discounted @ 3% * To get your quota share percentage you should always multiply by 0.7 rather than divide by 1.3 * Your first term, 0.9781(L/1.3) -> You are trying to get th…
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Hi, Other Comprehensive income is mainly used to adjust to fair market value certain assets (stocks for example). You wouldn't subtract dividends because dividends have no impact on other comprehensive income. How I think of it (And this might be…
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Hi, I wasn't in the original discussion but here's my 2 cents on this. There is an error in the question according to the Examiner's report -> so for this specific question, assuming either is fine. Generally for commutation, assets (cash …
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Hi, After reading the text I have arrived at the same conclusion as you They're interchangeable
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A peer reviewer assesses whether the methods use to obtain the ultimate loss are reasonable - For example, the ELR used in the BF, Berquist Sherman techniques applied, selection of final LDFs etc. An auditor will check the actual calculations - For…
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I would consider it as a subsequent event as you mentioned. According to the examiner's report, both answers are accepted
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Hi, In the second bullet point it is stated: The treaty pays for losses from a single event in excess of 20% up to a maximum of 100% of Gross Earned premium. Net Losses = 525,000(Gross Incurred Losses with Catastrophes) - min[450,000 (Minimum …
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Hi, My understanding of this is that a decrease in liabilities considered here would be temporary -> Naturally, we expect the agriculture industry to continue expanding long term. And if this happens after an important catastrophe where surplus …
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Hi, Emerging experience in the context of this paper refers to the actual loss experience that starts to come in as an accident year develops. For example: Accident year @ 12 months: Incurred = 2000, IBNR = 8000 Accident year @ 24 months: Inc…
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Hi, The solution in the Examiner's report uses the old method of calculating duration for Premium Liabilities. You can find the new method here: https://battleactsmain.ca/wiki6c/CIA.PrLiabs#2016.Fall_.2315_Redone
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Hi, Graham edited the wiki and gave you a shout-out here: https://battleactsmain.ca/wiki6c/AB.TNC#Brainstorming Good catch
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Hi, If you are in Auto pricing but not for the Alberta region, it's not really surprising that you haven't seen it before in work. Basically, it serves as a cap on your mandatory premium coverage (Accident Benefits, Third Party Liability). For ex…
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Hi, Thanks for pointing that out! Graham already made some changes in the wiki and gave you a shoutout
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Hi again, I've thought about this further and I think being more specific with regards to the battlecard -> The FA seeks to minimize its own market share. Why? This is because the private market offers better service and has an incentive to in…
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Hi, Let's generalize this statement a little -> Why is it good to minimize any firm's market share in general? Imagine if Tesla was the only firm in the world to sells cars (100% automobile market share) What's to stop them from raising prices…