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If you systematically differentiate, but this differentiation is justified by data, then this is fair. You can think of the term "Differentiate" to be related to bias, while the term "justified" is related to fairness
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That's a good point. I may not have phrased my points and sections coherently - Let me think about it and get back to you
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Nope, no major changes
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In the context of the paper -> fair at a very high level means that insureds are not disproportionately affected or harmed by the pricing process. Thus if a model is fair, any differences in rates should not harm the policyholder since those diff…
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Probably not - But I thought that they tied in really well to the paper and had trouble coming up with enough questions from just the first 3 sections. I do think sources of bias is pretty intuitive and has a small chance of coming out in the exam
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Thanks! I have updated the wiki - I think they probably change this every year cause of inflation
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Would what be unbiased?
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Reinsurance held is by definition the ARC, so if you increase it your ARC will increase. The RA for reinsurance held reflects the amount of risk transferred to the reinsurer from the reinsured, so this means that it increases the ARC (Opposite of wh…
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No - Protected ground is the phrase used in the paper and just means it is prohibited
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It's the unearned premium - In this example expired premium refers to earned premium and premium refers to unearned premium
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Not really. Simplified guidelines is a filing with minimal documentation needed as changes are only minor. Expedited approval is more of a process whereby the regulator will quickly approve changes if the insurer meets certain criteria
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My take is that this is fine because you are not surcharging but providing a discount rather
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It is not permitted because you are treating them differently as was mentioned in the answer. You can increase the marketing budget, for example running more ads targeting these group of policyholders, but you're still expected to provide the same s…
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While that paper may no longer be on the syllabus, this is still covered briefly in section 3 of IFRS17- LRC so it's fair game imo
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Because by definition the risk adjustment is only meant to cover non-financial risks. This is covered on page 23 of the RA paper or footnote on page 22.
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Hi, sorry for the delay. Your understanding about the CSM in your first part is correct. The CSM release flows into the Insurance Service Result through the Total Insurance Revenue. CSM release is considered a part of the Total Insurance Reven…
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yup seems fine to me
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I would say the 2023 one makes more sense to me. The old version is still what is listed on the CAS website so I would guess both interpretations will be accepted in the exam (old and new)
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It should be Prem Received + Prem Receivable - Earned Premium. I have made the changes to my above answers to avoid confusion. For some reason I read my initial responses as + Prem Receivable
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* The CAS number (2500) is the GMA estimate - We are not calculating the PAA estimate anywhere here in either the CAS or BA solution. * Generally, not true if your group of contract is onerous. For calculations related to this question, did you che…
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Yes, sample question 28 is a good example of this
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Yes - They are always referred to as unpaid claims. Far as I'm aware they are not called anything else
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You are trying to find the capital that the entity has available. You multiply that to remove the portion of capital that is related to operational and market risk as that is not relevant to the RA
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In Q11 they have stated in the question that they already rebalanced the payment patterns for you that's why you directly apply the payment pattern without any adjustments
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1) It's just because we assume that of the portion of premium that is unearned, some will be cancelled and need to be refunded 2) Conceptually, the FCF is all about at a given snapshot in time, all FUTURE cash flows. This means any claim that has y…
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So LRC is immediately booked as a loss. That means as the policy is earned, we need to eventually unwind the LC that was booked and this is done through an offset to the ISE (It reduces ISE for the period it is being released in). The LIC itself has…
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No it is not. The numbers are in the question which is CI + NII - NI Simplifying this, we get CI - NI = OCI Which simplifies to OCI + NII
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Tbh the only thing that you really need to know is that RAs were once PfADs, and that discounting used to be done with your own return on assets. That's about it. That said, I think knowing the difference between IFRS4 and IFRS17 was probably more i…