Staff-T1
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Yes formulas within the cell count, you don't have to write them out using words
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Losses/ EP is a retrospective view of losses, but if you want a prospective view of a cohort of business that has not been fully earned then you need to use ELR*UEP. What do you mean by why Direct Unearned Premium?
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1) Working layer is a reinsurance term to identify the layers of reinsurance that are most likely to be pierced by claims. It's called a working layer because it gets worked the most, i.e. there is a large frequency of claims in the later. We usuall…
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I don't correct the CAS solution directly as this could cause a lot of confusion (I like to keep the CAS answers clean as they are) and just provide commentary down below. I find this makes it easier also for me to port comments over when the CAS up…
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No for direct insurance you do not consider it if it's not onerous as the policy has not incepted, but you would consider it on the reinsurance side as expected recoveries
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So generally for questions like this you can use the formula from either paper. Usually, the formula required from one of the papers will be unusable as certain data would be missing. But in general if there is sufficient data such that multiple dif…
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There COULD be a significant financing component for both your scenarios. But it would need to be tested. If the premiums are received and service is provided within one year then there is no financing component period
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That's the definition of a hybrid approach. You calculate the reference portfolio liquidity premium once and then add it to the risk free rate on roll-forwards. For part C, you are making adjustments to market and credit risk to make them compati…
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Yes
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The RA is also discounted, so you'd need to unwind that. And no, no one says LIC & RA. By definition the LIC includes RA so unwinding the discount on the LIC would include unwinding the discount on the RA also. For Q13 specifically, they probabl…
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For PAA specifically, there is no ambiguity around the signs. It's always UEP - DAC so there wouldn't be confusion there. And being negative does not necessarily mean profitable specifically for the PAA
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The date provided is at Dec 31 2023 and there are 100% of claim payments remaining which means the policy has not started providing coverage yet
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If you are referring specifically to using MCT risk factors directly, then the diversification credit between lines of business and also between LRC and LIC is already implicitly accounted for. But if you are provided it explicitly, then yes subtrac…
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It's just a coincidence here. I wouldn't look too much into it
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That's correct
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It's stated in the question that the company starts writing in 2023. You are then provided information on Dec 31 2023 so it's pretty obvious one year has passed
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I don't know anything about life insurance so I can't speak on that. What do you mean reversed for PAA? The PAA does not require an estimate for the FCF. They usually wouldn't provide you the FCF directly and you'd need to calculate it yourself, w…
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They're both the same formula - One is just providing more information. Carrying amount would be the prior LRC that is being roll forwarded. The adjustments to a financing component are shown in sample 7 of the sample IFRS questions. I am not su…
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Deferred Acquisition Cost And yes, always (0.5-1/3)
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Just reduce the CSM by 250 so you'll get 142.5
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No, I think you are right. F is supposed to include the words reinsurance premiums payable and other acceptable non-owned deposit, consistent with what's in the MCT. I'll fix that
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risk attaching means the reinsurer assumes all risks written in a given period. Loss occurring means that the reinsurer only covers losses that occur during a given period
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That's part of the UPR calculation (Prem Received + Premiums Receivable - Earned Premium)
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It really boils down to experience and actually working on loss components and knowing when to disclose onerosity. This is probably not what you want to hear. That said, in the exam just explain more. For example, if you think having a higher COR th…
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All good
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That's because you are viewing things at the end of 12 months (You have already paid out 52% of ultimate and are only left with 48% to pay out). So from months 12 to 24, you will pay out 20% of the total ultimate, but there is only 48% remaining to …
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Yes, they are paying the entire premium for 3 years up front. Technically, this means you can earn substantial investment income before your premium is "earned" for the latter years (2-3). This leads to the significant financing component
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In 2015, they only provided you investment income which does not include realized gains while in 2018 it is net investment income which does include realized gains
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In Q19, that is very specific because onerosity means that you are loss-making. Having an actual COR > Planned COR does not necessarily mean you are loss-making, you could just be making less ( Note they do not say by how much you are worse than …
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They should both be the same. I have no idea why the formula's are set up that way. The only difference is one is on a quarterly basis and one is on an annual basis