Staff-TS
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Yes, your understanding is correct. The source material does state those two things exactly, and I was not able to find any items that clarify this (on the syllabus). (2) is more strict, with the AGM having more flexibility (e.g. can be reschedul…
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Good catch on the contradiction. CCIR aims for uniform solvency regulation across provinces, and the Baer paper supports that. But the suggestion to transfer regulation to a stricter province implies differences still exist. While CCIR has mad…
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You're right that "Loss is paid when it occurs" specifies the timing of loss payment, but it's not a risk-limiting feature because it does not restrict the amount of risk transferred. Risk-limiting features in reinsurance contracts typically incl…
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To your first point, yes, the special levy is in reference to the contributions made in 1998 - 2000 to the compensation fund. To your second point: they broke it out, but it is referring to the same thing. Members are assessed proportionally base…
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This is a great question, and I think it can be subjective. The first point that comes to mind is that legislation is legally binding, and would enforce uniformity across companies and jurisdictions (if the legislation is federal). Additionally, …
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Although surplus is available to be used, it is not directly added because these requirements aim to ensure that an insurer can cover adverse outcomes under worst-case scenarios. Surplus can be: * volatile; * may not be entirely liquid in stre…
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While the risk-free rate is generally recommended for discounting cash flows in risk transfer testing, some practitioners argue that using the reinsurer's expected investment rate might be reasonable, as it reflects their anticipated returns. Howeve…
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Yeah, Harris is the primary paper on tort reform. Specifically in the context of class action lawsuits, I would agree with T1 in that whatever case or article was initially referenced for this is likely off the syllabus now. I wrote 6C Fall of 2022 …
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I assume you are referring to part b. of S2019 #3. The question states: "Briefly describe two situations where an S.P.F. No. 9 policy purchased by a Transportation Network Company would not provide any coverage to a driver logged into the Transporta…
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Thanks! @graham
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I found a question relating to class action suits on the Fall 2018 exam, question 9. However, I cannot find the relevant reading for this question. I will try and find where this question is sourced from, and get back to you later this week. Perh…
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The peer reviewer is expected to meet the same qualification standards as the AA. 1) When looking at the AA qualifications outlined in the document, it does not explicitly exclude consulting experience, so if the consulting role included relevant…
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Yes! Perhaps that detail is something that should be brought into the wiki. I'll see if there's an opportunity to increase clarity on the main page. Thanks Ahelan.
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Yes, I believe so. The examiners report states: "Because the table in the question incorrectly stated that the payment was to the reinsurer, and not from the reinsurer..." They did give full marks to candidates who answered correctly, regardless …
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Fall 2016, a. part i., there are multiple conditions at play. The reinsurance treaty has an attachment point of $1M, an aggregate limit $2M, AND an aggregate deductible of $1M. So for a loss of $3M, the treat would kick in as the loss exceeds …
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You are right, ERD can be thought of as ERD = Frequency x Severity as a % of premium. The paper gives a more precise definition as: ERD can be viewed as the probability of a net present value (NPV) underwriting loss for the reinsurer multiplied b…
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Your first point is interesting. There aren’t specific regulations that require reinsurers to hold a certain BCAR rating (that I know of), but regulatory bodies and industry standards often expect reinsurers to maintain strong financial health. The …
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A pro forma transaction is a financial adjustment or planned change that hasn’t happened yet but is used for analysis. In the BCAR model, AM Best analysts look at these transactions (e.g. mergers, capital infusions, or other financial moves) to see …
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It looks like some updates for the "5 key elements of ORSA" occurred, where there is now a hint to the discussion thread with the memory trick "MIRrOR". Note that wiki updates occur consistently, to clarify points and correct spelling mistakes or…
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Yes, your understanding is correct! Going to write out the math for anyone reading this. ER = (EPR + ERC) * 1.25 Where: EPR = 0 in this question, and ERC = ERX - FR * ERX = (East Canada PML500^1.5+West Canada PML500^1.5)^(1/1.5) * E…
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For Canadian insurers, the amount of capital and surplus corresponds to a maximum of 10% of total equity as at the end of the reporting period being filed (here). However, items labeled as "Nuclear and Other Reserves" under Shareholders' Equity are …
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Example 1: The policy was effective 2021-03-01, and the winding-up order was made 2021-07-01. The amount of time earned was 4 months (March, April, May, June). This leaves 8/12 months unearned. Good catch, I will have this adjusted. Example 2: Th…
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Lets consider the answer to this in terms of the FARM and RSP. The FARM provides a residual automobile insurance market for owners and operators of motor vehicles who may otherwise have difficulty obtaining automobile insurance otherwise. Insurer…
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I think the confusion here lies in the different information given. The first table (columns 1-4) discount the losses to time 0, using half-years for discounting since the question explicitly states "all pmts are made in the middle of the year". Not…
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The spreadsheet is correct. I will have the wiki adjusted, thanks for pointing that out!
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Yes, that equation is correct. For others reading this, the equation can be derived from these two: MinCapReq = BaseCap x 100% SupCapReq = BaseCap x 150% As for base capital, this terminology doesn't appear in the source and was moreso develo…
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The definition of stress testing is defined as follows in the battle cards: * Stress testing is a risk management technique to evaluate effects on financial condition, due to specified changes in risk factors, corresponding to exceptional but p…