cornedov
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Perhaps EP returned to cedants would be net of the expense allowance? Or the loss shared with industry would include the expense allowance? I agree with czs as its not so clear how this expense allowance is funded when the full premiums are returned…
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I think you are thinking of participation ratios, where as card 16 is referring to transfer limits. Participation ratios determine how losses and premiums ceded to the pool will be shared with the industry. This is based on EE. Transfer limits…
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LRC under PAA does need a RA if it is onerous
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Thanks!
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I see thanks! Also does GRID in AB only apply to PPA basic coverage?
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I apologize for going back and forth but I am still not sure I understand. For sample 22a, total expenses = 320 which is treated as an outflow. This includes 250 of acquisition cost that is deferred and 70 of directly attributable maintenance exp…
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Makes sense, thank you!
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Certain events like reinsurer default due to gradual deterioration would be an adjusting event and reflected in the work. Their sample answer seems to assume the event was a cat and would only be disclosed. Is it fair to say this is an open ended qu…
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This is probably too technical for an exam question but looking at IFRS 17.72 it seems like change in regulation would qualify as a contract modification that changes PAA eligibility and could lead to de-recognition and new recognition under a diffe…
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@Staff-T1 it seems like DAC should be included in CSM calculation. CSM = Premiums - Claims - DAC = 1000-400-250 = 350 not 600 At least this is consistent with sample 22 of the IFRS17 sample questions (DAC is treated as an outflow for the purpo…
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For question 18 is appears that they do adjust the payment pattern for an average accident date of 1/3. If we are evaluating a contract at inception wouldn't the average accident date be 0.5 assuming accidents occur uniformly over the contract. D…
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Is this specific to PAA or also applied to GMA?
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I think this Card is referring to Fall 2014 Q13 b.ii. I think b.i in this context may just mean question b part i
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hi @graham the above table suggests AB currently uses file and use. One of the battle cards in the AB Auto Reading (card number 9) suggests one reform being considered is switching from prior approval to file and use, which suggests AB is prior a…
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Thanks that makes sense! I was looking at section 8 of the PAA eligibility paper: "If the eligibility criteria are met for a group of contracts, the PAA is used for the duration of the contracts within the group. However, subsequent modifications…
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Thanks! As a heads up I think the AAD calculation is discussed on the new LRC paper on page 47 but seems like a very tricky thing to ask on an exam so I wont worry too much about it. https://www.casact.org/sites/default/files/2023-05/6C_CIA_Educa…
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I am not sure I understand what you mean when you say DAC is indirectly amortized in the CSM. Are you able to clarify? Say there is a simple contract example with premium paid of 1000 at initial recognition and DAC of 250. I expect 4 claims of 10…
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I also had a similar question: FCF = Losses + Expenses + RA - Discounting - Premium = -392.5 CSM = 392.5 GMA LRC = FCF + CSM I am wondering if it is because the question says premiums paid at inception which for non-onerous contracts ince…
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The exam notes that an alternative solution was accepted using ratio of ROE to ROA which is what I did. I was wondering if someone could confirm my math here: Ratio of ROE/ROA = Assets/Equity = (E + L)/E = 1+L/E so L/E = 6.2/3.5-1 = 0.77.... …
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I see the new agriculture paper was published in 2014 so maybe it is slightly outdated but I felt it was still applicable to the current agriculture paper
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No problem. I would confirm with @Staff-T1 to make sure my interpretation is right
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For the contract VadimSem described there would be no point in time where FCF = -500 and LRC booked = 500. The only way we can have a LRC of 500 under PAA/GMA is if premiums are already received. If this is the case FCF = 0. Before we receive the…
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For part D "Fully describe how the loss component of the company would be impacted if the company entered into a reinsurance agreement that resulted in a net gain or a net loss." Part of the answer key suggests 0.25 marks were awarded for stating…
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In this example we have 55000 in premium received and 7500 in DAC for policies effective in 2023. As we earn premium received we recognize it as insurance revenue and it reduces our LRC. I guess my question is why do we not amortize the 7500 in DAC …
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Just to be clear on what this AAD adjustment is, the AY payment pattern given is an LIC payment pattern which assumes an average accident date of mid-year. LRC may have a different avg accident date and so we need to adjust the timing of these payme…
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Under 4.3.2 of https://www.casact.org/sites/default/files/2023-05/6C_CIA_Educational_Note_IFRS_17_Actuarial_Considerations_Related_to_Liability.pdf "Premium inflows would normally be determined based on the balance of premiums receivable for the …
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Appendix C of the duration the LRC has 3000 is the total premium, 2900 has been received and 1500 is earned. Unearned premium is 1500 and premium receivable is 100. The LRC is 1400 here suggesting the formula is: UEP - premiums to be received …
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I believe a short position would still have the same level interest rate risk but would simply move in the opposite direction. My understanding of the main idea here is we take the NET POSITION (the distinction of short vs long doesn't particularly …
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Its the adverse 95th percentile
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The coverage level in this question is 70%. The expected yield for the entire crop = area probable yield per unit of area = 100584 = 58,400 The production guarantee is only 70% of this so we only get paid out if actual production falls below 0…