graham
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Those topics are discussed in different IRFS17 readings so they are still on the syllabus. I believe it's just that those particular sections from the CIA.IFRS17 reading have been removed. If you look on page 14 of the syllabus, they definitely say …
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Hi Wilson, I'll try to briefly answer your question below, but the best advice I can give you here is to just memorize the answer and move on. The reason I say this is that CIA.Runoff is a very low ranked topic. That means you are unlikely to …
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I would say yes. Even though it involves bond valuations (which are discussed in the discontinued CIA.Accounting reading) all you had to do here was calculate the weighted average of yields for individual bonds. They did not give you the book value …
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Hi Wilson, These 2 methods are basically the same. This was not a good exam question. This is actually from the CIA.Runoff reading, but I put it in CCIR.ARinstr because it was closely related to part (a) of that same question. Here's the direct l…
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In your calculation, you have (14K + 4.5K + 0.5K) = 19K for investment income, but the correct value is 18K. You should subtract 0.5K, not add it, because it is an expense.
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Yes, I can see how that could be confusing. The reason they use 6.77% for the excess/deficiency ratio is that the bond yield is different from the total investment yield. For discounting purposes, you should use the bond yield because it's lower and…
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Okay, let's see: * For 2013, you get 50,000 / (34,200/1.5) = 219% * For 2014, you get 56,000 / (40,000/1.5) = 210% And the correct conclusion is indeed that 2014 should have to lower MCT ratio (based on a qualitative analysis as in the exa…
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Either is acceptable according to the CIA.Duration source text. See the following section of the wiki: * https://battleactsmain.ca/wiki6c/CIA.Duration#Effective_Duration
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As far as I can tell, the formula for Investment Yield is still on the current syllabus. The formula that seems to have been removed from the syllabus is "Investment Income from Insurance Operations". (This may also be referred to as "Investment …
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You can rewrite it in any way that's algebraically equivalent if that aids your intuitive understanding, and it seems like you've thought through this exhibit very well. One thing to be careful about however: It seems like you now have a good und…
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It's very confusing to get the "-" and "+" signs in the correct places, but let me make sure I understand exactly what you're asking before I try to answer: * In my prior post above, I said unearned commissions is a liability item on the balanc…
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Some of the answers to your questions are from a reading that is no longer on the syllabus. If a similar problem came up on a future exam, they would likely give you the discount rate instead of asking you to calculate it. Very briefly however, t…
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The solution in the examiner's report has errors in it, and there has been lots of discussion about this problem in the last few years. You are correct that AVG(0, 1250) should be included in the calculation of investment in part (b). The reason the…
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That looks correct. See also this forum thread: * https://battleactsmain.ca/vanillaforum/discussion/373/spring-2016-13 And about the maintenance expenses: You can assume 1 year for the payment.
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But about the maintenance expenses: I believe sample answer 1 is incorrect and you should follow sample answer 2 for how to deal with maintenance expenses: * In sample answer 1, the duration (or average accident date) of 1/3 is calculated near …
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Take a look at this post and my answer. If it doesn't answer your question, please let me know and we can discuss further. * https://battleactsmain.ca/vanillaforum/discussion/43/overall-net-leverage-ratio
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Hi Tony, * The answer depends on how the contract is written but I don't think you can assume the cost of a quota-share treaty equals the ceded premium. This isn't discussed in this reading, but there is likely a separate cost associated with t…
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That's a good question. I've added 2 new BattleCards in quiz 4 of the OSFI.Eqk readings. (Note that the answers to capital & surplus and EPR actually come from the OSFI.MCT reading but these 2 readings have a lot of overlap anyway.)
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Hi @oxalis, A retiree discount is mandatory for AB (Accident Benefits), but it is not prohibited for other coverages. So if the insurer wants to offer a retiree discount for all coverages, that would still comply with regulations. They would be g…
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Oh, ok. I see what you mean: * First, NEP is reduced by the cost of reinsurance. (That part is straightforward.) * But this NEP has to be put somewhere, like cash, bonds, or stocks. If NEP is lower, then the corresponding value of cash/bonds/s…
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Note that this isn't a quota-share treaty, so there isn't really any "ceded" premium. The cost of reinsurance is given as 5% of gross premium. The reinsurer then receives: * 5% x 450,000 = 22,500 but again, this isn't "ceded" premium. It's …
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Actually, you aren't the first person to ask this question. The Chevalier reading is only available in print form in the CAS study kit, not online. There are around 10 syllabus readings in the study kit and you have to go to CAS website to order it.…
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Keep in mind that these ratings, strong/neutral/weak, are judgmental so different people may come up with different ratings. In this case, I think the reasoning is as follows: * For option 1 (pure market solution) premiums are risk-based but th…
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That is correct! This calculation is actually in the wiki at this link: * https://battleactsmain.ca/wiki6c/2016.Fall_Q15_Redone You can also get to that wiki page from this section of the CIA.PrLiabs article: * https://battleactsmain.c…
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Hi Tony, In general, a regulator probably wouldn't draw any conclusions from a single ratio from a single year, whether it's the excess/deficiency ratio, the MCT ratio or any of the MSA ratios. (Although lots of negatives would likely warrant mor…
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I had been assuming that the 2019 reading was an update of the 2015 reading because they are both published by IBC and both discuss primarily residential flood insurance. To make sure however, I have just written to the CAS exam committee asking for…
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Please see edited answer above your last post.
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Hi Tony, Before addressing your question, one thing to notice is that "D", which is: * D = (UEP + O/S recoverable + Reinsurance Receivable) * - (Reinsurance Payable + NOD + LOC) will either reduce capital available (if D>0),…
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Regarding where the $100 goes within the total capital available of $500: * The source text isn't too clear on this and doesn't provide an example but the items in the 1st bracket represent assets on the balance sheet. (See page 20.10 of the sa…
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That isn't quite how I think about this deduction. Here are a few things that might help clarify what's going on: * First, if D<0, then the deduction is set equal to 0. The insurer's capital available cannot increase if D<0. (In other wor…