graham
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If you look at the statement of the problem, the TOTAL for "One-Way Analysis Indication" is 0.0%. It's true they didn't specifically say the overall change had to remain at 0.0% (which is the same thing as revenue-neutral) but if you didn't have to …
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That isn't quite what unwinding is. Here's an example: * Suppose you bought a phone on Jan 1, 2021 for $500 but you don't have to pay until 1 year later on Jan 1, 2022. * Let's say you earn 3% interest in your bank account so that the present …
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Question 1: * The wording of the question was a bit unclear, but what they were really testing was whether you knew the steps in BCAR's natural catastrophe stress test. This is discussed in the BCAR.Cat wiki article here: * https://battleactsm…
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Oh yes. I changed the hint for this recently based on a suggestion from @michaeletkin that you can read about here: * https://battleactsmain.ca/vanillaforum/discussion/428/some-memory-tricks I forgot to change it in ICA.Ch47. Thx!
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No, I don't think you had to fully reproduce the examiner's report solution to receive full credit for this question. I doubt anyone provided a full solution as in the sample answer. It was a pretty hard question because there were no similar proble…
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I double-checked the source text (available only through the study kit) and the yield-based & non-yield-based plans are discussed only in the context of Agri-Insurance. A strict interpretation of the source text would be that these plans apply o…
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There is never an overlap between CapReq for unpaid claims and CapReq for cats. These are separate categories within the insurance risk component of MCT. Some of the CapReq for unpaid claims may be due to cats that have already happened but CapReq f…
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I don't think the lists of ripple effects and management actions are exhaustive. The subheadings say "Possible ripple effects..." and "Possible management actions...". That implies there are others that are acceptable. I think your reasoning is vali…
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Yes, that's right. The reason you don't calculate the investment income for the first CY in the excess/deficiency problem is that you're evaluating the excess/deficiency at the end of the first CY. That's your first "data point" and you're tracking …
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In general, not all of the gross UPR will be earned by the primary insurer - some of it belongs to the reinsurer. The primary insurer's share of the UPR is the net UPR and any insurer costs, which include FutRe, must be paid for from money that belo…
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Unknonws A & B: * The investment income calculation here is actually not the full "investment income from insurance operations". It is just the investment income on unpaid claims liabilities, which is the same as the investment income piece…
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The key to understanding the connection between yield and level of liabilities is that an insurer holds liabilities on a discounted basis. If you start with a particular value for undiscounted liabilities and then apply the discounting process, a hi…
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Every exam problem has used the default value of 0.5 but the OSFI.MCT source text labels the correlation for diversification as R. That makes me think it doesn't always have to be 0.5, which is why in the web-based problem in quiz 1, I made it a var…
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The CAS has not made these Excel files available even though they are listed in the syllabus. I sent you the version I've got. Please see the little envelope under your name.
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Yes, those BattleCard answers were reversed. Thx.
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I think that would depend on the %-margins that are used in the MCT calculation. I'm not sure how those margins are selected. It could be that they are chosen to correspond to more extreme events but the readings don't really discuss any of those de…
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Let's step back and look at what each of these calculations is doing: * The analysis of unpaid claims is a very detailed reckoning of liabilities and includes discounting and PfADs. The result appears on the liability side of the balance sheet …
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The short answer is that EPR is part of equity. Equity is shown on the lower half of page 20.20 in the annual statement. (The upper half of page 20.20 shows liabilities) This can be a little confusing because often we use the terms "reserves" and…
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I like it. I have inserted your suggestions into the BattleCards and have linked to here from the wiki. Thx!
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No, "other revenues" is part of regular net income. The definitive way to know this is to look at page 20.30, "Statement of Income" from the quarterly return. (This is called Annual Return I in the syllabus.) You can download this from the CAS we…
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Gross of Reinsurance means: * direct + assumed Since this is a reinsurer, there is no direct business. It is all assumed. But it then appears as if this reinsurer purchased 50% quota-share reinsurance from another reinsurer. Note also th…
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Yes, it can be a bit confusing. Generally, APV refers to unpaid amounts because amounts that are already paid don't need to be discounted (or have PfADs applied). In this question however, the "ultimate" data apparently includes APV of the unpaid am…
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You don't need to know how to calculate "investment income from operations" anymore, but you do still need to know to calculate "investment income on unpaid claims" in a problem such as 2019.Fall Q18.
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That question has come up before and I think the second answer is wrong. Here's a link to further information: * https://battleactsmain.ca/wiki6c/Explanation_for_2016.Spring_14a
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That's what it looks like to me, that the first formula only makes sense at initial recognition. But if I'm being honest, I'm not 100% certain. This IFRS material is new to most Canadian actuaries and I'm learning it along with you guys using the sa…
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I'm not quite sure if I understand your question so let's break it down: * If FCF < 0 then the contract is likely profitable so there is a net inflow of cash to the insurer (this would be a non-onerous contract) * In this case, the insurer …
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That's an insightful interpretation. Intuitively, it looks like (UEP - receivables) is intended to match premiums received, and that (2)+(3) is intended to match DAC. If you try to work out an example with monthly payments however, the formula: …
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Yes, thx. I've edited it.
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Here's a link to a very similar forum question. If this doesn't answer your question, please let me know. * https://battleactsmain.ca/vanillaforum/discussion/341/2019-spring-q18
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My reading of the text is that the second formula, Insurance Contract Liability, would include the 4 components given your first formula. In other words, if you are valuing the total insurance contract liability, you may need to separate the calcula…