graham
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That's a very good question. I double-checked the source reading to see whether it said to use premium only from solvent insurers in the formula A=Bx(C/D) but it doesn't specify. There are a couple possibilities: * PACICC simply forgot to co…
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From the Dutil reading: But this doesn't completely answer your question. The participation ratio is slightly different for Ontario, but you are not expected to go to the external source. For the purposes of the exam, you should assume the fo…
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OAP stands for Ontario Auto Policy. OAP 1 briefly is: * The Ontario Automobile Policy (OAP 1) sets out the rights and obligations of insured persons and insurance companies related to automobile insurance coverages, and the terms and conditions…
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I can see how that's confusing. The standard BCAR score already has a catastrophe component. The stressed BCAR score is for a second catastrophe. (That's what I meant when I wrote that the stressed score measures the ability of an insurer to continu…
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The formula NUEP = NWP - NEP only works for 1 policy at a time. For a single policy, at a particular point in time, the sum of the earned premium and unearned premium must equal NWP. The example that I gave above was just for 1 policy. This relat…
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Yes, my mistake. For the required margin, the input is the undiscounted unpaid. Then there are 2 steps to get the final value of the required margin: * apply the TMF factor to get the dollar-value of the cost of capital * discount the cost of …
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Yes, if you look at the quarterly return, "Income from subs" is listed under "Other Income". And since "Other income" is part of Net Income, that means "Income from subs" is part of Net Income too. I should have just looked in the quarterly statemen…
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I just made this example up to try to better understand the concept because the source reading didn't have any examples. But now that I'm looking at it again, I don't think my example makes sense. I made it more complicated than it needed to be. Her…
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You've probably read the Important Note I put in the wiki but here's the link just in case: * https://battleactsmain.ca/wiki6c/IMPORTANT_NOTE From my correspondence with the CAS, it seems they should not ask questions like they have in the …
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There is a slight difference between the 2016 problem and 2018 problem in what you're given and how you calculate the Net Loss Reserves. (The terms "loss reserves" means the same thing as "unpaid claims".) The $8,000 does not have to be explicitly s…
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The way I understood the description in the source text is that the $4000 cap had been in place the prior year so insurers had capped their reserves at $4000 (for non-pecuniary damages for soft tissue injuries.) But when the cap was overturned on Fe…
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Very interesting @bkmlocks. I didn't know about those exceptions but they do make sense.
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The way I understood ruling 2 is that the award was reduced to $0 (rather than $100K.) Then there are no general damages and the Trilogy ruling is not relevant. It seems the insurer got more than what they asked for since all they wanted was a reduc…
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Question 1: "That means we suppose that the claim will be paid evenly during the year but the capital requirement for the unpaid claim will be released annually at the end of the year?" * Yes, that's correct. We assume the claims are paid on av…
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Ok, you made the assumption that invested assets from the prior year was 0 because it wasn't given but I'm not sure that's a valid assumption. I checked the statement of the problem because sometimes they say something like: "This insurer began oper…
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It can be confusing when 3rd-parties are involved. Here's what should have happened: * XYZ insurance pays Glynn That's it. The at-fault insurer pays and Glynn receives fair compensation. But Glynn got greedy - he wanted to make a profit …
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That's a good observation and I do not have a good answer. Laws evolve over a long period of time and it's very possible to have contradictory laws on the books. This seems to be an example of that and the ruling in any given case depends on the jud…
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You can probably argue that this is self-evident because there is a significant chance of loss for the reinsurer. But I'm also assuming the reinsurance premium is something "reasonable" for this particular situation. The premium would have to be inc…
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That is an astute observation. I did not do the extra step of checking that all the rebased values still satisfied the conditions. I had proposed a change of 0.8% for territory 2 (even though up to 1.0% is allowed) because I knew the percentages …
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I suppose theoretically you could calculate gross DPAE. Like you said, use gross instead of net values in the formulas and ignore any terms related to reinsurance.
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Yes, to your first question: Net Claims Liabilities refers to Unpaid Claims and Adjustment Expenses. (The issue you run into if you try calculating the 47876 value from the triangle is that it wouldn't include PfADs.) About dealing with the diffe…
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Now that I'm looking at this question again, it looks like something isn't quite right. It looks like they are mixing 2018 and 2019. * They are calculating underwriting income, losses, and expenses for 2018. * But for investment income, it loo…
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The concept of "reasonably self-evident" is meant to be intuitive. That means there are no strict rules for how to draw a conclusion. Every situation has different facts that have to be evaluated in relation to each other. I understand what you'r…
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It's hard to know what the examiners thought was missing in that's person's answer, but here are a few possibilities: * a more specific description of the injury: the plaintiff was a passenger in an auto accident and had their leg amputated …
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If you're referring to the 5% investment yield, I'm not sure you can calculate that from the given information. You would need the value of V at year-end 2017, but they only give you year-end 2018. Am I interpreting your question correctly?
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When I wrote the wiki article, I thought about trying to create a practice problem but they provide so little information that I couldn't think of how to create a good one. If you look at the natural catastrophe stress test procedure, here is the in…
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Well, it is all a little confusing because the sample quarterly and annual statements given in the syllabus readings don't have any numbers, just the blank forms, so it's hard to see how different exhibits relate to each other. The income stateme…
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Yes, FARM and UAF are all separate too. (You're welcome!)
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There would be 3 different participation ratios. The RSPs for each province operate independently.
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I think they just forgot to tell you they were gross triangles. That's why in my solution I specifically labelled those triangles are gross. By the way, that was the second-worst done question on the 2018.Fall exam. The average score was only 1.8…