RESCORE fail BattleActs


# BattleActs Abbreviation Summary Keywords Rank
1AB.TNCAlberta has created a policy for ride-sharing providers like Uber. (TNC stands for Transportation Network Companies. ) The policy covers the companies and their drivers.ride-sharing45
2BCAR.CdnBCAR (Bests Capital Adequacy Ratio) is an opinion on the FinStrength of an InsR & its ability to meet ongoing PH obligations. The components of BCAR are BOB (B/S strength, Operating performance, Business profile).FinStrength, BOB25
3BCAR.CatBCAR.Cat (Bests Capital Adequacy Ratio for Catastrophes) is an opinion on the FinCond of an InsR after a catastrophe event. Good RskMgmt is emphasized.FinCond, RskMgmt, hurricance, eqk26
4AAA.CrdScAt an NAIC hearing in 2009, Jeff Kucera (AAA member) discussed credit scoring as a rating variable. Although credit scores can be distorted by downturns in the economy, he felt that credit score is a good rating score, rating31
5CAS.ATRAATRA = American Tort Reform Association. This is a U.S.-centric paper, so is of lesser importance, although there was a question worth 1.75pts from the 2012 exam. (Question #11)punitive damages, tort reform54
6Baer.IntroBaer & Rendall is a foundational paper on the InsInd in Canada - covers the most often asked essay-question: legislation regarding InsR solvency. (Mnemonic: CIRCA-F)solvency, CIRCA-F15
7BK.ReinsBlanchard & Klein covers the mathematics of ReIns, specifically, the impact on the ceding company's financial statements and key financial metrics. reinsurance42
8CCIR.ARinstrThis is a long, boring set of instructions on how to complete exhibits in the annual return. There are roughly half-a-dozen types of calculational questions in this paper. The excess/deficiency ratio shows up on virtually every exam.ExRatio3
9CIA.CSOPFoundational. Most of these 6 CSOPs (Consolidated Stds of Practice) are also covered in other papers. See OSFI.AA for Section 2400 (Appointed Actuary) and CIA.DCAT for Section 2500 (DCAT)foundational, standards of practice40
10CIA.ModelsThis paper on models isn't too hard and it's quite nicely written. The most important thing you have to know is the definition of a model. (A model is a practical representation of relationships among entities using Financial / Economic / Mathematical / Statistical concepts.) You also have to know the elements of a model, and be able to explain model risk. Of the four new papers on the syllabus for Fall 2018, this seems to me to be the most important.
Unfortunately there are a lot of bullet point lists, which is a favorite type of CAS exam question. That means there's more than average to memorize. (Get started early!) But aside from the basic definitions and concepts, there are actually some fun problems that can be created with this material.
model elements
model risk
11CIA.SubseqAn actuary never has perfect information. Sometimes critical info comes to light only after the analysis has been done. This paper provides a decision tree for how such subsequent events, as they're called, should be handled.DecisionTree14
12CIA.TaxesOne formula (tax effect of discounting). Meaning of formula (pre-payment of taxes). Often combined with an MfAD calculation.taxes, pre-payment36
13CIA.DiscntThere is overlap b/w this and the CSOP paper, but CIA.Discnt also addresses discounting of [1] ceded liabilities [2] premium liabilitiesdiscounting, CededLiabs, PremLiabs20
14CIA.DurationMost of the information in this reading is contained in other readings. For example, the premium liability reading covers the duration calculation for premium liabilities. Also, the reading on discounting covers the cash flow matching model. Nonetheless it's a good summary of concepts related to duration. In particular, it clarifies the calculation of the Macaulay, modified, and effective durations.Macaulay duration, modified duration, effective duration58
15CIA.DCATDynamic Capital Adequacy Testing is a stress-testing technique. It is a critical tool for OSFI in assessing the FinCond of an InsR. Poor DCAT results wil cause OSFI to intervene.stress-testing, FinCond, RskMgmt, BaseScen, PAS, ripple effect, MgmtAction12
16CIA.RunoffShort Paper (1 concept): How do you deal with discounting when considering runoff?runoff, CY-emergence, discounting48
17CIA.AcctingThis paper is dense, hard to read, and appears on almost every exam. Luckily, the exam questions are repetitive. You need to understand how the 3 different classes of bonds are dealt with from an accounting standpoint. The 3 bond classes are: (HTM, AFS, HFT) = (Held to Maturity, Available for Sale, Held for Trading)HTM, AFS, HFT4
18CIA.ValnThis reading summarizes a lot of important information regarding duties of an AA that is covered in more detail in other readings. In terms of exam questions, there is very little here that you can't get by thoroughly studying the other parts of the syllabus that relate to AA duties. EXCEPTION: Current or Emerging Issues, pages 9-13. (This is not discussed elsewhere.)appointed actuary, emerging issues59
19CIA.MfADThis paper is mostly conceptual, but old exam questions are largely computational. Computationally, you'll have to be able to calculate APV(ClmsLiabs). Conceptually, you'll need to memorize the characterisitics of a good RskMargin, and some considerations in their selection.risk margin, APV(claims liabilities)2
20CIA.MatQuestion: When can a discrepancy be ignored? Answer: When it is 'small enough' not to matter. (In other words, when it's not material.) Memorize the defn of materiality.omission, under/over-statement30
21CIA.PrLiabsThe most complex computational problem on the syllabus is calculating APV(PremLiabs) and DPAE/PDR. (It is NOT the same as calculating APV(ClmsLiabs)).APV(PremLiabs), DPAE/PDR5
22CIA.DisclosureIFRS 4 has enhanced requirements for F/S disclosure. This paper discusses some of those requirements.IFRS 4, disclosure47
23CIA.ReInsThe purpose of ReIns is to transfer risk, but it isn't always obvious that risk has really been transferred. A reinsurer may find subtle ways to limit their liability in the event of a claim. These are referred to as risk-limiting features. This paper discusses the 4 key principles in determining the existence of risk transfer. See Frei.RskTrans for further details.reinsurance, risk transfer, risk-limiting features41
24CAS.GovtInsThere are a number of reasons for, and examples of, governmental participation in insurance. (Ex: agricultural insurance) Private insurance, motivated by profit, cannot always meets goals that society considers desirable. (Ex: universal medical coverage)universal coverage, profit motive27
25Chev.AgricThis updated paper on agricultural insurance is interesting and well-written. There are 6 BRM programs (Business Risk Management programs) within the GF2 framework (Growing Forward 2). The bulk of the paper deals with the first BRM program, production insurance. (Production insurance nicely illustrates general actuarial pricing concepts. Self-sustainability is a critical part of the pricing of production insurance; stochastic methods are used.) self-sustainability, stochastic methods10
26Dav.NonPecIn Canada, non-pecuniary damages are capped at an inflation-adjusted $100,000, from 1978. (Non-pecuniary damages are punitive versus compensatory.) This law resulted from a trilogy of Supreme Court decisions in 1978. The cap has been challenged, but never overturned. See Lee v Dawson from 2006.non-pecuniary damages, Trilogy, Lee v Dawson24
27Dibra.FailIf OSFI's mission is to minimize the probability of insolvencies, then Dibra & Leadbetter's paper on why insurance companies fail should be required reading. There are well-known risk factors, both internal and external, and insolvency is rarely a surprise.governance, new entrant, rapid growth, small size22
28Dutil.FAThis paper is a puzzle because it bears little resemblance to the types of questions of the exam. It is heavily tested, but the best way to learn about FA is to go the FAQ section of the FA website, and to study old exam questions. (The computational question, #7 from Fall 2015, would be very difficult to answer based on the reading. You would need to be familiar with those computations as part of your work.)auto insurance availability, RSP, FARM, UAF7
29Feld.RtAgsRating agencies are supposed to provide reliable FinStrength ratings for insurers. So people were very P-O'd in 2008-09 when highly rated mortgage-backed securities went up in smoke. A.M. Best, Moody's, and S&P screwed up big-time, and legislation now requires rating agencies to disclose details of their method. FeldBlum's papers are always well-written.A.M. Best, Moody's, S&P28
30FSCO.PPAThis paper is painful to study. It is specific to ON auto insurance and is bascially just a detailed list of filing requirements. Ugh!prohibited risk classification elements, simplified guidelines, group membership21
31FSCO.664Honestly, I don't have a clue what the point of this reading is. :-(Huh?60
32FSCO.UBIUBI stands for Usage-Based Insurance. It's invasive, and the privacy commissioner has ruled that the data it collects is subject to privacy laws, just like credit scores. Normally, UBI data is used only to give rate discounts for good driving. There are interesting similarities & differences between UBI-rating & credit-score-rating.rating, real-time data collection, CrdSc39
33FSCO.CovgsThis reading is just a dictionary of coverage definitions and basic insurance terminology. (So boring...) It defines Ontario auto coverages like accident benefits, and terms like minor injury.accident benefits, minor injury, catastrophic injury, tort deductible61
34Frei.RskTransHere, we have a detailed discussion of the pitfalls and considerations in RskTrans. It complements the paper CIA.ReIns, but it delves much more deeply into the problem of determining whether RskTrans has really taken place.ERD, 10-10 rule, pitfalls, practical considerations17
35Harris.TortSome countries, such as the U.S. and Australia, have made headway on reforming tort systems that many perceive to be unfair, costly and inefficient. Joint and several liability, compensatory damages, collateral sources and vicarious liability have specifically been targeted for change. Has the time come for amendments to Canada's legal rules?JCCV23
36IBC.Code10 guidelines for the use of credit information in personal insurance for U/W & ratingcredit score, guidelines46
37IBC.FloodCanada is the only G8 country without a residential flood risk management program for overland flooding. The main reason is adverse selection. This paper examines international best practices for ideas on how to create a flood program for Canada.climate change, population explosion8
38ICA.Ch47Most. Boring. Paper. Ever. It's just a bunch of bullet points written in legalese. Luckily, there is little that isn't also covered by OSFI.AA. Study Strategy: Pay particular attention to sections 203 & 359-370 as these account for ~90% of old exam questions, some of which overlap with OSFI.AA anyway.boring, appointed actuary, AudComm, BoD34
39ICBC.AffordableAfter decades of stability in the British Columbia auto insurance market, the frequency and severity of accidents increased rapidly in the several years leading up to 2016. This has created concerns over availability and affordability. Recent initiatives, such as increased penalties for drunk driving, have not been enough to resolve these issues. This paper is the result of an external review commissioned by the Ministry of Transportation.
Even though this paper was published in July of 2017, the topic of auto insurance in BC is not new to the syllabus. The previous paper was removed from the syllabus for the Fall.2018 sitting. Prior to Spring.2015, it was heavily tested, but seems to have been dropped in recent sittings, and became one of the lower-ranked papers (bottom 20%). In any case, the questions were repetitive and pretty easy. You can learn everything in an hour or two, then just review as necessary.
BC Auto Insurance, ICBC, Basic Autoplan, Autoplan Optional, auto product redesign50
40IFA.Solvency2The topic of Solvency 2 is covered lightly in chapter 25 of a different paper, Odo.FinReg. And an even smaller part of that topic is covered here. This syllabus reading is only 3 pages (p49-51) of a 103-page paper on Solvency 2. The relevant sections are 6.4 & 6.5, and cover something called ENID or Events not in Data. You can think of these as a high severity, low probability events that might not be part of your historical data, but should be considered in setting final reserve levels. (Example: Include a load for the possibility of an earthquake even if there has never been an earthquake in your data.)
Including ENID in reserves strikes me as overly conservative, but I wouldn't worry too much about it. Remember that Solvency 2 is the capital framework for insurers in the European Union, so it's a low importance topic relative to the rest of the Exam 6 syllabus.
Solvency 2
ENID (Events not in Data)
41KPMG.RegOvThere are three broad systems of RtReg - AMC (Active, Moderate, Competitive). Each are subdivided into approaches that span the continuum from Govt mandated rts to open, moderate, competitive32
42KPMG.PACICCThis paper should have been called: 'Are Actuaries Useless?'. Seriously. PACICC commissioned KPMG to study whether P&C insurers that use actuaries are more likely to succeed. Um...I hope so! (Apparently there are insurers out there that do not use actuaries. Go figure.)are actuaries uselss???53
43Land.CasesCovers 13 important Canadian legal cases. The reading is difficult because it's in legalese, but all is not lost. Start by googling the cases - they are all well-known and you'll find summaries written in plain English.duty to defend, catastrophic injury, subrogation rights, Charter of RIghts, cause of injury, jurisdiction11
44Marshall.BenefitsThis paper is only 5 pages and is a executive summary of the state of auto insurance in Ontario. (Spoiler alert: It sucks!) The frequency of accidents has been going down, but the severity and overall costs have been going up, and Ontario has the highest premiums of any province in the country. The water-cooler gossip is that too much money is going to lawyers and not enough to medical care for victims.
The source paper is easy to read, but I honestly don't think it's worth it. I've identified the most likely exam questions in the wiki article and the BattleCards.
Ontario auto insurance, structural reform of regulatory system52
45Mayhall.USregShould insurance regulation in the U.S. be state or federal? The longstanding answer is state, but there have been recent encroachments by federal law, namely ACA (Affordable Care Act) and D-F (Dodd-Frank Financial Reform). (Significant overlap with Noonan.Reg)Affordable Care Act, Dodd-Frank55
46McD.IntroThere has been a long tug-of-war between Federal & Provincial governments over the power to regulate insurance. The Insurance Reference Case set an important precedent in limiting Federal power. (See Noonan, and also Mayhall, for how the U.S. approaches Federal versus State authority over insurance.)Insurance Reference Case16
47Morn.PensionThis isn't a P&C paper. It deals with issues of health, workers compensation, and employment insurance, so it's of lesser importance. Many previous exam questions concern the financing and tax treatment of these, WC, EI, financing, taxes33
48MSA.RatiosJust a bunch of formulas - covers the calculation & interpretation of key financial metrics. ROE, U/W leverage, diversification score6
49Odo.FinRegDon't panic! This reference is 475pgs, but the syllabus only covers about 50pgs. It's basic accounting stuff, with some Canadian content and Solvency 2 thrown in.SAP, GAAP, CGAAP, Solvency 229
50OSFI.AAThis heavily tested guideline describes OSFI's requirements regarding the role of the AA in federally regulated insurance companies. It summarizes certain sections of the Insurance Companies Act (see ICA.Ch47) but OSFI.AA is much easier to read.AA, requirements, roles, peer review18
51OSFI.CorpGovGood corporate governance should incentivize good corporate behaviour. Why? Failure of an FRFI can severely impact the economy. (U.S. financial meltdown in 2007-2008.) Risk governance is the most important aspect of corporate governance.FRFI, risk governance, relationships56
52OSFI.EqkCovers risk management practices for insurers with material earthquake exposure.risk management, PML9
53OSFI.MCTThis is the most important paper on the syllabus and accounts for roughly 10% of the points on each exam. OSFI considers the MCT ratio (Minimum Capital Test ratio) to be a prime indicator of an insurer's health. This ratio compares capital available (CapAv) to capital required (CapReq). The benchmark MCT ratio is 150%. If an insurer's ratio falls below this benchmark, it may be in danger of having insufficient assets to cover its liabilities, and may come under increased regulatory scrutiny.
You must first understand how to calculate the MCT ratio. You must also have a conceptual understanding of how items in the financial statements affect the final ratio. The MCT ratio is the first of several financial health ratios listed in the paper MSA.Ratios.
capital available
capital required
54OSFI.MemoAAOSFI.MemoAA is an InsR-specific paper that communicates OSFI's DETAILED expectations regarding the AAR (Appointed Actuary's Report). An indispensable reference if you're assisting with the AAR. unqualified opinion, Fall Letter35
55OSFI.ORSAORSA is a tool for helping mgmt understand the connection between risk profile and capital needs. (Basically, a risky business needs more capital.) The intent of ORSA is to consider InsR-specific risks that are NOT covered in industry-wide capital guidelines (MCT).reputational risk, strategic risk, ICT (Internal Capital Target)13
56OSFI.TargCapThis paper communicates OSFI's expectations regarding capital assessment of insurers. OSFI assesses the ONR (Overall Net Risk) of an insurer, then calculates corresponding capital requirements at various levels: minimum, supervisery, internal, higher than assessment, significant activities, internal capital target, ONR (Overall Net Risk)57
57OSFI.StressOSFI.Stress is yet another elaboration of the central actuarial theme of risk management. It is a general discussion of stress-testing that applies to any FRFI (Federally Regulated Financial Institution). Contrast this with the CIA's educational note on DCAT that applies only to insurers. There is overlap between the two, but the DCAT paper is significantly more important.stress-testing, RskMgmt, FinCond19
58OSFI.SupFrmThis is a foundational paper for how OSFI supervises financial institutions, but is of minor importance for this exam.OSFI supervision, FRFI43
59OSFI.AR1This isn't a reading - it's an Excel file of a sample annual return for an insurer. You need to have a genenal understanding of the layout. Much of it is not specific to insurance (balance sheet, income stmt) and if you've taken a university course in accounting, you're half-way there. Then there are insurer-specific exhbits such as capital available, and net commissions, among others, most of which have been covered in old exam questions.annual return62
60OSFI.AR2This isn't a reading - it's an Excel file of a supplement to an insurer's annual return. It should be sufficient to have a general understanding of the layout.annual supplement63
61PACICC.CompYou need to know how to calculate the compensation a policyholder receives when their InsR goes bankrupt. Variations of that question have appeared on the exam 4 times since 2012. Note the purpose of PACCICC is to provide compensation AFTER insolvency, whereas the purpose of OSFI is to PREVENT insolvencies.insolvency, policyholder compensation44
62Webel1.TRIATRIA (Terrorism Risk Insurance Act), signed in 2002, was an act of U.S. congress to ensure the continued availability of commercial terrorism insurance in the U.S. It is a cooperative public/private scheme. (There is no such scheme in Canada, and terrorism coverage by private insurers is limited)TRIA, public/private37
63Webel2.TRIATRIA, originally passed in 2002 (and extended in 2005 & 2007) has been updated and extended as of Jan 12, 2015. You are responsible for the nature of these extensions.TRIA extension38