2017 Spring 19

For TAC formula, do we assume "Tabular discount in reserves" to be "Tabular discount in medical reserves"?

Comments

  • Yes, it seems the solution in the examiner's report made the assumption that the tabular discount was for medical reserves.

    From your question, I assume you realized that if it was for indemnity then you would not subtract that amount from policyholder's surplus to get TAC (Total Adjusted Capital).

    If you get a question like this on your exam and the question doesn't specify whether the tabular discount is medical or indemnity, then be sure to state your assumption.

  • That is a good point. Thanks!!

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