Scope disclosures
in COPLFR.SAO
I'm not sure if this mnemonic will be helpful for anyone else, but right now I'm trying to use:
there's nothing DREARIRR (say "drearier") than scope disclosures.
Data sources
Reserve items in opinion
Evaluation of data for reasonableness and consistency
Accounting basis for reserves
Review date
Intercompany pooling (if applicable)
Reviewed reserve setting methods and assumptions
Reconciliation to Schedule P
I like "reconciliation to Schedule P" as the last R since it comes back up on its own and so it's more obvious when you've forgotten an R.
Comments
Lol. I will add that to the wiki.
Does "accounting basis" refer to discounting versus nominal in this case? In the grade report for Fall 2018 Q23 Part b, omitted accounting basis, or discounting is not listed. Does that mean it would not have been accepted as a correct answer if it were to be listed as an omission?
Or is accounting basis simply SAP?
The straightforward answer to your question is that "accounting basis" generally refers to SAP versus GAAP. This is mentioned in a sidebar in section 3.2 of the COPLFR reading and the paragraphs given in the question did specify SAP. That means that "accounting basis" was not an omission. The examiner's report also said that mentioning discounting as an omission wasn't accepted. (More on that below.)
I have a few observations about this exam question:
These kinds of questions are hard to get completely right, but usually there are a few obvious errors so you can get some or most of the points. For example, it's obvious that the the Annual Statement isn't filed with the Dept. of Commerce.
In general, I would have approached this question by writing down the list of items I know must appear in the Scope section (use the DREARIERR hint) and then looking for which of those aren't mentioned in the statement of the question.
The answers to these (and other exam questions) aren't always taken verbatim from the source text but if you work your way carefully through all the old exam questions you'll get a "feel" for what is required in an answer. Since the SAO is the top-ranked reading, I highly recommend using the source text (COPLFR) in conjunction with the wiki, BattleCards, and examiner's reports during your studying.
(For most of the lower-ranked readings, you probably don't need to look at the source texts, but for the SAO material, I think you should. COPLFR is well-written but because it's 120 pages, I couldn't include every important detail in the wiki and BattleCards. The idea is for the wiki to provide a foundation. Then as you go through the old exam problems while referring to appropriate sections of the source text, you'll fill in all the details you'll need for the exam.)