Spring 2017
I am trying to figure out the R0 & R2 portions
based on examiner report asset concentration can go to either R1 or R2 - I selected R2 for 100% of it
Other insurance Subsidiaries could go to R0, R1 or R2 - I selected R0
My calculations are
R0 = 8,000
R1 = 4,500+11,000 = 15,500 (this looks like it was an accepted number)
R2 = 8,500+500+5,500+2,000=16,500
I think the only part that I'm in disagreement with the solution is the 500 for investment in insurance affiliates - I thought that should be an Equity risk, based on the summary table for R1 & R2 (equity assets: [1] Affiliated investments).
Has something changes since Spring 2017 or am I missing something?
Comments
There is a wiki note on the changes to Odomirok that affect this exam problem:
https://battleacts6us.ca/wiki6us/Odomirok.19-RBC#Alice.27s_5th_Day_.28R0_and_Another_Exam_Problem.29
Sorry, here's that note:
https://battleacts6us.ca/wiki6us/Odomirok.19-RBC#Alice.27s_5th_Day_.28R0_and_Another_Exam_Problem.29:~:text=on%20that%20though.-,E%20(2017.Spring%20%2319),off%2Dbalance%20sheet%20or%20other%20items,-Subsidiary%20and%20affiliated
so you are saying it's an outdated answer?
Actually, these changes don't seem to affect your issue. Odomirok has "investments in affiliated insurance companies" go into R0 (p. 249), and "affiliated investments" go into R2 (p. 265). This is how the wiki has it as well. Since the given of the problem is the former, the 500 should go into R0.
can you explain what the difference is between "investments in affiliated insurance companies" and "affiliated investments"
just to point out R0 does have it in the wiki article but it may be worth putting subsidiaries/affiliates in the R0 description. I think it only state it in the comments about calculations to come in the article
Unfortunately, I'm not familiar with the distinction, so I can't add to what's already explained in Odomirok.
Should question #19 for the discounted reserves only be applicable if we state assumed medical reserves? Basically asking if not stated which reserves the tabular discounts are for is it best to state assuming medical reserves?
As per Table 98 on Odomirok page 270, the base reserves for the charge are gross of non-tabular discount. The given in the problem for tabular discount is "tabular discount in reserves," so you can assume the given Reserve is already net of tabular discount. The given does no say the non-tabular discount is "in reserves" the way it does for tabular, so you can assume the given Reserve is gross of non-tabular discount. So, you don't have to do anything with either discount amount, and therefore, you don't need to state any assumption about reserves being medical.