Spring 2018 #25

meowyadoinmeowyadoin
in COPLFR.SAO

Part a & b is really confusing to me. It's not mentioned in Wiki. I can't find it anywhere besides this exam. Could you let me know where I can find the orginal source where those 2 questions related? Could you please let me know how do I prepare for the exam when similar questions pop up?

Comments

  • grahamgraham

    First, do a quick review of the Study Tips section from the COPLFR.SAO wiki article:

    Part of what I mentioned there is that the wiki article gives you a framework for understanding the SAO, but you definitely need to refer to the source text extensively as you do the old exam problems. The COPLFR source text is very well organized and I didn't want to just copy the source text into the wiki. Instead, the wiki article for COPLFR conceptualizes the SAO material, provides lots of examples, and points out the topics of major importance so that when you refer to the source text, you'll know what to focus on.

    About 2018-Spring Q25a:

    This is discussed mainly in section 3.7.1 of COPLFR. But that exam question is also a "Bloom's Taxonomy" type question in that the answer is not directly provided in the source text. You have to use your knowledge of the SAO and the annual statement to come up with a reasonable explanation for why the reconciliation may not be perfect. The examiners' report listed several different acceptable answers, and there may even have been other answers that were accepted but not listed.

    About 2018-Spring Q25b:

    This is another question where you just have to "invent" a reasonable answer. It's based on general knowledge of how the reserving process works. There is a brief reference to point estimates in the source text for NAIC SSAP-5R:

    I don't think you would have been expected to memorize that statement and several of the accepted answers according to the examiners' report stated something other than what was written above anyway.

    Approaching these questions in general:

    For some questions, there isn't any specific way to prepare other than to have a good general understanding of the SAO but also reserving and pricing methods. The CAS likes to tie together different topics and have you think through a problem that might not have been specifically addressed in the source text. This is in contrast to questions where you just had to memorize a bullet point list. They have both types of questions on the exam.

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