These calculations are not in scope. From the text:
". . . As a result of actuaries’ involvement in the pricing and reserving of business, actuaries are in a position to provide input on whether a premium deficiency reserve is necessary and on the amount of the premium deficiency reserve. The analytical approach for this is beyond the scope of this publication, but there are other resources available that provide direction. . . ."
Only minimal calculation (that to derive loss ratios) was needed to answer the question. And it seems they accepted answers giving all three possibilities.
Comments
These calculations are not in scope. From the text:
". . . As a result of actuaries’ involvement in the pricing and reserving of business, actuaries are in a position to provide input on whether a premium deficiency reserve is necessary and on the amount of the premium deficiency reserve. The analytical approach for this is beyond the scope of this publication, but there are other resources available that provide direction. . . ."
Only minimal calculation (that to derive loss ratios) was needed to answer the question. And it seems they accepted answers giving all three possibilities.
Sorry. Turns out despite that quote, there actually is an example of PDR calculation in the text. It's in Cpt 22-23, GAAP.
https://battleacts6us.ca/wiki6us/Odomirok.22-23-GAAP#PDR_Calculation:~:text=gain%20is%20%22earned%22.-,PDR%20Calculation,-The%20current%20edition