Required items in Exhibit A
Do you know where in the source text this is even discussed? I see a list at the beginning of the Scope section that states what exhibit A may include, but see no mention of what is actually required to be listed there. Question 21 of Spring 2019 asks what 4 items that must be included and it says it came from COPLFR text. Additionally on this question, do you know where in the source it talks about the requirements for quota-share agreements for c? I found where they discuss the requirements for a 0% pool but it does not seem to mention what is required for Quota share agreements.
Comments
Having 2 different syllabus sources for the same material is a bit confusing. I think it may have been better for the syllabus to exclude chapters 16 and 17 from Odomirok and use the COPLFR text as the definitive source for the SAO material.
Anyway, for Exhibit A, the requirements are basically just the 9 items listed in the samples of Exhibit A. (The list COPLFR provides at the beginning of the SCOPE section that lists only some of the requirements is a little confusing.)
Part (c) of that exam question was pretty hard. (Question 21 overall only had an average score of 55% so it wasn't well done in general by exam-takers on that sitting.) There was no single place in the syllabus where this exact question was answered. You had to synthesize information from multiple sources which is what made it hard.
The first 3 points of difference for "0% pool versus 100% quota-share" in the examiner's report for part (c) were:
For each of the 3 points above, there was nothing that had to be done for the 100% quota-share agreement so that likely wouldn't be specifically stated anywhere in the text. A good strategy for part (c) would be to list all the requirements for 0% intercompany pooling and then ask yourself what kinds of differences would make sense for 100% quota-share. It's one of those questions where you probably just had to take an educated guess.
Here is an excerpt from SSAP-62R that briefly discusses the collectability issue:
And in general, the Relevant Comments section always includes a comment on collectability of reinsurance.
The point about the materiality standard was a tough one to come up with (but the question only required 2 points.) To think of it, another strategy for part (c) would be to list all the requirements from the Relevant Comments section, and figure out which of them could relate to reinsurance, and then whether there would be a difference between 0% pooling and 100% quota-share.
There were also probably other acceptable answers to this question. The examiners' report is necessarily exhaustive so if you came up with some different answers, those may also have been given credit.
What does a 0% pooling mean? That it has no losses/premiums/reserves?
The examiner's report mentions that for a 0% pooling, the SAO would read similar to the lead company.
"0% pooling," refers to a situation where there's no actual sharing or pooling of risks, losses, premiums, or reserves between the companies in the group. Each company within the group is handling its risks, losses, premiums, and reserves independently, without transferring any portion of that to the other companies in the pool.