Practice Exam 2 #17 and #22

CK1CK1
in Practice Exam 1

I have a couple of questions on Practice Exam 2.
For Question #17d, is the question faulty? I think it is missing an actual question.
For Question #22a, I thought using the actuary's point estimate (or anything the actuary calculated) to calculate a materiality standard was not allowed. Am I confused about this? I thought the materiality standard was supposed to be independent of the actuary, so I used 18+7=25 as reserves (Losses + LAE).

Comments

  • grahamgraham
    edited April 19

    Yes, for Q17d, only the data was provided. The question should have been:

    • Estimate the URR (Uncollectible Reinsurance Reserve) using the experience-based method.

    This has been corrected.

    For Q22a:

    • The solution should have been referencing the reserves listed on the balance sheet under the LIABILITIES section in the given data (rather than the actuary's point-estimate.)

    This has been corrected. Thank you for pointing this out.

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