graham
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This question from the practice exam has now been updated. Thanks @pbolgert or pointing this out.
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The ceded UEPR (Unearned Premium Reserve) is used in calculating surplus aid because the quota share reinsurance agreement applies to all covered risks during its term, regardless of when the premiums were originally earned. So separating current…
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Yes, a novation with both retroactive and prospective elements can qualify for reinsurance accounting, including under run-off agreements. This is contingent on meeting specific conditions such as the complete extinguishment of the original obligati…
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Yup, that's correct.
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These problems were generated randomly so sometimes inputs are created that couldn't actually happen in the real world. I will adjust the randomization so that doesn't happen. If this type of question comes up on the exam, you shouldn't get a negati…
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Company B's ceded amount is $0 because intercompany pooling arrangements function differently from traditional reinsurance. In this setup, both companies directly assume their share of the pooled losses without additional ceding transactions between…
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It's about avoiding double counting. If you were to subtract S&S again when calculating these ratios, you'd be mistakenly assuming that the reported losses and LAE figures are gross of S&S, leading to inaccurately inflated ratios.
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"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 independen…
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It is not on the syllabus any longer.
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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 r…
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The insights include: * Understanding of Assumed Reinsurance: Knowledge of the source and amount of assumed reinsurance provides valuable information for actuaries in assessing the reasonableness of loss and LAE reserve balances. This understan…
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Your understanding that loss reserves are generally undiscounted for statutory and GAAP reporting, with exceptions like commutation pricing and taxable income calculations where discounting is applied, is correct. However, it's also crucial to recog…
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The cheat sheet has been edited so you can download it again to get the latest version.
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We'll edit the cheat sheet to make that clearer. Thanks.
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I have inserted a footnote below the Battle Table for this question here: * https://battleacts6us.ca/wiki6us/Odomirok.14-F#BattleTable I have also marked part (a) outdated in the BattleCards.
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According to section 5.2.2 of the COPLFR reading: * "...the materiality standard in Exhibit B, Item 5 and the RMAD conclusion in Exhibit B, Item 6 should pertain to the net reserves It goes on to say: * If the Appointed Actuary reaches…
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If this comes up on the exam, I would write, "According to ASOP 36, intended users should be listed the identification section."
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Well, they should accept either on the exam because they are algebraically equivalent. But just in case the grader looks at it and is thrown off (after grading hundreds of other exams!) it might be better to write it out in the standard way.
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Thanks, we will edit this let you know when it has been reposted. (So you'll need to download it again to get the corrected version.)
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Your alternative way of thinking about it does seem more intuitive, as it directly compares the difference between the recorded reserves and the actuary's high end range to the materiality standard. By framing it this way, you focus on the actual su…
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It looks like you are calculating: * materiality standard = (top end of reasonable range) - (carried reserves) I don't think that would be acceptable because then there would NEVER be risk of material adverse deviation. This is because we w…
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This is discussed in the ASOP.36 wiki article under the heading: One Small Point: * https://battleacts6us.ca/wiki6us/ASOP.36#OneSmallPoint
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I think the answer to whether it could instead be disclosed in the scope section is no. The Scope section and the Relevant Comments section serve different purposes in the Statement of Actuarial Opinion (SAO). The Scope section mainly identifies …
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Well, you will definitely get this question right on the exam!
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The details aren't specifically addressed in the Odomirok source text in chapters 22/23 but my assumption is that while the gain does indeed go into other income, it doesn't alter the regular surplus because it's earmarked within the special surplus.
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Chapter 18 of the Odomirok text (Insurance Expense Exhibit) doesn't specifically address the item "reserve for rate credits..." Chapter18 focuses on the allocation of expenses and profits rather than the classification and reporting of reserves. …
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I can see the logic in what you're saying but the treatment of URR in this context is not discussed in chapter 22/23 of the Odomirok text, nor is it specifically discussed in the new reading from the AAA on URR. If you get an exam question where …