graham
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To make this clearer, I added a footnote to the Battle Table that links to the updated solution in the wiki. Thanks. Here's a link to the Battle Table with the updated footnote: (then scroll down to the bottom to see the footnotes.) * https:…
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Sure, a pooling arrangement can artificially inflate the gross premiums written, thereby distorting IRIS Ratio 1 and potentially misrepresenting the insurer’s financial stability and risk exposure. Also, the policyholders’ surplus used in the den…
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The text references are confusing on this. A strict interpretation of the text is as you described where if the "reinsured portion" is fully transferred then this passes the substantially all test, even if the quota-share percentage is only 1%. B…
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Yup, here's the link to the location of the SAO example in the wiki. It's a PDF labeled as "Mr. Smith's SAO": * https://battleacts6us.ca/wiki6us/Odomirok.16-17-SAO#SAO_Example (You have to be logged in to the main part of the site for the l…
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Right, your perspective broadens as you work through the various readings. You'll begin to get a better sense of what's important what is less so as you get further along.
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About your first question where you noted: * Exhibit of Net Investment Income, line 11 = 399,000 * U&I Exhibit Part 3 line 25 column 3 = 393,000 So there is a discrepancy of 6,000. You are doing what I did when I first learned this mat…
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Oh yes! But here are a few things to consider: * This question was worth only 0.25 pts so not a big deal if you miss it. * They did give you an "out" with an easy answer. * The examiners' report seemed to imply that many candidates missed thi…
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This was a little tricky. The second sample answer about the $100 being immaterial is probably the simplest explanation. Since the amount is immaterial, it doesn't need to be reflected in the 2017 financial statements, but rather it is reflected in …
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You're very welcome. By the way, I'm building a comprehensive multiple choice question bank for the SAO. There is a question bank for the SAO already but it only has 12 questions. Given that the new question types are upcoming for 2024 Fall, I thoug…
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That level of detail does seem to be required on the exam. Here are a few things you can take a look at... Use the link below to see a list of all past publishsed SAO exam problems. Then use cntrl-f to search the page for the word "error". This w…
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We'll fix that, thanks.
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For losses greater than 37.5 billion, the Treasury Secretary has discretionary authority to determine the amount to recoup. This means that while there is no mandatory requirement to recoup 140% of the federal outlays, the Secretary may still choose…
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Yes, just ignore that. If you can do the calculation and get the answer provided (even thought it's negative) then you'll be fine. It's the process that's important in those examples.
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Yes, the $100 billion cap is after considering the deductible and coinsurance. Once the total aggregate losses reach $100 billion, there is no further federal coverage, and insurers are not required to cover losses beyond this cap.
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Yup, I forgot to update that file. I have now done so. Thanks!
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The term "pre-tax profit" refers to the profit before income taxes are deducted, not necessarily before all types of taxes, licenses, and fees (TLF) are subtracted. The TLF in this context typically includes various operational taxes, fees, and lice…
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Yes, @AdamDougall, I took another look at this just to make sure and I think the examiners' report is incorrect when they say "ceded amount payable to reinsurer" is not an acceptable answer. I've added a footnote to the Battle Table here: * htt…
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The source text is a little confusing on this point as it seems to conflate the mean surplus over the last 2 years with the allocation of surplus to line of business for the current year. Here's a breakdown of the key points: * Mean Surplus …
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I realize this is a less than satisfying answer: Due to the volume of questions we receive in the forum and through email in the week prior to the exam, we won't be able to address edits to the cheat sheet until after the exam period. We will likely…
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Clever poem! I will link to it from the wiki. I put it in the Study Tips for Schedule P since that's the first reading in the ranking table on the annual statement: * https://battleacts6us.ca/wiki6us/Odomirok.15-P#Study_Tips
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I will take a look at that statement in the cheat sheet and get back to you.
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Ok, thanks. I've edited that to read Part 2,3,4,5: * https://battleacts6us.ca/wiki6us/Odomirok.15-P#Overview_.26_Organization_of_Schedule_P
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Yes, it is considered reasonable to provide two separate tables in the Actuarial Opinion of Solvency (AOS), one for loss reserves and another for Unearned Premium Reserves (UEPR). This approach allows for clear and distinct representation of the res…
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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…