Staff - AC
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Comments
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The R1 and R2 that enter into the RBC formula include ACC. That statement is there to assure that the conversion is not to affect R1.
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When there is no full release, U.S. GAAP treats the structured settlement like a reinsurance contract, thus retaining the loss reserve and establishing an equivalent reinsurance recoverable.
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This problem was written prior to the introduction of operational risk charge. They are converted to government bonds, which get zero risk charge.
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Sure, good luck.
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The process of determining a servicing carrier can vary based on the JUA’s structure and the state or jurisdiction in which it operates, but the typical methods are: * Selection by the Governing Body: The board of directors or governing body of…
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Some insurance companies, usually mutuals, offer an arrangement of returning part of their profit back to policyholders. It is like a premium rebate.
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This refers to the impairment (weakening) of the reinsurers ability to pay. It is any and all factors that causes this that are known. The new rule requires that you go beyond these, to an estimate of the ultimate uncollectible. Sort of like setting…
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Yes, but it would have to be outside the usual range.
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(2) is not based on IRIS ratios, which is what is asked. (1) does not offer an indirect way of confirming the indications of the IRIS ratios, which is what they mean by "analysis." The "analyses" can be found dispersed in the source text.
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The difference is, IRIS 5 includes investment income ratio, whereas COR does not. They are both meant to depict profitability. The COR threshold in the RBC context is 120%: they let it past 100, because investment will compensate. IRIS 5 threshol…
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The sample gives Annual Statement as an accepted answer; the schedules (P, F and others) are part of the AS. Schedule P showing 10 years is not really relevant to solvency status. They give a couple of accepted answers.
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I don't see anything being done differently in sample 2 than in sample 1. You cannot get the reserve values you need from the incurred triangle alone; you would need the paid triangle alongside, which is not given here.
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Sure, good luck.
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You get into iffy terrain when you give this as an answer. Residual risk mechanisms also recoup costs from the market, and they are considered to be insurance. I would stick with the C-MAC framework when answering this question.
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As pointed out in the BattleTable, this question part is outdated, because AMIT is no longer in use.
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b and c are related to the IEE subject. They are also interpretative questions, requiring application of overall knowledge to the particular set-up of IEE. You may not be able to find the suggested answers word for word in the source.
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Yes, prior to the creation of the DSLI Law, the primary domiciled in Illinois would not have been able to write surplus lines in the state of Illinois. It would be best to take this at its face value.
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Sure, good luck.
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Sample 2 is there to show a solution version where amounts ceded to reinsurer are 75% of total. This is because "25% quota share" is a vague term that can be interpreted either as "25% to reinsurer" or as "75% to reinsurer, and it should have been c…
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Sure, good luck.
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Although the examiner did not give this as an option, as it is found in Schedule F Part 3 Clm 25, it would have been an acceptable answer.
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Sure, good luck.
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Please provide what you are having difficulty with in the solution.
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I see that they do match.
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Schedule F Part 3 columns 38-42 clearly partition the recoverables by the number of days they are overdue. There is a column for 91-120 days, and another one for over 120 days. The confusion arises from the question makers introducing both a ">90…
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RBC is the regulatory remedy to ensure that companies hold sufficient capital. Its main purpose is to ensure insurer solvency. It puts all risk considerations of an insurer into a formula that gives the required capital, to establish standard practi…
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The formula of the solution is this: Current Surplus = Prior Surplus + Net Income + Direct Charges to Surplus The net income that you back into by supplying the other items is net income already netted of ph dividends. You don't have to subtra…
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I think this is simply a case of one solution writer using the pricing reference and the other one not doing so.
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These percentages are RBC ratios, TAC/ACL. You back into the surplus in TAC in the cases of 100% and 150%. It is laid out in the Battlecard. Let me know if there is an aspect of that calculation you don't understand.
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On your question 2, "deferred" here means "due, but not yet received." If the agents' balance is more than 90 days deferred, then it is non-admitted.