Staff - AC
About
- Username
- Staff - AC
- Joined
- Visits
- 1,403
- Last Active
- Roles
- Administrator
Comments
-
That criterion is that industry losses should be gt 5M, not insurer's losses. Yes, the 5M should be on commercial lines.
-
UEPR is the sum of UEP <= 1 year and > 1 year, the two categories given in the problem. The solution is correct.
-
Yes. AMT is no longer in force.
-
There is a chance of default in every year. Expected loss needs to be calculated for the ceded billings of every year, using the default rate particular to each year. Cumulative default rate is the prob. of the reinsurer surviving until a given y…
-
This is "over-production" in relation to risk exposure. Premium will be based on expected production. But premium is subsidized by the government. So, farmer chooses to produce an amount higher than that which he would have chosen if he had to pay u…
-
This is the Underwriting an Investment Exhibit. At some point, it started on the actual page 14. Then it shifted with additions to the AS, but this way of referring to it stayed.
-
The government subsidizes the losses and this encourages over-production.
-
Yes, these are correct.
-
It suggests to re-create this matrix n times for n number of years into the future. For example, the second year matrix will have a value for A-to-A that is the sum of the probabilities of A-to-A-to-A, A-to-B-to-A, A-to-C-to-A, etc. This is a …
-
Sure, good luck.
-
Yes, correct.
-
1) “change(discount)” is the difference of the reserve discount according to SAP and the reserve discount according to Tax. So, it needs to be added to incurred loss, which includes reserves. 2) Graham seems to have thrown UW expense into the T…
-
In Part 1, "insurance company" is the "reporting company." "Ceding company" is the "reinsured company." Here, "insurance company" is in the role of the reinsurer. Policyholders don't enter into this. In part 3, "insurance company" is both the "re…
-
Part 1 is assumed reinsurance - what the reporting company needs to pay. Part 3 is ceded reinsurance - what the reporting company needs to get paid.
-
I think this able matched probabilities with aggregate loss outcomes. So, these are not independent events, but rather the total loss outcome in each case. So, they go straight to the 10% prob, because that is the least acceptable by the test.
-
Why don't you try solving it and put it here, and I'll look at it for you.
-
Prepaid expense is commission. It is not an investment expense. It belongs in the profit calculation. The problem is old (2012) and I do not find this taking half of general expense mentioned in the Odomirok IEE text. So, I think this solution is…
-
As the Wiki points out, indemnity tabular discount is not subtracted out of PHS: https://battleacts6us.ca/wiki6us/Odomirok.19-RBC#Alice.27s_4th_Day_.28An_Exam_Problem..29:~:text=Trick%3A%20In%20the,to%20correctly%20solve%3A In this sense, the …
-
The problem specifies the terms of reinsurance reimbursement as billed and due on the day that the claimant was paid. Thus, "days overdue" means, had the reinsurer not provided reimbursement, it would have been overdue by that many days as of end of…
-
In this set-up, you would update Part 4 with the new CY's IBNR data, same as with Parts 2 and 3, remembering that the Prior row consists of as-of IBNR numbers in Part 4.
-
What Graham described above isthe change to taxable income, which is in turn the change to surplus. Since the writing of this thread, we added some more explanation on commutation pricing to the Wiki here, which you may find helpful: https://b…
-
S(CY) was meant to depict the same thing as m(S). It was meant to notate "of the IEE of CY, where the average of surplus as of end of two years is supplied." However, this does get confusing when you use CY for NEP as well, so we will discard this n…
-
The ratios considered are 11 through 13, the reserving ratios. The options offered in the answer key relate to reserving issues. Surplus aid is essentially cession commission and it is related to income. It is unlikely that it would be accepted for …
-
I don't see the Wiki having an explicit formula for mutual price. Rather, it is solved for in the solution. Your formula appears to work. Feel free to use it.
-
The second bullet of the problem gives the direct commission amount.
-
Battle Card 17 is the formula for ACL capital. Are you referring to another Battle Card?
-
Each of those bullets describes a way in which RMA reduces adverse selection. Any one of the bullets is sufficient to get full credit.
-
The actuarial soundness of ARP rates are circumstantial, but they are not subsidized. They reflect the higher level of risk. "Uniform" means they don't vary from insurer to insurer.
-
Yes, confirmed.
-
Think of that second part as a supervisory penalty for using unauthorized reinsurance, instead of authorized.