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The difference is claims having occurred versus claims being yet to occur. With the former, you are only reinsuring reserving risk. They may be trying to acknowledge this in the separate accounting treatments.
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1401 is the write-in surplus line where it goes, instead of going into line 39, Surplus.
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If they ask you to calculate the bond size charge, they may expect you to know the weighting scheme for the bond size factor.
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Provision for reinsurance is like a reserve for reinsurance that may be uncollectible. It's a liability in that sense.
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Yes, it needs to be subtracted, to stay consistent with Graham's convention in his Sep 2023 post above.
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IRIS 4 text instructs to adjust surplus specifically this way. It makes sense. You need to take out surplus aid from both the starting and the ending surplus to get a comparison excluding surplus aid.
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There is nothing special about 2017-Spring-Q20-part b. They just failed to observe the mid-year convention in their answer.
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No, that's the industry retention.
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Graham has descriptions of both pros. and retro. reins. above. What in there makes you think retro. is not really considered as a valid reinsurance? Portfolio reinsurance is distinct from retro. reins.. From Odomirok: Portfolio reinsurance is …
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That must be in error.
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The dividend-received treatment is currently not covered in the syllabus.
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Here, "payable" means payable to reinsurer, because of the question's context. This is not an official AS line item.
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The 5mil criterion of certification is for industry total loss, not insurer's.
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If you see it mentioned in that way somewhere, it s in error there.
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I think rounding is performed to determine action level.
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Yes, it is applicable to both SAP and GAAP. Once it is established that there is risk transfer, the reinsurance accounting treatment is subject to the separate rules of SAP and GAAP.
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The problem gives both the 12M as Part 4 IBNR and the information related to the new IBNR requirement. So, using either should be acceptable. The answer key gives 12M as the only choice. I don't know if they would accept the latter.
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No, these are not aligned with where they were going with this question.
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Yes, I see the discrepancy in our two statements. Here is Graham's comment on this: This is a case where official syllabus readings don't quite line up and I don't know what the graders would do. If you don't take 50%, that should probably be mar…
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I am able to speak to it only with respect to the text. I read the text above as saying that GAAP will discount under the same conditions as SAP. And the thread above deals with how SAP discounts only under special cases. This is congruent with what…
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Here is Odomirok's treatment of reserve discounting in GAAP: For U.S. GAAP, ASC 944-40-S30-1 refers to an SEC staff bulletin that indicates it is permissible to apply the same discount calculated under SAP for U.S. GAAP purposes. It also indicat…
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Correct. Sure, good luck.
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The first expression above is average case reserves. The second expression is paid-to-incurred ratio. You look at the trends in these items in the triangular setting to get a notion of reserve adequacy.
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Yes, correct. There are special techniques to triangulate AO, and they are not used in Schedule P.
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In this case, the more reasons you give, the better your chances of getting it right. But you should weigh this against the fact that it's only 0.5 points.
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No, the latest terms are used everywhere in the AS.
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This approach is explained on Odomirok page 37: Another approach that is sometimes used is called the monthly pro rata method. This method assumes that policies are written evenly over the course of the month. Based on that assumption, 1/24 of th…
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The Statement of Income arrives at the final income in Line 20. The ensuing lines make up the "Capital and Surplus Account," which is indeed a part of the Statement of Income, and they arrive at the final surplus at Line 39. This was some inexact…
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skreitzer - Deferred Premiums, Agent's Balance is Asset item 15.1. There may be some rules about portions of it being non-admitted, but it is not non-admitted altogether. jasonchw - I will get back to you on this.
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Schedule P intercompany pooling is done on the latest terms of the arrangement, regardless of when the loss happened.