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This is tied in to the fact that private markets have a profit incentive whereas state funds mostly do not.
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In Reinsurance Facilities and Joint Underwriting Associations, loss (or profit if that is the case) is shared among voluntary market participants according to their market share by way of assessments. Assigned Insurance Plans directly assign a high-…
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See my response from Sep 2022 to a question on this issue in the link: https://battleacts6us.ca/vanillaforum6us/discussion/27/jua-and-rf#latest:~:text=I%20think%20Graham%27s,their%20face%2Dvalue. Let me know if this does not answer your questi…
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Yes, that would count as one solution, because those two mean the same thing, according to the examiner. The answer key explains that you need to give two reasons corresponding to the two bolded items. The items in italics are some alternatives to t…
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In the event that the insurer responds by tightening underwriting criteria or by exiting the market, residual markets of the state may get more insureds. That is the connection to the rest of the article.
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GAAP liability is gross of reinsurance, but GAAP also has assets for "reinsurance recoverable on unpaid loss" and "prepaid reinsurance premium" (i.e. ceded uep) that SAP does not have. So, going from SAP to GAAP surplus, no adjustment for ceded UEP …
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The answer is yes to your two questions. "Funds held under reinsurance treaties" are collateral-type funds provided by the reinsurer that the reinsured temporarily holds. They are to be eventually returned to the reinsurer, so they are considered…
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Sorry, I'm not familiar with that incident. I can maybe help you if you give me its particulars.
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A company may be both a reinsured and a reinsurer.
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Yes, but it also signifies which side of the contact concerning that amount you are. It is the business you record as being the reinsurer. "Direct" comes directly from the risk. "Assumed" comes from the insurer of the risk, where the insurer shar…
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In that specific situation, you would be counting both of the two 800's in the total recoverable. This question happened to have all claims in the current accident year, but provision for reinsurance would generally cover all relevant accident ye…
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Which question in the Full BattleQuiz do you refer to please?
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"paid in the last 90 days" refers to the amounts paid in the last 90 days of the year, i.e. during the 90 days prior to 12/31/2018. Could you explain what you mean by "2 separate amounts"?
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Yes, and because starting surplus is not given either.
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These include charges (to the policyholder) for payment of premium in installments. They are a part of "Other Income".
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Yes, "direct of reinsurance" and "gross of reinsurance" are generally used interchangeably to mean the opposite of "net of reinsurance". It means reinsurance recovery or payment is not subtracted from the item.
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"Revenue offset", change in UEP times 20%, is there to offset the acquisition cost that will subsequently be subtracted from TBEP, on the way to Tax-Basis Income (TBI). I note that the wiki does not give a place to underwriting expenses in the TB…
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Premium tax is not mentioned in any of the sample answers, for any of the parts. Premium tax is not quite related to any of the four topics discussed in the question. Could you be referring to another question?
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1) "Net realized capital gain" is a partition from total investment gain, other than the two you cite. However, the -46 that goes into the surplus calculation at the end is "change in net unrealized capital gain. 2) As "capital gain tax on net r…
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On page 244, Odomirok says: "R0 contains the risk charges associated with affiliated insurers subject to RBC (whether property/casualty, life or health), along with alien insurance affiliates. All other affiliates are subject to R2 charges." …
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Ceded reinsurance reserves are unpaid losses that the company is expecting to cede to the reinsurer. Balance Sheet liability item 1 (Losses) is stated net of reinsurance - ceded reinsurance reserve is not considered a liability. But it is not consid…
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Sure, good luck.
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Part 2, standing alone, will be useful with its 1-year and 2-year development totals. Part 5, in conjunction with Parts 2, 3 and 4, can give average case outstanding reserves, the trends in which will be indicative of reserve adequacy. These are …
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Bond valuations are covered in Odomirok.6-7-BS, and this problem is given as an example there.
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They can both be based on stocks and bonds. Here is Odomirok explaining it, on page 45: _Net investment income earned is primarily related to interest and dividends received on investment assets held over the course of the year. Net investment i…
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Yes. In the case of immediate liquidation of a company, only liquid assets can be used to pay for liabilities. This is the scenario that SAP is most concerned about.
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Policyholder dividends are in essence premium returned to policyholders by a mutual insurance company, in the event of profitability. This excess premium is understood to be policyholders' from the beginning, and not the company's to invest, so inve…
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Here is Odomirok's explanation, on page 234: The elements that go into the calculation of funds attributable to insurance transactions differ from total investable funds in two ways. First, mean policyholders’ surplus is not included in the calcu…
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Which problem in Solvency 2 do you refer to please?
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That phrase means that the RF "assesses" insurers for the pool's losses, i.e. they require payment from insurers for these losses according to their voluntary market share. Insurers don't get reimbursed for losses; RF pays losses and then assesse…