Staff - AC
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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.
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The given UEP figures are an extract from Schedule F. You can tell that they are ceded by their categories, which depict different kinds of reinsurers.
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The actual discounting procedure is not in the syllabus. Tab/nontab discounting is a bit of a blurry issue and it is relevant to multiple sections. The GAAP section links to this forum thread where we covered this ambiguity: https://battleacts…
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It is more expensive, despite the absence of advertising and commission expenses.
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Ok, your statement is correct. Pre-insolvency is in the Porter.12-Insolvency wiki, and post-insolvency is in the Porter.Reg-2 wiki. Sorry about this patchwork of notes.
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The categorization in the wiki comes straight from Odomirok page 243. Credit risk is an established risk category in risk management, distinct from asset (or market) risk. This question was probably made prior to the release of the Odomirok te…
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Your results are correct. I agree that "1M deductible" is an unusual term for reinsurance.
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Yes, in a case like part c, where the final RBC charge is needed, it should be calculated inclusive of operational risk.
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Sure, good luck.
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No, there is not an error. 2018.F.19c lists a number of GAAP differences, four of which can be selected as the answer. They did not list S&S as an option, but nevertheless, it is a GAAP difference.
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Surplus is essentially the difference of assets and as-of-date liabilities. It encompasses the full value of liabilities, not just the change in their value in the calendar-year.
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Loss-sensitive policies involve collecting additional premium, depending on the size of the loss experienced. This lowers the risk they assume. Therefore, there is a suitable reduction to R4 and R5 related to carrying this kind of policies.
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Sample 1 f part a explains these fairly clearly: Prospective Policy is purchased and effective before any of the policy has been incurred. Retro policy is purchased an effective after entire policy has been incurred. Policy with both is purchas…
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The specific answer to part b of this question is on Odomirok page 352. There is no dedicated reading for ORSA and as such, it is not a prime syllabus topic. It is mentioned only tangentially. You really just need a very general idea of what ORSA…
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WP - Chg(UEP) = EP. Follows from this. WP and EP are calendar-year concepts, whereas UEPR is cumulative. You reduce WP by the amount that you increased UEPR to get EP.
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"Events subsequent" is an acceptable answer. "Summary of significant accounting principles" is an acceptable answer, because it applies to any situation. All annual statements fill in this item with the main system used (NAIC Accounting Practices…
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Correct. Sure, good luck.
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No, it is included in admitted. It is also used in deriving provision for reinsurance, a liability.
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"Duplication" specifically refers to multiple states, which have authority over a multi-state insurer, carrying out independent reviews of that insurer. FAD and FAWG are NAIC's groups, so they don't belong in this definition of duplication.