graham
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This was a little tricky. The second sample answer about the $100 being immaterial is probably the simplest explanation. Since the amount is immaterial, it doesn't need to be reflected in the 2017 financial statements, but rather it is reflected in …
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You're very welcome. By the way, I'm building a comprehensive multiple choice question bank for the SAO. There is a question bank for the SAO already but it only has 12 questions. Given that the new question types are upcoming for 2024 Fall, I thoug…
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That level of detail does seem to be required on the exam. Here are a few things you can take a look at... Use the link below to see a list of all past publishsed SAO exam problems. Then use cntrl-f to search the page for the word "error". This w…
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We'll fix that, thanks.
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For losses greater than 37.5 billion, the Treasury Secretary has discretionary authority to determine the amount to recoup. This means that while there is no mandatory requirement to recoup 140% of the federal outlays, the Secretary may still choose…
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Yes, just ignore that. If you can do the calculation and get the answer provided (even thought it's negative) then you'll be fine. It's the process that's important in those examples.
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Yes, the $100 billion cap is after considering the deductible and coinsurance. Once the total aggregate losses reach $100 billion, there is no further federal coverage, and insurers are not required to cover losses beyond this cap.
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Yup, I forgot to update that file. I have now done so. Thanks!
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The term "pre-tax profit" refers to the profit before income taxes are deducted, not necessarily before all types of taxes, licenses, and fees (TLF) are subtracted. The TLF in this context typically includes various operational taxes, fees, and lice…
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Yes, @AdamDougall, I took another look at this just to make sure and I think the examiners' report is incorrect when they say "ceded amount payable to reinsurer" is not an acceptable answer. I've added a footnote to the Battle Table here: * htt…
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The source text is a little confusing on this point as it seems to conflate the mean surplus over the last 2 years with the allocation of surplus to line of business for the current year. Here's a breakdown of the key points: * Mean Surplus …
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I realize this is a less than satisfying answer: Due to the volume of questions we receive in the forum and through email in the week prior to the exam, we won't be able to address edits to the cheat sheet until after the exam period. We will likely…
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Clever poem! I will link to it from the wiki. I put it in the Study Tips for Schedule P since that's the first reading in the ranking table on the annual statement: * https://battleacts6us.ca/wiki6us/Odomirok.15-P#Study_Tips
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I will take a look at that statement in the cheat sheet and get back to you.
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Ok, thanks. I've edited that to read Part 2,3,4,5: * https://battleacts6us.ca/wiki6us/Odomirok.15-P#Overview_.26_Organization_of_Schedule_P
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Yes, it is considered reasonable to provide two separate tables in the Actuarial Opinion of Solvency (AOS), one for loss reserves and another for Unearned Premium Reserves (UEPR). This approach allows for clear and distinct representation of the res…
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This question from the practice exam has now been updated. Thanks @pbolgert or pointing this out.
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It is a little confusing, especially since this topic is discussed in multiple readings. Under NRRA, there is significant regulatory authority with the home state of the insured. Here, the state has the authority to regulate the insurance placeme…
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The ceded UEPR (Unearned Premium Reserve) is used in calculating surplus aid because the quota share reinsurance agreement applies to all covered risks during its term, regardless of when the premiums were originally earned. So separating current…
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Yes, a novation with both retroactive and prospective elements can qualify for reinsurance accounting, including under run-off agreements. This is contingent on meeting specific conditions such as the complete extinguishment of the original obligati…
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Yup, that's correct.
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These problems were generated randomly so sometimes inputs are created that couldn't actually happen in the real world. I will adjust the randomization so that doesn't happen. If this type of question comes up on the exam, you shouldn't get a negati…
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Company B's ceded amount is $0 because intercompany pooling arrangements function differently from traditional reinsurance. In this setup, both companies directly assume their share of the pooled losses without additional ceding transactions between…
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It's about avoiding double counting. If you were to subtract S&S again when calculating these ratios, you'd be mistakenly assuming that the reported losses and LAE figures are gross of S&S, leading to inaccurately inflated ratios.
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"0% pooling," refers to a situation where there's no actual sharing or pooling of risks, losses, premiums, or reserves between the companies in the group. Each company within the group is handling its risks, losses, premiums, and reserves independen…
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It is not on the syllabus any longer.
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Yes, for Q17d, only the data was provided. The question should have been: * Estimate the URR (Uncollectible Reinsurance Reserve) using the experience-based method. This has been corrected. For Q22a: * The solution should have been r…
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The insights include: * Understanding of Assumed Reinsurance: Knowledge of the source and amount of assumed reinsurance provides valuable information for actuaries in assessing the reasonableness of loss and LAE reserve balances. This understan…
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Duplicate prior exam questions only appear once in quizzes. All other instances of a problem (in this case 2012-Fall-Q3a) are in the Battle Cards but do not appear in a quiz. Part (a) of this question appears on old exams 4 times but you can see fro…