Bright Line Indicator Test - Revision history

Graham at 20:08, 1 July 2023

2023-07-01T20:08:28Z

2023-07-01T20:07:10Z

2023-07-01T20:06:43Z

2021-08-26T13:48:33Z

2020-04-10T15:12:09Z

2020-04-10T15:10:49Z

2020-04-10T15:10:05Z

2019-09-09T00:47:40Z

2019-09-09T00:47:01Z

2019-09-07T19:58:21Z

@@ Line 22: / Line 22: @@
 : Suppose the AA did not address material adverse deviation and that:
-:: '''net L & LAE reserves''' = 500 &nbsp;&nbsp;<span style="color: green;">&larr; ''from Liabilities, Surplus and Other Funds, (Line 1) + (Line 3)''</span>
+:: '''net L & LAE reserves''' = 500 &nbsp;&nbsp;<span style="color: green;">&larr; ''from Liabilities, Surplus and Other Funds, '''(Line 1) + (Line 3)'''''</span>
-:: '''TAC''' = 600
+:: '''TAC''' = 600 &nbsp;&nbsp;<span style="color: green;">&larr; ''from Five-Year Historical Data, '''Line 28'''''</span>
-:: '''ACL''' = 280
+:: '''ACL''' = 280 &nbsp;&nbsp;<span style="color: green;">&larr; ''from Five-Year Historical Data, '''Line 29'''''</span>
 : Then:

@@ Line 22: / Line 22: @@
 : Suppose the AA did not address material adverse deviation and that:
-:: '''net L & LAE reserves''' = 500 &nbsp;&nbsp;&larr; from Liabilities, Surplus and Other Funds, (Line 1) + (Line 3)
+:: '''net L & LAE reserves''' = 500 &nbsp;&nbsp;<span style="color: green;">&larr; ''from Liabilities, Surplus and Other Funds, (Line 1) + (Line 3)''</span>
 :: '''TAC''' = 600
 :: '''ACL''' = 280

@@ Line 22: / Line 22: @@
 : Suppose the AA did not address material adverse deviation and that:
-:: '''net L & LAE reserves''' = 500
+:: '''net L & LAE reserves''' = 500 &nbsp;&nbsp;&larr; from Liabilities, Surplus and Other Funds, (Line 1) + (Line 3)
 :: '''TAC''' = 600
 :: '''ACL''' = 280

@@ Line 14: / Line 14: @@
 :: IF
 ::: <span style="color: red;'>'''[1]'''</span> the AA <u>does not</u> address material adverse deviation
-::: <span style="color: red;'>'''[2]'''</span> 10% x (net L & LAE) &nbsp; > &nbsp; TAC &ndash; CAL
+::: <span style="color: red;'>'''[2]'''</span> 10% x (net L & LAE reserves) &nbsp; > &nbsp; TAC &ndash; CAL
 :: THEN
 ::: the financial analyst should pursue comments from the AA
@@ Line 22: / Line 22: @@
 : Suppose the AA did not address material adverse deviation and that:
-:: '''net L & LAE''' = 500
+:: '''net L & LAE reserves''' = 500
 :: '''TAC''' = 600
 :: '''ACL''' = 280
@@ Line 28: / Line 28: @@
 : Then:
-:: 10% x (net L & LAE) = 10% x 500 = '''50 &nbsp; > &nbsp; 40''' = (600 &ndash; 560) = (TAC &ndash; CAL) = (TAC &ndash; 2 x ACL)
+:: 10% x (net L & LAE reserves) = 10% x 500 = '''50 &nbsp; > &nbsp; 40''' = (600 &ndash; 560) = (TAC &ndash; CAL) = (TAC &ndash; 2 x ACL)
 : Therefore, the financial analyst <u>should</u> pursue comments from the AA regarding material adverse deviation.

@@ Line 4: / Line 4: @@
 * TAC = Total Adjusted Capital ''(this is an RBC concept and refers to the balance sheet capital available to a company)''
-* CAL = regulatory capital level corresponding to Company Action Level
+* ACL = regulatory capital level corresponding to Authorized Control Level
 {| class='wikitable'

@@ Line 6: / Line 6: @@
 * CAL = regulatory capital level corresponding to Company Action Level
-:{| class='wikitable'
+{| class='wikitable'
 |-
 || '''Question''': what is the <u>Bright Line Indicator Test</u>

← Older revision		Revision as of 15:10, 10 April 2020
Line 1:		Line 1:
	The '''Bright Line Indicator Test''' is mentioned in ''[[COPLFR.SAO#Step_6-B:_RMAD_.28Relevant_Comments.29 \| COPLFR.SAO - Step 6B]]'' as part of the SAO but it requires knowledge of ''[[Odomirok.19-RBC]]'', specifically ''[[Odomirok.19-RBC#Alice.27s_1st_Day_.28Intro_to_RBC.29 \| Alice's 1st Day]]''. That section will only take a few minutes to read so you should do that before proceeding.		The '''Bright Line Indicator Test''' is mentioned in ''[[COPLFR.SAO#Step_6-B:_RMAD_.28Relevant_Comments.29 \| COPLFR.SAO - Step 6B]]'' as part of the SAO but it requires knowledge of ''[[Odomirok.19-RBC]]'', specifically ''[[Odomirok.19-RBC#Alice.27s_1st_Day_.28Intro_to_RBC.29 \| Alice's 1st Day]]''. That section will only take a few minutes to read so you should do that before proceeding.
		+
		+	'''Note''':
		+
		+	* TAC = Total Adjusted Capital ''(this is an RBC concept and refers to the balance sheet capital available to a company)''
		+	* CAL = regulatory capital level corresponding to Company Action Level

	:{\| class='wikitable'		:{\| class='wikitable'

← Older revision		Revision as of 00:47, 9 September 2019
Line 1:		Line 1:
−	The '''Bright Line Indicator Test''' is ~~discussed~~ in ''[[COPLFR.SAO#Step_6-B:_RMAD_.28Relevant_Comments.29 \| COPLFR.SAO - Step 6B]]'' as part of the SAO but it requires knowledge of ''[[Odomirok.19-RBC]]'', specifically ''[[Odomirok.19-RBC#Alice.27s_1st_Day_.28Intro_to_RBC.29 \| Alice's 1st Day]]''. That section will only take a few minutes to read so you should do that before proceeding.	+	The '''Bright Line Indicator Test''' is mentioned in ''[[COPLFR.SAO#Step_6-B:_RMAD_.28Relevant_Comments.29 \| COPLFR.SAO - Step 6B]]'' as part of the SAO but it requires knowledge of ''[[Odomirok.19-RBC]]'', specifically ''[[Odomirok.19-RBC#Alice.27s_1st_Day_.28Intro_to_RBC.29 \| Alice's 1st Day]]''. That section will only take a few minutes to read so you should do that before proceeding.

	:{\| class='wikitable'		:{\| class='wikitable'