Difference between revisions of "Porter.Reg-2"
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| + | This syllabus reading is actually from Porter Chapter 12, ''Insolvency Regulation (12.12 - 12.17)''. It covers details of guaranty funds. | ||
| + | |||
| + | The CAS syllabus lists pages ''12.12-12.17'' as a separate syllabus entry under the topic of ''Government & Industry Programs''. The other pages from Porter Chapter 12 are covered in ''[[Porter.12-Insolvency]]'' and are considered part of insurance regulation. | ||
| + | |||
[https://www.battleacts6us.ca/vanillaforum6us/categories/porter-reg-2<span style="font-size: 12px; background-color: lightgrey; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 0px;">'''Forum'''</span>] | [https://www.battleacts6us.ca/vanillaforum6us/categories/porter-reg-2<span style="font-size: 12px; background-color: lightgrey; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 0px;">'''Forum'''</span>] | ||
| − | == | + | ==Study Tips== |
| + | This reading covers just 6 pages on the topic of guaranty funds. Recall that guaranty funds were introduced in ''[[Porter.12-Insolvency]]''. The wiki article is short and the old exam problems are pretty easy. You could probably get most of them right with just 30 minutes of study on this reading. | ||
==BattleTable== | ==BattleTable== | ||
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Based on past exams, the '''main things''' you need to know ''(in rough order of importance)'' are: | Based on past exams, the '''main things''' you need to know ''(in rough order of importance)'' are: | ||
| − | * | + | * <span style="color: green;">'''assessments'''</span> - ''process, alternate procedure, calculation'' |
| − | * | + | * miscellaneous facts about guaranty funds - ''purpose, operation, effectiveness, effect on statekholders,...'' |
: {| class="wikitable" style="width: 1000px;" | : {| class="wikitable" style="width: 1000px;" | ||
|- | |- | ||
| − | ! style="width: 175px;" | reference !! part (a) !! part (b) !! part (c) !! part (d) | + | ! style="width: 175px;" | reference !! style="width: 175px;" | part (a) !! style="width: 175px;" | part (b) !! style="width: 175px;" | part (c) !! part (d) |
|- | |- | ||
| [https://www.battleacts6us.ca/pdf/Exam_(2017_1-Spring)/(2017_1-Spring)_(05).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2017.Spring #5)'''</span> | | [https://www.battleacts6us.ca/pdf/Exam_(2017_1-Spring)/(2017_1-Spring)_(05).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2017.Spring #5)'''</span> | ||
| − | || | + | || '''purpose''': <br> - of guaranty funds |
| − | || | + | || <span style="color: green;">'''assessments:'''</span> <br> - most common process |
| − | || | + | || <span style="color: green;">'''assessments:'''</span> <br> - alternate procedure |
| − | || | + | | style="background-color: lightgrey;" | |
|- | |- | ||
| [https://www.battleacts6us.ca/pdf/Exam_(2015_2-Fall)/(2015_2-Fall)_(09).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2015.Fall #9)'''</span> | | [https://www.battleacts6us.ca/pdf/Exam_(2015_2-Fall)/(2015_2-Fall)_(09).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2015.Fall #9)'''</span> | ||
| − | || | + | || '''policyholder services''': <br> - method for providing |
| − | || | + | || '''insolvency challenges''': <br> - for multi-line insurer <span style="color: red;">'''<sup>2</sup>'''</span> |
| − | || | + | || '''marketing ban''': <br> - on guaranty funds |
| − | || | + | || ''[[Porter.12-Insolvency]]'' |
|- | |- | ||
| [https://www.battleacts6us.ca/pdf/Exam_(2014_1-Spring)/(2014_1-Spring)_(10).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2014.Spring #10)'''</span> | | [https://www.battleacts6us.ca/pdf/Exam_(2014_1-Spring)/(2014_1-Spring)_(10).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2014.Spring #10)'''</span> | ||
| − | || | + | || '''LOBs covered''': <br> - by guaranty funds |
| − | || | + | || <span style="color: green;">'''assessments:'''</span> <br> - calculate $-value |
| − | || | + | || '''reimbursement limits''': <br> - from guaranty funds |
| − | || | + | || '''success / failure''': <br> - of guaranty funds |
|- | |- | ||
| [https://www.battleacts6us.ca/pdf/Exam_(2013_2-Fall)/(2013_2-Fall)_(14).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2013.Fall #14)'''</span> | | [https://www.battleacts6us.ca/pdf/Exam_(2013_2-Fall)/(2013_2-Fall)_(14).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2013.Fall #14)'''</span> | ||
| − | || | + | || '''effect on stakeholders''':<br> - of guaranty funds |
| − | || | + | || '''funding''': <br> - compare approaches |
| − | || | + | | style="background-color: lightgrey;" | |
| − | || | + | | style="background-color: lightgrey;" | |
|} | |} | ||
| + | |||
| + | :: <span style="color: red;">'''<sup>2</sup>'''</span> The answer to this question about <u>national multi-LINE</u> insurers is essentially the same as a similar question about <u>multi-state</u> insurers from ''[[Porter.12-Insolvency]]''. | ||
| + | |||
[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=Porter&suffix=Reg-2§ion=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=all<span style="font-size: 20px; background-color: lightgreen; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''Full BattleQuiz]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.'''</span> | [https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=Porter&suffix=Reg-2§ion=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=all<span style="font-size: 20px; background-color: lightgreen; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''Full BattleQuiz]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.'''</span> | ||
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==In Plain English!== | ==In Plain English!== | ||
| − | [ | + | Guaranty funds were introduced in ''[[Porter.12-Insolvency]]''. The old exam problems above cover most of the other details you need to know. There are just a couple of other items you should be familiar with: |
| + | |||
| + | :{| class='wikitable' | ||
| + | |- | ||
| + | | '''Question''': describe the limitations that guaranty funds may have on reimbursements to policyholders | ||
| + | |} | ||
| + | |||
| + | :: '''LOB exclusions''': [Hint: <span style="color: red;">'''C-STORM'''</span>] | ||
| + | ::* <span style="color: red;">'''C'''</span>redit, <span style="color: red;">'''S'''</span>urplus lines, <span style="color: red;">'''T'''</span>itle, <span style="color: red;">'''O'''</span>cean marine, <span style="color: red;">'''R'''</span>einsurance, <span style="color: red;">'''M'''</span>ortgage | ||
| − | + | :: '''claims payouts and UEP refund''': have stated limits ''(except claims payouts for WC - WC has no limit)'' | |
| + | :: '''deductibles''': | ||
| + | ::* claim deductible | ||
| + | ::* policy deductible | ||
| + | ::* large net worth deductible ''(a percentage of an insurer's net worth)'' | ||
| + | :: '''trigger is required''': | ||
| + | ::* court must verify insolvency and have placed insurer in receivership | ||
| − | + | The other item concerns insurer assessments. If | |
| + | : L = insurer liabilities eligible for recovery after insolvency | ||
| + | : NWP<sub>A</sub> = NWP of insurer A ''(one of the remaining solvent insurers in state)'' | ||
| + | : NWP<sub>total</sub> = total NWP of remaining solvent insurers in state | ||
| − | + | then: | |
| + | :{| class='wikitable' | ||
| + | |- | ||
| + | | '''Formula''': assessment<sub>A</sub> = L x NWP<sub>A</sub> / NWP<sub>total</sub> | ||
| + | |} | ||
| − | + | Both the above items are covered in: | |
| − | == | + | : [https://www.battleacts6us.ca/pdf/Exam_(2014_1-Spring)/(2014_1-Spring)_(10).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2014.Spring #10ab)'''</span> |
| + | |||
| + | [https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=Porter&suffix=Reg-2§ion=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=1<span style="font-size: 20px; background-color: aqua; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''mini BattleQuiz 1]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.'''</span> | ||
| + | |||
| + | [https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=Porter&suffix=Reg-2§ion=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=all<span style="font-size: 20px; background-color: lightgreen; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''Full BattleQuiz]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.'''</span> | ||
Revision as of 20:29, 31 March 2019
This syllabus reading is actually from Porter Chapter 12, Insolvency Regulation (12.12 - 12.17). It covers details of guaranty funds.
The CAS syllabus lists pages 12.12-12.17 as a separate syllabus entry under the topic of Government & Industry Programs. The other pages from Porter Chapter 12 are covered in Porter.12-Insolvency and are considered part of insurance regulation.
Study Tips
This reading covers just 6 pages on the topic of guaranty funds. Recall that guaranty funds were introduced in Porter.12-Insolvency. The wiki article is short and the old exam problems are pretty easy. You could probably get most of them right with just 30 minutes of study on this reading.
BattleTable
Based on past exams, the main things you need to know (in rough order of importance) are:
- assessments - process, alternate procedure, calculation
- miscellaneous facts about guaranty funds - purpose, operation, effectiveness, effect on statekholders,...
reference part (a) part (b) part (c) part (d) E (2017.Spring #5) purpose:
- of guaranty fundsassessments:
- most common processassessments:
- alternate procedureE (2015.Fall #9) policyholder services:
- method for providinginsolvency challenges:
- for multi-line insurer 2marketing ban:
- on guaranty fundsPorter.12-Insolvency E (2014.Spring #10) LOBs covered:
- by guaranty fundsassessments:
- calculate $-valuereimbursement limits:
- from guaranty fundssuccess / failure:
- of guaranty fundsE (2013.Fall #14) effect on stakeholders:
- of guaranty fundsfunding:
- compare approaches
- 2 The answer to this question about national multi-LINE insurers is essentially the same as a similar question about multi-state insurers from Porter.12-Insolvency.
Full BattleQuiz You must be logged in or this will not work.
In Plain English!
Guaranty funds were introduced in Porter.12-Insolvency. The old exam problems above cover most of the other details you need to know. There are just a couple of other items you should be familiar with:
Question: describe the limitations that guaranty funds may have on reimbursements to policyholders
- LOB exclusions: [Hint: C-STORM]
- Credit, Surplus lines, Title, Ocean marine, Reinsurance, Mortgage
- LOB exclusions: [Hint: C-STORM]
- claims payouts and UEP refund: have stated limits (except claims payouts for WC - WC has no limit)
- deductibles:
- claim deductible
- policy deductible
- large net worth deductible (a percentage of an insurer's net worth)
- trigger is required:
- court must verify insolvency and have placed insurer in receivership
The other item concerns insurer assessments. If
- L = insurer liabilities eligible for recovery after insolvency
- NWPA = NWP of insurer A (one of the remaining solvent insurers in state)
- NWPtotal = total NWP of remaining solvent insurers in state
then:
Formula: assessmentA = L x NWPA / NWPtotal
Both the above items are covered in:
- E (2014.Spring #10ab)
mini BattleQuiz 1 You must be logged in or this will not work.
Full BattleQuiz You must be logged in or this will not work.
