Difference between revisions of "NAIC.IRIS"

Latest revision as of 11:04, 21 July 2024

Reading: “NAIC Insurance Regulatory Information System (IRIS) Ratios Manual,” 2021, Section II, Property/Casualty Ratios, pp. 5-26.

Author: NAIC (National Association of Insurance Commissioners)

Forum

BA Quick-Summary: IRIS Ratios The IRIS (Insurance Regulatory Information System) by the NAIC helps insurance regulators assess the financial health of insurance companies using a series of 13 financial ratios categorized into these groups: overall ratios profitability ratios liquidity ratios reserve ratios. Reserve ratios are particularly critical for property/casualty actuaries and include tests for one-year and two-year reserve development, as well as estimated current reserve deficiencies. These ratios are not analyzed in isolation but are used alongside other financial data to identify insurers that may need further regulatory scrutiny, with unusual values indicating a need for additional analysis rather than immediate concern.

Pop Quiz

Note: For the multiple choice Pop Quiz, please refer only to the first Battle Card in the quiz below. It is for general review once you've studied the IRIS Ratios reading.

Multiple Choice (mini BattleQuiz 1) ← for general review of topic

Study Tips

The CAS syllabus citation for this article is confusing because it's always listed as a NEW. Most years, the only thing that changes is the publication date; the content of the article generally does not. Recent changes are as follows:

Update for 2019.Fall exam: The acceptable range for IRIS ratio 6 has changed. The range was lowered by 1 point to 2.0% → 5.5%. Very important!!
Update for 2020.Fall exam: The formula for IRIS 4 has been modified in a very minor way and is almost certainly immaterial for calculating IRIS 4 on the exam. The calculation of unearned premiums for surplus aid now includes "Reciprocal Jurisdictions". This change is highlighted in the IRIS 4 formula.
Update for 2022.Fall exam: Branded Risk Classifications. Note that this comes from page 3 of the source text whereas the syllabus specifies pages 5-26 as the relevant material you need to study. The ambiguity is that the content in pages 5-26 reference this page 3 material so it isn't completely clear whether or not you need to know it. It's pretty easy however, so it might be worth the extra 15 minutes to study it, just in case.

IRIS stands for Insurance Regulatory Information System. It's a report card for insurance companies. If you get a bad GPA in school – you might flunk out. If an insurer gets bad IRIS ratios, they may go insolvent. Both outcomes suck. You only have to know section 2 from this reading (pages 5-26), which covers the 13 P&C IRIS ratios.

The "Infinite Calculation Problems" in the quizzes provide an infinite number of randomly generated problems for calculating IRIS ratios. Practice them relentlessly until you get them consistently correct. You have to memorize the formulas for the 13 IRIS ratios, and the acceptable range for each ratio. (The acceptable range is the insurance version of the pass mark for an actuarial exam.)

Everything you need to know about IRIS ratios is in the NAIC reading. The IRIS chapter in Odomirok had only 1 thing that wasn't in the NAIC reading but that topic has been deleted. (The topic was the Analyst Team of financial examiners from the 4 geographic regions of the U.S., just in case you wanted to know!)

Estimated Study Time: several days (not including subsequent review time)

Source Readings: BattleActs includes all material from past exams in at least 1 of the elements of the system: wiki articles, BattleCards, BattleTables. It also covers significant material that has not appeared on past exams but that I've judged to be important. Still, it's a good idea to spend a portion of your time reviewing the source readings. You may have a different opinion on what's important and what you can skip. You cannot read all 2,500 pages in depth, but BattleActs give you the necessary background knowledge so that the time you do spend on the source readings will be much more efficient. For a little more on this click on Using the Source Material.

BattleTable

We have compiled previous exam questions in a table. You can use this to easily see which topics are tested most frequently.

Based on past exams, the main things you need to know (in rough order of importance) are:

IRIS 1,2,3,4 (overall ratios)
IRIS 11,12,13 (reserve ratios)
evaluating financial health using IRIS (and possibly other financial statement information)
rarely asked: IRIS 5,6 (profitability ratios)
rarely asked: IRIS 9,10 (liquidity ratios)
very rarely asked: IRIS 7,8 (profitability ratios)
Branded Risk Classifications ← This topic was inserted into the IRIS material after the CAS stopped publishing exams so there are no exam questions that cover this.

Questions held out from Fall 2019 exam: #17, 18. (Skip these now to have a fresh exam to practice on later. For links to these questions, see Exam Summaries.)

reference	part (a)	part (b)	part (c)	part (d)
E (2019.Spring #10)	Odomirok.8-9-IS	IRIS 9	liquidity information: - identify schedules/exhibits
E (2019.Spring #14)	IRIS 10 - calc & financial health	IRIS 11 - calc & financial health	IRIS 12 - calc & financial health	IRIS 13 - calc & financial health
E (2018.Fall #16)	IRIS 7 ² ← never asked before
E (2018.Fall #17)	IRIS 13	reserve adequacy: - concerns
E (2018.Fall #18)	Odomirok.19-RBC	Odomirok.19-RBC	IRIS 1,2: - financial health
E (2018.Spring #15)	IRIS 5 - using IEE ^{1, 1a}	financial health
E (2018.Spring #16)	IRIS 4 ^4a	IRIS 1,2 ^4b	financial health
E (2017.Fall #15)	IRIS 2	IRIS 4	IRIS 11	IRIS 11 - insolvency impact
E (2017.Fall #16)	financial health	financial health
E (2017.Spring #12)	(non-IRIS): net income - see Odomirok.8-9-IS	IRIS 1,2,3 - B/S strength	(non-IRIS): reinsurance - see Odomirok.10-Notes	(non-IRIS): reinsurance - see Odomirok.14-F
E (2017.Spring #17)	IRIS 1,2,3	IRIS 2 - improvement
E (2017.Spring #18)	IRIS 4	IRIS 4 - adjustment	IRIS 4 - importance
E (2016.Fall #15)	IRIS 13	IRIS 13 - distortion	financial health
E (2016.Spring #16)	IRIS 13	IRIS 11,12
E (2016.Spring #17)	IRIS 5	IRIS 5 - purpose	IRIS 6 ³
E (2015.Spring #16)	IRIS 11	IRIS 12	IRIS 13	(d) interpret IRIS (e) solvency tools
E (2014.Fall #12)	(non-IRIS): surplus - see Odomirok.8-9-IS	IRIS 2,4 ⁵	(non-IRIS): disclosures - see Odomirok.10-Notes
E (2014.Fall #17)	IRIS 1,2,3	IRIS 1 - concepts	IRIS 2 - concepts	IRIS 3 - concepts
E (2014.Spring #14)	(non-IRIS): B/S errors - see Odomirok.6-7-BS	(non-IRIS): A/L/surplus - see Odomirok.6-7-BS	IRIS 2
E (2014.Spring #19)	IRIS 4	IRIS 4 - analysis	IRIS 4 - adjustment
E (2013.Fall #6)	financial health
E (2012.Fall #20)	(non-IRIS): RBC - see Odomirok.19-RBC	IRIS 3	IRIS 3 - versus RBC
E (2012.Fall #21)	IRIS 5	financial health

¹ This problem requires material from Odomirok.18-IEE on the Insurance Expense Exhibit, which you may not have covered yet. Still, it's a good idea to at least take a quick look at the solution in the examiner's report. Even if you haven't yet studied the Insurance Expense Exhibit, you could still take an educated guess on this problem based on general knowledge. Never underestimate the potential for getting partial credit!

^1a The given information in this problem should have provided realized capital gains so that it could be subtracted from (investment income gain attributable to insurance transactions) + (Investment income attributable to capital and surplus) to get investment income earned. Since it was not provided however, you can't subtract it.

² There is a long forum thread about this problem. You will need to cover Odomirok Chapter 9 before you can solve this IRIS ratio problem. When you do, you can come back to study the following pdf. This shows how to make the calculation fit into the format of 2017.Fall #10. That problem is not an IRIS ratio problem but it involves very similar income statement calculations. 2018.Fall #16 (change in surplus calculation) Also, note that in sample answer 1 from the examiner's report, the line Div to SH is shown as 105, but this value is actually subtracted to get the total of -108.

³ The examiner's report answer is outdated because in the 2018 edition of the IRIS publication, the acceptable range for IRIS 6 was lowered to 2.0% → 5.5%. The calculation is unchanged.

^4a The given information for calculating IRIS 4 is ambiguous is 2 ways: [1] You aren't told whether the UEPR is for affiliates or non-affiliates. This examiner's report provides 5 different ways of doing the problem that's consistent with the given information. [2] You also aren't told that the UEPR is ceded UEPR but you had to make that assumption to do the problem. (Surplus aid uses ceded UEPR.)

^4b The sample answers for part (b) are reversed. If IRIS 4 is usual then you do not remove surplus aid calculating IRIS 1 & 2. And conversely if IRIS 4 is unusual then you do remove surplus aid for IRIS 1 & 2.

⁵ See 2014.Fall #12b in the forum for a solution to part (b) of this problem in calculating IRIS 4.

Full BattleQuiz

Forum

In Plain English!

Intro

There is a short comment in the source text explaining how IRIS ratios should be rounded: (

All IRIS ratios are reported as percentages, rounded to the nearest percent. For the Investment Yield ratio, results are rounded to the nearest tenth of one percent. Note however, that the examiner's reports are inconsistent in following this rounding convention and the solutions provided in this article generally carry more decimals than are strictly required.

In the summary at the top of the page, I said the IRIS ratios are a report card for the insurer, and that bad IRIS ratios may indicate potential insolvency. Last night, Alice the Actuary sat down with a report that listed the IRIS ratios for all 37 insurance companies in her state.

WTF is she going to do with all raw information?!!

Well, she wants to use that information to best allocate the resources of the state insurance department. The insurance companies with the crappiest IRIS ratios will get the most regulatory attention. It's like when you act up in class and the teacher starts keeping an eye on you. Not good!

Alice has organized the important information into the tables below. Eventually, you'll have to memorize all this. Ugh!!. But for now, just keep it handy for doing the practice template in the BattleCards. Once you get good at those easy problems, use mini BattleQuiz #2 to access old exam problems.

The NAIC reading is very well organized. If you have time, it's good bedtime reading to go over their descriptions of how to interpret the different ratios. (I don't think you'd miss much if you didn't look at it though. And given the time constraints in studying for this exam, I think you can get virtually all of what you need in this wiki article and by doing the old exam problems. I just like to point out when someone has done a good job writing an article, and the NAIC did a very good job here!)

Note: This reading was recently updated to include something called Branded Risk Classifications. I think you can cover this in about 15 minutes. You can click the link for more information, but it might make more sense once you've covered the rest of the material below.

The 13 IRIS ratios have been divided into 4 categories:

overall ratios: IRIS 1-4

profitability ratios: IRIS 5-8

liquidity ratios: IRIS 9-10

reserve ratios: IRIS 11-13

Some of the formulas have terms that are too complicated to put into the small space in the table below.

These more complicated terms are indicated by a brown font in the tables.
Click F in the tables below to link directly to the formula in the NAIC IRIS source reading.

Overall Ratios (1,2,3,4)

IRIS ratios 1-4 are pretty easy to calculate. The only hard piece is calculating the surplus aid in IRIS 4.

OVERALL Ratios	Usual Range ^{see note below}	Formula	Interpretation	Details
IRIS 1 F	≤ 900%	GWP / surplus	high → more risk in relation to surplus	- surplus is a cushion for absorbing losses - IRIS 1 measures adequacy of cushion (IGNORING ceded premiums)
IRIS 2 F	≤ 300%	NWP / surplus	high → more risk in relation to surplus	- IRIS 2 measures adequacy of cushion (NET of ceded premiums) - do you see why the 'unusual range' ratio is lower than for IRIS 1?
IRIS 3 F	[-33%, 33%]	chg(NWP) / (prior year NWP)	high (or low) → potential lack of stability in operations	- familiarity with insurer is totes helpful in interpreting IRIS 3 - high ratio could also mean less strict U/W or writing a new line
IRIS 4 F	< 15%	(surplus aid) / surplus	high → policyholder's surplus may be inadequate	- the formula for surplus aid is a mofo of a formula! - must recalc IRIS 1,2,7,10,13 (with surplus aid removed from surplus) if IRIS 4 is unusual

^note Prior versions of the IRIS Ratios source text provided unusual ranges IRIS ratios 1,2,3,4. In the most recent version, this was reversed and the source text now provides usual ranges, which is now consistent with how the acceptable ranges for the other ratios are presented.

mini BattleQuiz 1

Profitability Ratios (5,6,7,8)

IRIS ratios 5-8 are harder to calculate. The parts of the formulas that have more pieces are indicated in brown. You have to click the link in the first column of the table to bring up the source text with the full formula. Note also that I've used the following abbreviations in the formulas:

IRIS 5:

IIR: Investment Income Ratio

IRIS 6:

NII: Net Investment Income

Note: Some IRIS ratios have specific names, like IRIS 5 (2-yr Overall Operating Ratio), or IRIS 6 (Investment Yield). Others don't, like IRIS 7 & 8.

PROFITABILITY Ratios	Usual Range	Formula	Interpretation	Details
IRIS 5 F	< 100%	2-yr Operating Ratio = 2-yr Loss Ratio + 2-yr Exp. Ratio – 2-yr IIR *	low → better operating profit	- the Loss Ratio term includes dividends (see practice template) - IRIS 11 (1-yr reserve development) & IRIS 13 (reserve deficiency) are closely related to IRIS 5 - must recalc IRIS 5 if IRIS 11 outside usual range (first eliminate prior year development)
IRIS 6 F	(2%, 5.5%) see ¹ below	Investment Yield = 2 x (NII earned) / denominator	low → multiple potential causes high → not necessarily good	cause #1 for low: speculative instruments providing capital gain but no interim income cause #1 for high: high-risk instruments (may leverage surplus unduly)
IRIS 7 F	(-10%, 50%)	chg(surplus) / (prior yr surplus)	low → dangerous surplus decrease high → possible insolvency	cause #1 for low: decrease in net income comment on high: insurers often have increase in surplus before insolvency
IRIS 8 F	(-10%, 25%)	adjusted surplus / (prior yr surplus)	low (high) → deterioration (improvement) in financial condition due to operations	similar comments to IRIS 7

* IIR is Investment Income Ratio

¹ The acceptable range for this ratio changed from the 2018 edition. (Previously, the range was 3.0% → 6.5%, but the NEW range was lowered by 1 point to 2.0% → 5.5%)

mini BattleQuiz 2

Liquidity Ratios (9,10)

LIQUIDITY Ratios	Usual Range	Formula	Interpretation	Details
IRIS 9 F	< 100%	(adjusted liabilities) / (liquid assets) ^*	high → trouble meeting short-term obligations	- insolvent insurers often have high ratios prior to insolvency - consider trend over prior years
IRIS 10 F	< 40%	(gross agents’ balances in collection) / surplus	high → agents may be slow in paying	- balances > 90 days overdue may need to be removed from admitted assets

^* (liquid assets) = Bonds + Stocks + (Cash, Cash Equivalents, & Short-Term Investments) + (Receivable for Securities) + (Investment Income Due & Accrued) – (Investments in Parent, Subsidiaries, & Affiliates)

mini BattleQuiz 3

Reserve Ratios (11,12,13)

RESERVE Ratios	Usual Range	Formula	Interpretation	Details
IRIS 11 F	< 20%	(1-yr loss reserve development) / (surplus: prior year)	positive → reserve deficiency negative → reserve redundancy	isolate LOB/AY using Sched P, Part 2
IRIS 12 F	< 20%	(2-yr loss reserve development) / (surplus: 2nd prior year)	positive → reserve deficiency negative → reserve redundancy	isolate LOB/AY using Sched P, Part 2
IRIS 13 F	< 25%	[estimated reserve deficiency (redundancy)] / surplus	positive → reserve deficiency negative → reserve redundancy	- affected by changes in mix, premium volume - good test for correction of reserve deficiencies

mini BattleQuiz 4

Difference between revisions of "NAIC.IRIS"

Latest revision as of 11:04, 21 July 2024

Contents

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Study Tips

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In Plain English!

Intro

Overall Ratios (1,2,3,4)

Profitability Ratios (5,6,7,8)

Liquidity Ratios (9,10)

Reserve Ratios (11,12,13)

More Old Exam Problems

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@@ Line 1: / Line 1: @@
-IRIS stands for ''Insurance Regulatory Information System''. It's a '''report card''' for insurance companies. If you get a bad GPA in school &ndash; you might flunk out. If an insurer gets bad IRIS ratios, they may go insolvent. <u>Both outcomes suck</u>. You only have to know section 2 from this reading (pages 5-26), which covers the P&C ratios. Basically, just memorize the formulas for the 13 IRIS ratios, and the acceptable range for each ratio. ''(The acceptable range is the insurer's version of the pass mark for an actuarial exam!)''
+'''Reading''': “NAIC Insurance Regulatory Information System (IRIS) Ratios Manual,” 2021, Section II, Property/Casualty Ratios, pp. 5-26.
+'''Author''': NAIC (National Association of Insurance Commissioners)
+[https://www.battleacts6us.ca/vanillaforum6us/categories/naic-iris<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>]
+{| class='wikitable' style='background-color: navajowhite;
+|-
+|| '''BA Quick-Summary''': <span style="color: green;>'''IRIS Ratios'''</span>
+The IRIS (Insurance Regulatory Information System) by the NAIC helps insurance regulators '''assess the financial health''' of insurance companies using a series of 13 financial ratios categorized into these groups:
+* overall ratios
+* profitability ratios
+* liquidity ratios
+* reserve ratios.
+'''Reserve ratios''' are particularly critical for property/casualty actuaries and include tests for one-year and two-year reserve development, as well as estimated current reserve deficiencies.
+These ratios '''are not analyzed in isolation''' but are used alongside other financial data to identify insurers that may need further regulatory scrutiny, with unusual values indicating a need for additional analysis rather than immediate concern.
+|}
 ==Pop Quiz==
+'''Note''': For the multiple choice Pop Quiz, please refer <u>only</u> to the first Battle Card in the quiz below. It is for general review once you've studied the IRIS Ratios reading.
+[https://battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=IRIS&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=1<span style="font-size: 20px; background-color: yellow; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 0px;">'''Multiple Choice (mini BattleQuiz 1)]'''</span>&nbsp;&larr; for general review of topic
+==Study Tips==
+The CAS syllabus citation for this article is confusing because it's always listed as a '''NEW'''. Most years, the only thing that changes is the publication date; the content of the article generally does not. Recent changes are as follows:
+* <span style="color: red;">'''Update for 2019.Fall exam:'''</span> ''The acceptable range for IRIS ratio 6 has '''changed'''. The range was <u>lowered</u> by 1 point to 2.0% &rarr; 5.5%.'' Very important!!
+* <span style="color: red;">'''Update for 2020.Fall exam:'''</span> The formula for IRIS 4 has been modified in a very minor way and is almost certainly immaterial for calculating IRIS 4 on the exam. The calculation of unearned premiums for surplus aid now includes ''"Reciprocal Jurisdictions"''. This change is highlighted in the ''[https://www.battleacts6us.ca/pdf/IRIS_04_v2.pdf IRIS 4 formula]''.
+* <span style="color: red;">'''Update for 2022.Fall exam:'''</span> ''[[Branded Risk Classifications]]''. Note that this comes from page 3 of the source text whereas the syllabus specifies pages 5-26 as the relevant material you need to study. The ambiguity is that the content in pages 5-26 reference this page 3 material so it isn't completely clear whether or not you need to know it. It's pretty easy however, so it might be worth the extra 15 minutes to study it, just in case.
+IRIS stands for ''Insurance Regulatory Information System''. It's a '''report card''' for insurance companies. If you get a bad GPA in school &ndash; you might flunk out. If an insurer gets bad IRIS ratios, they may go insolvent. <u>Both outcomes suck</u>. You only have to know section 2 from this reading (pages 5-26), which covers the 13 P&C IRIS ratios.
+The "Infinite Calculation Problems" in the quizzes provide an infinite number of randomly generated problems for calculating IRIS ratios. Practice them relentlessly until you get them consistently correct. You have to memorize the formulas for the 13 IRIS ratios, and the acceptable range for each ratio. ''(The acceptable range is the insurance version of the pass mark for an actuarial exam.)''
+Everything you need to know about IRIS ratios is in the NAIC reading. The ''[[Odomirok.20-IRIS | IRIS chapter in Odomirok]]'' had only 1 thing that wasn't in the NAIC reading but that topic has been deleted. ''(The topic was the <u>Analyst Team</u> of financial examiners from the 4 geographic regions of the U.S., just in case you wanted to know!)''
+'''Estimated Study Time''': several days ''(not including subsequent review time)''
+{| class="wikitable"
+|- style="background-color: lightgrey;"
+| '''Source Readings''': BattleActs includes all material from past exams in at least 1 of the elements of the system: ''wiki articles, BattleCards, BattleTables''. It also covers significant material that has <u>not</u> appeared on past exams but that I've judged to be important. Still, it's a good idea to spend a portion of your time reviewing the source readings. You may have a different opinion on what's important and what you can skip. You <u>cannot</u> read all 2,500 pages in depth, but BattleActs give you the necessary background knowledge so that the time you <u>do</u> spend on the source readings will be '''much more efficient'''. For a little more on this click on ''[[Using the Source Material]]''.
+|}
 ==BattleTable==
+We have compiled previous exam questions in a table. You can use this to easily see which topics are tested most frequently.
 Based on past exams, the '''main things''' you need to know ''(in rough order of importance)'' are:
-* IRIS 1,2,3,4 ''(overall ratios)''
+* <span style="color: green;">'''IRIS 1,2,3,4'''</span> ''(overall ratios)''
-* IRIS 11,12,13 ''(reserve ratios)''
+* <span style="color: blue;">'''IRIS 11,12,13'''</span> ''(reserve ratios)''
-* evaluating financial health using IRIS ''(and possibly other financial statement information)''
+* evaluating ''financial health'' using IRIS ''(and possibly other financial statement information)''
-* <u>''rarely asked''</u>: IRIS 5,6 ''(profitability ratios)''
+* <u>''rarely asked''</u>: <span style="color: brown;">'''IRIS 5,6'''</span> ''(profitability ratios)''
-* <u>'''''never''' asked''</u>: IRIS 7,8 ''(profitability ratios)''
+* <u>''rarely asked''</u>: IRIS 9,10 ''(liquidity ratios)''
-* <u>'''''never''' asked''</u>: IRIS 9,10 ''(liquidity ratios)''
+* <u>''very rarely asked''</u>: IRIS 7,8 ''(profitability ratios)''
+* ''[[Branded Risk Classifications]]'' &larr; ''This topic was inserted into the IRIS material <u>after</u> the CAS stopped publishing exams so there are no exam questions that cover this.''
+{| class='wikitable'
+|-
+| Questions held out from Fall 2019 exam: '''#17, 18'''. ''(Skip these now to have a fresh exam to practice on later. For links to these questions, see [[Exam Summaries]].)''
+|}
 : {| class="wikitable" style="width: 1000px;"
 |-
-! style="width: 175px;" | reference !! style="width: 175px;" | part (a) !! style="width: 175px;" | part (b) !! part (c) !! style="width: 175px;" | part (d) !! part (e)
+! 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_(2019_1-Spring)/(2019_1-Spring)_(10)_v2.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;">'''(2019.Spring #10)'''</span>
+|| [[Odomirok.8-9-IS]]
+|| '''IRIS 9'''
+|| '''liquidity information''': <br> - identify schedules/exhibits
+| style="background-color: lightgrey;" |
+|- style="border-bottom: 2px solid;"
+|| [https://www.battleacts6us.ca/pdf/Exam_(2019_1-Spring)/(2019_1-Spring)_(14)_v2.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;">'''(2019.Spring #14)'''</span>
+|| '''IRIS 10''' <br> - calc & financial health
+|| <span style="color: blue;">'''IRIS 11'''</span> <br> - calc & financial health
+|| <span style="color: blue;">'''IRIS 12'''</span> <br> - calc & financial health
+|| <span style="color: blue;">'''IRIS 13'''</span> <br> - calc & financial health
+|-
+|| [https://www.battleacts6us.ca/pdf/Exam_(2018_2-Fall)/(2018_2-Fall)_(16).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;">'''(2018.Fall #16)'''</span>
+|| '''IRIS 7''' <span style="color: red;">'''<sup>2</sup>'''</span> <span style="color: red;">&larr; never asked before</span>
+| style="background-color: lightgrey;" |
+| style="background-color: lightgrey;" |
+| style="background-color: lightgrey;" |
+|-
+|| [https://www.battleacts6us.ca/pdf/Exam_(2018_2-Fall)/(2018_2-Fall)_(17).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;">'''(2018.Fall #17)'''</span>
+|| '''IRIS 13'''
+|| '''reserve adequacy''': <br> - concerns
+| style="background-color: lightgrey;" |
+| style="background-color: lightgrey;" |
+|-
+| [https://www.battleacts6us.ca/pdf/Exam_(2018_2-Fall)/(2018_2-Fall)_(18).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;">'''(2018.Fall #18)'''</span>
+|| [[Odomirok.19-RBC]]
+|| [[Odomirok.19-RBC]]
+| '''IRIS 1,2''': <br> - financial health
+| style="background-color: lightgrey" |
+|-
+| [https://www.battleacts6us.ca/pdf/Exam_(2018_1-Spring)/(2018_1-Spring)_(15).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;">'''(2018.Spring #15)'''</span>
+|| <span style="color: brown;">'''IRIS 5'''</span> <br> - using IEE <span style="color: red;">'''<sup>1, 1a</sup>'''</span>
+|| ''financial health''
+| style="background-color: lightgrey" |
+| style="background-color: lightgrey" |
+|- style="border-bottom: 2px solid;"
+| [https://www.battleacts6us.ca/pdf/Exam_(2018_1-Spring)/(2018_1-Spring)_(16).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;">'''(2018.Spring #16)'''</span>
+|| <span style="color: green;">'''IRIS 4'''</span> <span style="color: red;">'''<sup>4a</sup>'''</span>
+|| <span style="color: green;">'''IRIS 1,2'''</span> <span style="color: red;">'''<sup>4b</sup>'''</span>
+|| ''financial health''
+| style="background-color: lightgrey" |
 |-
 | [https://www.battleacts6us.ca/pdf/Exam_(2017_2-Fall)/(2017_2-Fall)_(15).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.Fall #15)'''</span>
-|| IRIS 2
+|| <span style="color: green;">'''IRIS 2'''</span>
-|| IRIS 4
+|| <span style="color: green;">'''IRIS 4'''</span>
-|| IRIS 11
+|| <span style="color: blue;">'''IRIS 11'''</span>
-|| impact of insolvency on IRIS 11
+|| <span style="color: blue;">'''IRIS 11'''</span> <br> - insolvency impact
-||
 |-
 | [https://www.battleacts6us.ca/pdf/Exam_(2017_2-Fall)/(2017_2-Fall)_(16).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.Fall #16)'''</span>
-|| evaluate financial health
+|| ''financial health''
-|| evaluate financial health
+|| ''financial health''
-||
+| style="background-color: lightgrey" |
-||
+| style="background-color: lightgrey" |
-||
 |-
 | [https://www.battleacts6us.ca/pdf/Exam_(2017_1-Spring)/(2017_1-Spring)_(12).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 #12)'''</span>
-|| (non-IRIS): net income
+|| '''(non-IRIS)''': net income <br> - see [[Odomirok.8-9-IS]]
-|| IRIS 1,2,3: B/S strength
+|| <span style="color: green;">'''IRIS 1,2,3'''</span> <br> - B/S strength
-|| (non-IRIS): reinsurance
+|| '''(non-IRIS)''': reinsurance  <br> - see [[Odomirok.10-Notes]]
-|| (non-IRIS): Schedule F
+|| '''(non-IRIS)''': reinsurance  <br> - see [[Odomirok.14-F]]
-||
 |-
 | [https://www.battleacts6us.ca/pdf/Exam_(2017_1-Spring)/(2017_1-Spring)_(17).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 #17)'''</span>
-|| IRIS 1,2,3
+|| <span style="color: green;">'''IRIS 1,2,3'''</span>
-|| IRIS 2: how to improve it
+|| <span style="color: green;">'''IRIS 2'''</span> <br> - improvement
-||
+| style="background-color: lightgrey" |
-||
+| style="background-color: lightgrey" |
-||
-|-
+|- style="border-bottom: 2px solid;"
 | [https://www.battleacts6us.ca/pdf/Exam_(2017_1-Spring)/(2017_1-Spring)_(18).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 #18)'''</span>
-|| IRIS 4
+|| <span style="color: green;">'''IRIS 4'''</span>
-|| IRIS 4: adjustment for unusual range
+|| <span style="color: green;">'''IRIS 4'''</span> <br> - adjustment
-|| IRIS 4: importance
+|| <span style="color: green;">'''IRIS 4'''</span> <br> - importance
-||
+| style="background-color: lightgrey" |
-||
 |-
 | [https://www.battleacts6us.ca/pdf/Exam_(2016_2-Fall)/(2016_2-Fall)_(15).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;">'''(2016.Fall #15)'''</span>
-|| IRIS 13
+|| <span style="color: blue;">'''IRIS 13'''</span>
-|| IRIS 13: distortion
+|| <span style="color: blue;">'''IRIS 13'''</span> <br> - distortion
-|| evaluate financial health
+|| ''financial health''
-||
+| style="background-color: lightgrey" |
-||
 |-
 | [https://www.battleacts6us.ca/pdf/Exam_(2016_1-Spring)/(2016_1-Spring)_(16).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;">'''(2016.Spring #16)'''</span>
-|| IRIS 13
+|| <span style="color: blue;">'''IRIS 13'''</span>
-|| IRIS 11,12
+|| <span style="color: blue;">'''IRIS 11,12'''</span>
-||
+| style="background-color: lightgrey" |
-||
+| style="background-color: lightgrey" |
-||
-|-
+|- style="border-bottom: 2px solid;"
 | [https://www.battleacts6us.ca/pdf/Exam_(2016_1-Spring)/(2016_1-Spring)_(17).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;">'''(2016.Spring #17)'''</span>
-|| IRIS 5
+|| <span style="color: brown;">'''IRIS 5'''</span>
-|| IRIS 5: purpose
+|| <span style="color: brown;">'''IRIS 5'''</span> <br> - purpose
-|| IRIS 6
+|| <span style="color: brown;">'''IRIS 6'''</span> <span style="color: red;">'''<sup>3</sup>'''</span>
-||
+| style="background-color: lightgrey" |
-||
-|-
+|- style="border-bottom: 2px solid;"
 | [https://www.battleacts6us.ca/pdf/Exam_(2015_1-Spring)/(2015_1-Spring)_(16).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.Spring #16)'''</span>
-|| IRIS 11
+|| <span style="color: blue;">'''IRIS 11'''</span>
-|| IRIS 12
+|| <span style="color: blue;">'''IRIS 12'''</span>
-|| IRIS 13
+|| <span style="color: blue;">'''IRIS 13'''</span>
-|| interpret IRIS
+|| '''(d)''' interpret IRIS <br> '''(e)''' solvency tools
-|| solvency tools
 |-
 | [https://www.battleacts6us.ca/pdf/Exam_(2014_2-Fall)/(2014_2-Fall)_(12).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.Fall #12)'''</span>
-|| (non-IRIS): surplus {see also Odo.8-9? or not?}
+|| '''(non-IRIS)''': surplus <br> - see [[Odomirok.8-9-IS]]
-|| IRIS 2,4 {see also Odo.8-9? or not?}
+|| <span style="color: green;">'''IRIS 2,4'''</span> <span style="color: red;">'''<sup>5</sup>'''</span>
-|| disclosures {see also Odo.8-9? or not?}
+|| '''(non-IRIS)''': disclosures <br> - see [[Odomirok.10-Notes]]
-||
+| style="background-color: lightgrey" |
-||
 |-
 | [https://www.battleacts6us.ca/pdf/Exam_(2014_2-Fall)/(2014_2-Fall)_(17).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.Fall #17)'''</span>
-|| IRIS 1,2,3
+|| <span style="color: green;">'''IRIS 1,2,3'''</span>
-|| IRIS 1: concepts
+|| <span style="color: green;">'''IRIS 1'''</span> <br> - concepts
-|| IRIS 2: concepts
+|| <span style="color: green;">'''IRIS 2'''</span> <br> - concepts
-|| IRIS 3: concepts
+|| <span style="color: green;">'''IRIS 3'''</span> <br> - concepts
-||
 |-
 | [https://www.battleacts6us.ca/pdf/Exam_(2014_1-Spring)/(2014_1-Spring)_(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;">'''(2014.Spring #14)'''</span>
-|| (non-IRIS): B/S errors
+|| '''(non-IRIS)''': B/S errors <br> - see [[Odomirok.6-7-BS]]
-|| (non-IRIS): A/L/surplus
+|| '''(non-IRIS)''': A/L/surplus <br> - see [[Odomirok.6-7-BS]]
-|| IRIS 2
+|| <span style="color: green;">'''IRIS 2'''</span>
-||
+| style="background-color: lightgrey" |
-||
-|-
+|- style="border-bottom: 2px solid;"
 | [https://www.battleacts6us.ca/pdf/Exam_(2014_1-Spring)/(2014_1-Spring)_(19).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 #19)'''</span>
-|| IRIS 4
+|| <span style="color: green;">'''IRIS 4'''</span>
-|| IRIS 4: analysis
+|| <span style="color: green;">'''IRIS 4'''</span> <br> - analysis
-|| IRIS 4: adjustment for unusual ratios
+|| <span style="color: green;">'''IRIS 4'''</span> <br> - adjustment
-||
+| style="background-color: lightgrey" |
-||
-|-
+|- style="border-bottom: 2px solid;"
 | [https://www.battleacts6us.ca/pdf/Exam_(2013_2-Fall)/(2013_2-Fall)_(06).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 #6)'''</span>
-|| evaluate financial health
+|| ''financial health''
-||
+| style="background-color: lightgrey" |
-||
+| style="background-color: lightgrey" |
-||
+| style="background-color: lightgrey" |
-||
 |-
 | [https://www.battleacts6us.ca/pdf/Exam_(2012_2-Fall)/(2012_2-Fall)_(20).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;">'''(2012.Fall #20)'''</span>
-|| (non-IRIS): RBC
+|| '''(non-IRIS)''': RBC <br> - see [[Odomirok.19-RBC]]
-|| IRIS 3
+|| <span style="color: green;">'''IRIS 3'''</span>
-|| IRIS 3 vs RBC
+|| <span style="color: green;">'''IRIS 3'''</span> <br> - versus RBC
-||
+| style="background-color: lightgrey" |
-||
 |-
 | [https://www.battleacts6us.ca/pdf/Exam_(2012_2-Fall)/(2012_2-Fall)_(21).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;">'''(2012.Fall #21)'''</span>
-|| IRIS 5
+|| <span style="color: brown;">'''IRIS 5'''</span>
-|| evaluate financial health
+|| ''financial health''
-||
+| style="background-color: lightgrey" |
-||
+| style="background-color: lightgrey" |
-||
 |}
+: <span style="color: red;">'''<sup>1</sup>'''</span> This problem requires material from ''[[Odomirok.18-IEE]]'' on the ''Insurance Expense Exhibit'', which you may not have covered yet. Still, it's a good idea to at least take a quick look at the solution in the examiner's report. Even if you haven't yet studied the ''Insurance Expense Exhibit'', you could still take an educated guess on this problem based on general knowledge. ''Never underestimate the potential for getting partial credit!''
+: <span style="color: red;">'''<sup>1a</sup>'''</span> The given information in this problem should have provided realized capital gains so that it could be <u>subtracted</u> from '''(investment income gain attributable to insurance transactions) + (Investment income attributable to capital and surplus)''' to get '''investment income earned'''. Since it was not provided however, you can't subtract it. <span style="color: green;">
+: <span style="color: red;">'''<sup>2</sup>'''</span> There is a long ''[https://www.battleacts6us.ca/vanillaforum6us/discussion/37/fall-2018-16 forum thread]'' about this problem. You will need to cover ''[[Odomirok.8-9-IS#Surplus_.282017.Fall_.2310.29 | Odomirok Chapter 9]]'' before you can solve this IRIS ratio problem. When you do, you can come back to study the following pdf. This shows how to make the calculation fit into the format of ''2017.Fall #10''. That problem is not an IRIS ratio problem but it involves very similar income statement calculations. [https://www.battleacts6us.ca/pdf/Odomirok.Ch08_(18F.16).pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 2px; border-radius: 10px; border-color: green; padding: 1px 3px 1px 3px; margin: 0px;">'''''2018.Fall #16 (change in surplus calculation)'''''</span>] '''Also''', note that in sample answer 1 from the examiner's report, the line '''Div to SH''' is shown as 105, but this value is actually ''subtracted'' to get the total of -108. <span style='color: green;'>
+: <span style="color: red;">'''<sup>3</sup>'''</span> The examiner's report answer is outdated because in the 2018 edition of the IRIS publication, the acceptable range for IRIS 6 was <u>lowered</u> to 2.0% &rarr; 5.5%. The calculation is unchanged.
+: <span style="color: red;">'''<sup>4a</sup>'''</span> The given information for calculating IRIS 4 is ambiguous is 2 ways: '''[1]''' You aren't told whether the UEPR is for affiliates or non-affiliates. This examiner's report provides 5 different ways of doing the problem that's consistent with the given information. '''[2]''' You also aren't told that the UEPR is <u>ceded</u> UEPR but you had to make that assumption to do the problem. ''(Surplus aid uses ceded UEPR.)''
+: <span style="color: red;">'''<sup>4b</sup>'''</span> The sample answers for part (b) are reversed. If IRIS 4 is '''usual''' then you <u>do not</u> remove surplus aid calculating IRIS 1 & 2. And conversely if IRIS 4 is '''unusual''' then you <u>do</u> remove surplus aid for IRIS 1 & 2. <span style="color: green;">
+: <span style="color: red;">'''<sup>5</sup>'''</span> See ''[https://www.battleacts6us.ca/vanillaforum6us/discussion/149/2014-fall-question-12-item-b 2014.Fall #12b in the forum]'' for a solution to part (b) of this problem in calculating IRIS 4.
+[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=IRIS&section=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>
+&nbsp;&nbsp;[https://www.battleacts6us.ca/vanillaforum6us/categories/naic-iris<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>]
 ==In Plain English!==
 ===Intro===
+There is a short comment in the source text explaining how IRIS ratios should be rounded: &nbsp; (<span style='color: green;'>
+: {| class='wikitable'
+|-
+| All IRIS ratios are reported as percentages, rounded to the <u>nearest percent</u>. For the Investment Yield ratio, results are rounded to the <u>nearest tenth of one percent</u>. ''Note however, that the examiner's reports are '''inconsistent''' in following this rounding convention and the solutions provided in this article generally carry more decimals than are strictly required.''
+|}
 In the summary at the top of the page, I said the IRIS ratios are a report card for the insurer, and that bad IRIS ratios may indicate potential insolvency. Last night, Alice the Actuary sat down with a report that listed the IRIS ratios for all 37 insurance companies in her state.
@@ Line 162: / Line 274: @@
 The NAIC reading is very well organized. If you have time, it's good bedtime reading to go over their descriptions of how to interpret the different ratios. ''(I don't think you'd miss much if you didn't look at it though. And given the time constraints in studying for this exam, I think you can get virtually all of what you need in this wiki article and by doing the old exam problems. I just like to point out when someone has done a good job writing an article, and the NAIC did a very good job here!)''
+'''Note''': This reading was recently updated to include something called ''[[Branded Risk Classifications]]''. I think you can cover this in about 15 minutes. You can click the link for more information, but it might make more sense once you've covered the rest of the material below.
 {| class="wikitable"
@@ Line 181: / Line 295: @@
 * Click <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span> in the tables below to link directly to the <u>formula</u> in the NAIC IRIS source reading.
-===Overall Ratios===
+===Overall Ratios (1,2,3,4)===
 : IRIS ratios 1-4 are pretty easy to calculate. The only hard piece is calculating the ''surplus aid'' in IRIS 4.
@@ Line 188: / Line 302: @@
 |-
-! style="background-color: yellow;" | OVERALL Ratios !! <span style="color: red;">Unusual</span> Range !! Formula !! Interpretation !! Details
+! style="background-color: yellow;" | OVERALL Ratios !! <span style="color: green;">Usual</span> Range <span style="color: red;"><sup>'''see note below'''</sup></span> !! Formula !! Interpretation !! Details
 |-
-| style="text-align: center; width: 50px;" | '''IRIS 1''' [https://www.battleacts6us.ca/pdf/IRIS_01.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>] || style="color: red; text-align: center; width: 85px;"   | &ge; 900%
+| style="text-align: center; width: 50px;" | '''IRIS 1''' [https://www.battleacts6us.ca/pdf/IRIS_01.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>] || style="color: green; text-align: center; width: 85px;"   | &le; 900%
 || GWP / surplus
 || high &rarr; more risk in relation to surplus
@@ Line 197: / Line 311: @@
 |- style="background-color: ;"
-| style="text-align: center;" | '''IRIS 2''' [https://www.battleacts6us.ca/pdf/IRIS_02.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>] || style="color: red; text-align: center;"   | &ge; 300%
+| style="text-align: center;" | '''IRIS 2''' [https://www.battleacts6us.ca/pdf/IRIS_02.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>] || style="color: green; text-align: center;"   | &le; 300%
 || NWP / surplus
 || high &rarr; more risk in relation to surplus
@@ Line 203: / Line 317: @@
 |- style="background-color: ;"
-| style="text-align: center;" | '''IRIS 3''' [https://www.battleacts6us.ca/pdf/IRIS_03.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>] || style="color: red; text-align: center;"   | <span style="color: black;>''outside of''</span> (-33%, 33%)
+| style="text-align: center;" | '''IRIS 3''' [https://www.battleacts6us.ca/pdf/IRIS_03.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>] || style="color: green; text-align: center;"   |  [-33%, 33%]
 || chg(NWP) / (prior year NWP)
 || high (or low) &rarr; potential lack of stability in operations
@@ Line 209: / Line 323: @@
 |- style="background-color: ;"
-| style="text-align: center;" | '''IRIS 4''' [https://www.battleacts6us.ca/pdf/IRIS_04.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>] || style="color: red; text-align: center;"   | &ge; 15%
+| style="text-align: center;" | '''IRIS 4''' [https://www.battleacts6us.ca/pdf/IRIS_04_v2.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>] || style="color: green; text-align: center;"   | &lt; 15%
 || <span style="color: brown;">'''(surplus aid)'''</span> / surplus
 || high &rarr; policyholder's surplus may be inadequate
-|| - the formula for ''surplus aid'' is a ''mofo'' of a formula!
+|| - the formula for ''surplus aid'' is a ''mofo'' of a formula! <br> - <span style="color: red;">'''must recalc IRIS 1,2,7,10,13'''</span> ''(with surplus aid removed from surplus)'' if <u>IRIS 4</u> is unusual
 |}
-[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=IRIS&section=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>
+:: <span style="color: red;"><sup>'''note'''</sup></span> Prior versions of the IRIS Ratios source text provided <u>unusual</u> ranges IRIS ratios 1,2,3,4. In the most recent version, this was reversed and the source text now provides <u>usual</u> ranges, which is now consistent with how the acceptable ranges for the other ratios are presented.
-===Profitability Ratios===
+[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=IRIS&section=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>
-:{| class="wikitable"
+===Profitability Ratios (5,6,7,8)===
-|-
-| '''Potential Confusion:''' For <span style="color: red;">'''ratios 1-4'''</span>, you have to know the range of values that are <span style="color: red;">'''unusual'''</span> ''(bad values)'', but for <span style="color: green;">'''ratios 5-13'''</span>, it's the <u>opposite</u> - the given ranges represent the <span style="color: green;">'''usual'''</span> ''(good) values''.
-|}
-: IRIS ratios 5-8 are harder to calculate. The parts of the formulas that have more pieces are indicated in blue. You have to click the link in the first column of the table to bring up the source text with the full formula. Note also that I've used the following abbreviations in the formulas:
+: IRIS ratios 5-8 are harder to calculate. The parts of the formulas that have more pieces are indicated in <span style="color: brown;">'''brown'''</span>. You have to click the link in the first column of the table to bring up the source text with the full formula. Note also that I've used the following abbreviations in the formulas:
 :: IRIS 5:
@@ Line 233: / Line 344: @@
 ::: '''NII:''' Net Investment Income
 : '''Note:''' Some IRIS ratios have specific names, like IRIS 5 ''(2-yr Overall Operating Ratio)'', or IRIS 6 ''(Investment Yield)''. Others don't, like IRIS 7 & 8.
 :{| class="wikitable"
@@ Line 242: / Line 353: @@
 |-
 | style="text-align: center; width: 50px;" | '''IRIS 5''' [https://www.battleacts6us.ca/pdf/IRIS_05.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>] || style="color: green; text-align: center; width: 85px;"   | &lt; 100%
-|| '''2-yr Operating Ratio'''<br> &nbsp;&nbsp; = 2-yr <span style="color: brown;">'''Loss Ratio'''</span> <br> &nbsp;&nbsp; + 2-yr <span style="color: brown;">'''Expense Ratio'''</span> <span style="color: red;"> <br> &nbsp;&nbsp; &ndash; </span> 2-yr <span style="color: brown;">'''IIR'''</span>
+|| '''2-yr Operating Ratio'''<br> &nbsp;&nbsp; = 2-yr <span style="color: brown;">'''Loss Ratio'''</span> <br> &nbsp;&nbsp; + 2-yr <span style="color: brown;">'''Exp. Ratio'''</span> <span style="color: red;"> <br> &nbsp;&nbsp; &ndash; </span> 2-yr <span style="color: brown;">'''IIR''' </span><span style="color: red;">'''*'''</span>
 || low &rarr; better operating profit
-|| - IRIS 11 ''(1-yr reserve development)'' &amp; IRIS 13 ''(reserve deficiency)'' are closely related to IRIS 5<br> - <span style="color: red;">'''must recalc IRIS 5'''</span> <u>if IRIS 11</u> outside usual range ''(first eliminate prior year development)''
+|| - the <span style="color: brown;">'''Loss Ratio'''</span> term includes <u>dividends</u> ''(see practice template)'' <br> - IRIS 11 ''(1-yr reserve development)'' &amp; IRIS 13 ''(reserve deficiency)'' are closely related to IRIS 5<br> - <span style="color: red;">'''must recalc IRIS 5'''</span> <u>if IRIS 11</u> outside usual range ''(first eliminate prior year development)''
 |- style="background-color: ;"
-| style="text-align: center;" | '''IRIS 6''' [https://www.battleacts6us.ca/pdf/IRIS_06.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>] || style="color: green; text-align: center;"   | (3%, 6.5%)
+| style="text-align: center;" | '''IRIS 6''' [https://www.battleacts6us.ca/pdf/IRIS_06_v2018.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>] || style="color: green; text-align: center;"   | (2%, 5.5%) <br> <span style="color: black;">see <span style="color: red;">'''<sup>1</sup>'''</span> below</span>
 || '''Investment Yield''' <br>  &nbsp;&nbsp; = 2 x (NII earned) <br>  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; / <span style="color: brown;">'''denominator'''</span>
 || low &rarr; multiple potential causes <br> high &rarr; not necessarily good
@@ Line 254: / Line 365: @@
 |- style="background-color: ;"
 | style="text-align: center;" | '''IRIS 7''' [https://www.battleacts6us.ca/pdf/IRIS_07.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>] || style="color: green; text-align: center;"   | (-10%, 50%)
-|| chg(surplus) / surplus
+|| chg(surplus) <br> &nbsp;&nbsp;&nbsp;&nbsp;/ (prior yr surplus)
 || low &rarr; dangerous surplus decrease <br> high &rarr; possible insolvency
 || '''cause #1 for low:''' decrease in net income <br> '''comment on high:''' insurers often have increase in surplus before insolvency
@@ Line 260: / Line 371: @@
 |- style="background-color: ;"
 | style="text-align: center;" | '''IRIS 8''' [https://www.battleacts6us.ca/pdf/IRIS_08.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>] || style="color: green; text-align: center;"   | (-10%, 25%)
-|| <span style="color: brown;">'''chg(adjusted surplus)'''</span> / surplus
+|| <span style="color: brown;">'''adjusted surplus'''</span> <br> &nbsp;&nbsp;&nbsp;&nbsp;/ (prior yr surplus)
 || low (high) &rarr; deterioration (improvement) in financial condition due to operations
 || similar comments to IRIS 7
@@ Line 266: / Line 377: @@
 |}
-[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=IRIS&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=2<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 2]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.'''</span>
+: <span style="color: red;">'''*'''</span> <span style="color: brown;">'''IIR'''</span> is Investment Income Ratio
+: <span style="color: red;">'''<sup>1</sup>'''</span> The acceptable range for this ratio <u>changed</u> from the 2018 edition. ''(Previously, the range was 3.0% &rarr; 6.5%, but the NEW range was <u>lowered by 1 point</u> to 2.0% &rarr; 5.5%)''
+[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=IRIS&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=2<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 2]'''</span>
-===Liquidity Ratios===
+===Liquidity Ratios (9,10)===
 :{| class="wikitable"
@@ Line 276: / Line 390: @@
 |-
 | style="text-align: center; width: 50px;" | '''IRIS 9''' [https://www.battleacts6us.ca/pdf/IRIS_09.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>] || style="color: green; text-align: center; width: 85px;"   | &lt; 100%
-|| <span style="color: brown;">'''(adjusted liabilities)'''</span> / <span style="color: brown;">'''(liquid assets)'''</span>
+|| <span style="color: brown;">'''(adjusted liabilities)'''</span> / <span style="color: brown;">'''(liquid assets)'''</span> <span style="color: red;">'''<sup>*</sup>'''</span>
 || high &rarr; trouble meeting short-term obligations
 || - insolvent insurers often have high ratios prior to insolvency <br> - consider <u>trend</u> over prior years
@@ Line 288: / Line 402: @@
 |}
-[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=IRIS&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=3<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 3]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.'''</span>
+: <span style="color: red;">'''<sup>*</sup>'''</span> <span style="color: brown;">'''(liquid assets)'''</span> = Bonds + Stocks + (Cash, Cash Equivalents, & Short-Term Investments) + (Receivable for Securities) + (Investment Income Due & Accrued) <span style="color: red;">'''&ndash;'''</span> (Investments in Parent, Subsidiaries, & Affiliates)
+: &nbsp;&nbsp; <span style="color: green;">
+[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=IRIS&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=3<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 3]'''</span>
-===Reserve Ratios===
+===Reserve Ratios (11,12,13)===
 :{| class="wikitable"
@@ Line 303: / Line 420: @@
 |- style="background-color: ;"
-| style="text-align: center;" | '''IRIS 12''' [https://www.battleacts6us.ca/pdf/IRIS_12.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>] || style="color: green; text-align: center;"   | &lt; 20%
+| style="text-align: center;" | '''IRIS 12''' [https://www.battleacts6us.ca/pdf/IRIS_12.pdf <span style="color: white; font-size: 12px; background-color: green; border: solid; border-width: 1px; border-radius: 10px; border-color: green; padding: 2px 5px 2px 5px; margin: 0px;">'''F'''</span>]  || style="color: green; text-align: center;"   | &lt; 20%
 || (2-yr loss reserve development) / (surplus: 2nd prior year)
 || positive &rarr; reserve deficiency <br> negative &rarr; reserve redundancy
@@ Line 316: / Line 433: @@
 |}
-[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=IRIS&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=4<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 4]'''</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=NAIC&suffix=IRIS&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=4<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 4]'''</span>
-===Exam Tips===
+===More Old Exam Problems===
-# When you get to an IRIS question, take a minute and write out the formulas you'll need along with their acceptable ranges. '''Then''' start the calculations.
+{| class="wikitable" style="width: 800px;
+|-
+| '''Exam Tip''': When you get to an IRIS question, take a minute and write out the formulas you'll need along with their acceptable ranges. '''Then''' start putting the numbers into the formulas and doing the calculations.
+|}
-==BattleCodes==
+[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=IRIS&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=5<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 5]'''</span> ''(Exam problems that are <u>recent</u> but not covered in previous mini BattleQuizzes.)''
-Memorize:
+[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=IRIS&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=6<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 6]'''</span> ''(Exam problems from <u>2017</u> not covered in previous mini BattleQuizzes.)''
+[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=IRIS&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=7<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 7]'''</span> ''(Exam problems from <u>2016</u> & <u>2015</u> not covered in previous mini BattleQuizzes.)''
-Conceptual:
+[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=IRIS&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=8<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 8]'''</span> ''(Exam problems from <u>2014</u> not covered in previous mini BattleQuizzes.)''
+{| class="wikitable" style="width: 800px;
+|-
+| '''BattleActs Tip''': All old exam problems, including those from <u>2013</u> & <u>2012</u>, can be accessed through ''[https://www.battleacts6us.ca/BB_byReading.php Level 3: Custom Battles] and using <span style="color: red;">'''Optional Setting C - BattleCards of <u>lower</u> probability.'''</span>''
+|}
-Calculational:
+[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=IRIS&section=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>
-==POP QUIZ ANSWERS==
+&nbsp;&nbsp;[https://www.battleacts6us.ca/vanillaforum6us/categories/naic-iris<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>]