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+ | Both Schedule P and Schedule F are important for actuaries. Schedule P shows actuarial triangles which are central to an actuary's work in determining reserves. Schedule F is also crucial because an insurer's net reserves depend on the amount of reinsurance assumed and/or ceded. But it's also possible that Schedule F plays no role whatsoever. This would be the case if an insurer had '''no''' assumed or ceded reinsurance. That probably isn't likely, but it still feels like Schedule F is not as important as Schedule P. Indeed, the examiners seem to feel the same way because Schedule P is consistently more heavily tested than Schedule F. | ||
===2018.Spring #9 === | ===2018.Spring #9 === |
Revision as of 20:43, 19 January 2019
Contents
Pop Quiz
BattleTable
Based on past exams, the main things you need to know (in rough order of importance) are:
- reinsurance provision calculation
- Sched F solvency testing - strengths & weaknesses of using Schedule F for solvency testing
- SAO reinsurance collectability amount versus Schedule F reinsurance provision
- "Certified" category - benefits to insurers & reinsurers of this special category
reference part (a) part (b) part (c) part (d) E (2018.Spring #9) define:
- reinsurer recoverabledefine:
- reinsurer payabledefine:
- reinsurer funds helddefine:
- reinsurance provisionE (2017.Fall #14) balance sheet:
- restate to gross of reSched F solvency testing:
- strength/weaknessE (2017.Spring #14) reinsurance provision:
- calculate"Certified" category:
- benefitsreinsurance provision:
- how to improveE (2016.Fall #13) reinsurance provision:
- calculateSched F solvency testing:
- strength/weaknessE (2016.Spring #14) reinsurance provision:
- calculate"Certified" category:
- benefitsE (2015.Spring #15) reinsurance provision:
- calculatereinsurance provision:
- how to reduceSAO reins. collectability:
- vs. Sched F provisionE (2013.Fall #16) SCENARIO:
- slow-paying reinsurer?reinsurance provision:
- calculatereinsurance provision:
- calculate (unauthorized re)Sched F solvency testing:
- potential enhancmentsE (2012.Fall #19) reinsurance provision:
- calculateSAO reins. collectability:
- vs. Sched F provisionSAO reins. collectability:
- vs. Sched F provisionSched F solvency testing:
- strength/weakness
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In Plain English!
Introduction
Schedule F is all about reinsurance. When I start a new chapter, I like to orient myself by sketching out the chapter contents. According to Odomirok, Schedule F has 8 parts. (Links to Liberty Mutual's Schedule F are provided below. Spend a few minutes looking at these exhibits. You'll become more familiar with them as we work through the calculations later in this wiki article.)
link
title/topic
commentOdomirok
page range
# of PagesSchedule F – Part 1 assumed reinsurance 110-114 5 pages Schedule F – Part 2 premium portfolio reinsurance blank (for Libery Mutual) 114-114 1 pages Schedule F – Part 3 ceded reinsurance 115-121 7 pages Schedule F – Part 4 ceded reinsurance (aging) 121-122 2 pages Schedule F – Part 5 provision for unauthorized reinsurance 122-126 5 pages Schedule F – Part 6 provision for overdue authorized reinsurance blank (for Libery Mutual ) 126-128 3 pages Schedule F – Part 7 provision for overdue reinsurance blank except for totals (for Liberty Mutual) 128-131 4 pages Schedule F – Part 8 restatement of balance sheet (to identify net credit for reinsurance) blank except for totals (for Liberty Mutual) 128-138 11 pages
Both Schedule P and Schedule F are important for actuaries. Schedule P shows actuarial triangles which are central to an actuary's work in determining reserves. Schedule F is also crucial because an insurer's net reserves depend on the amount of reinsurance assumed and/or ceded. But it's also possible that Schedule F plays no role whatsoever. This would be the case if an insurer had no assumed or ceded reinsurance. That probably isn't likely, but it still feels like Schedule F is not as important as Schedule P. Indeed, the examiners seem to feel the same way because Schedule P is consistently more heavily tested than Schedule F.
2018.Spring #9
Let's look at this exam question from 2018.Spring:
- E (2018.Spring #9)
I was little surprised because they haven't asked a question like this before. Most of the old questions are calculations. Anyway, they ask you to define and classify the given financial statement quantities as assets, liabilities, or income statement items. This is a very typical question from an accounting course and if you've had an accounting course, you'll probably find it easy. Here's how I think about it:
- Money coming in (a receivable or recoverable) is good! A receivable is an asset.
- Money going out (a payable) is bad! A payable is an liability.
...finish this later...
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BattleCodes
Memorize:
Conceptual:
Calculational: