Difference between revisions of "NAIC.SSAP-9"
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| + | SSAP-9 is about '''subsequent events''' - that's shit that happens after you've started your analysis so you might have to go back and change what you've done. :-( | ||
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[https://www.battleacts6us.ca/vanillaforum6us/categories/naic-ssap-9<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/naic-ssap-9<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== | ==Study Tips== | ||
| + | There was an exam question from way back in 2014. Memorize the definition of subsequent events, do the exam problem, and you're done. ''(30 minutes max on this reading)'' | ||
==BattleTable== | ==BattleTable== | ||
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[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=SSAP-9§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=NAIC&suffix=SSAP-9§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!== | ||
| + | |||
| + | It's a cold January day and Alice the Actuary is working on year-end reserves. On Jan 15, there were 2 major events: | ||
| + | |||
| + | * an ''insolvency'' pertaining to one of their reinsurers ''(reinsurer accounts for <u>material</u> portion of their reinsurance arrangements)'' | ||
| + | * an ''ice-storm'' that will have a <u>material</u> effect on future reserves | ||
| + | |||
| + | These are '''subsequent events''' because they occurred <u>after</u> the balance sheet date but <u>before</u> issuance and audit of the financial reports. The ''insolvency'' is a '''Type I''' subsequent event and the ''ice-storm'' is a '''Type II''' subsequent event. The definitions are as follows: | ||
| + | |||
| + | : '''Type I''': ''(Recognized Subsequent Event)'' provides additional evidence with respect to conditions that <u>existed</u> at the balance sheet date | ||
| + | : '''Type II''': ''(Nonrecognized Subsequent Event)'' provides evidence with respect to conditions that <u>did not exist</u> at the date of the balance sheet | ||
| + | |||
| + | Alice wasn't surprised about the reinsurer insolvency. She knew that particular reinsurer's surplus had been deteriorating over the past year. That's why it's a Type I event. The insolvency simply provided further evidence of the weak surplus that existed at the balance sheet date. This '''must be recognized''' in the financial statements. For Alice, this may mean increasing the provision for reinsurance in Schedule F. | ||
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| + | On the other hand, the ice-storm was not a foreseeable event. The storm <u>did not</u> provide further evidence of conditions at the balance sheet date. It does not have to recorded in the prior year's financial statements but it must be <u>disclosed</u> in the '''notes''' to the financial statements ''(nature of event, and financial impact if it can be estimated.)'' | ||
[https://www.battleacts6us.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=NAIC&suffix=SSAP-9§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=NAIC&suffix=SSAP-9§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 17:06, 13 March 2019
SSAP-9 is about subsequent events - that's shit that happens after you've started your analysis so you might have to go back and change what you've done. :-(
Study Tips
There was an exam question from way back in 2014. Memorize the definition of subsequent events, do the exam problem, and you're done. (30 minutes max on this reading)
BattleTable
Based on past exams, the main things you need to know (in rough order of importance) are:
reference part (a) part (b) part (c) part (d) E (2014.Fall #14)
Full BattleQuiz You must be logged in or this will not work.
In Plain English!
It's a cold January day and Alice the Actuary is working on year-end reserves. On Jan 15, there were 2 major events:
- an insolvency pertaining to one of their reinsurers (reinsurer accounts for material portion of their reinsurance arrangements)
- an ice-storm that will have a material effect on future reserves
These are subsequent events because they occurred after the balance sheet date but before issuance and audit of the financial reports. The insolvency is a Type I subsequent event and the ice-storm is a Type II subsequent event. The definitions are as follows:
- Type I: (Recognized Subsequent Event) provides additional evidence with respect to conditions that existed at the balance sheet date
- Type II: (Nonrecognized Subsequent Event) provides evidence with respect to conditions that did not exist at the date of the balance sheet
Alice wasn't surprised about the reinsurer insolvency. She knew that particular reinsurer's surplus had been deteriorating over the past year. That's why it's a Type I event. The insolvency simply provided further evidence of the weak surplus that existed at the balance sheet date. This must be recognized in the financial statements. For Alice, this may mean increasing the provision for reinsurance in Schedule F.
On the other hand, the ice-storm was not a foreseeable event. The storm did not provide further evidence of conditions at the balance sheet date. It does not have to recorded in the prior year's financial statements but it must be disclosed in the notes to the financial statements (nature of event, and financial impact if it can be estimated.)
Full BattleQuiz You must be logged in or this will not work.
