Staff-T1
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Yup you are correct there. I have nothing to add
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When you prepay your reinsurance premium, your ISR at time 0 decreases as you have a cash outflow. Assuming your premium is 100, your ISR at time 0 decreases by 100, while you book an asset on the BS for 100 with a net impact of 0. As the reinsuranc…
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Yes that is right
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MSA.Legend is just a one-page screenshot and I'm debating whether it is worth it to do anything for it
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Yup I can confirm that gross investment income is the sum of the prior terms as per your interpretation. I'll fix the wiki
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This is because the late reporting is merely a notification of the occurrence of the underlying event. The underlying event is the adjustment of case reserves
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I wouldn't say always. If it's not material then we shouldn't reflect it in the work. If an error only affects historical figures and not projected figures then you wouldn't reflect it in the FCT report. There's no one size fit all approach here.…
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It is not an error and happens after the calculation date. But given that this is an FCT which is meant to project the financial condition of the firm out 3 years, it is meant to reflect on the entity as it will be as a result of the event. The cat…
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There is not really a concept of a "net" RA. Your risk adjustment for the ceded losses is considered in the ARC
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I'll get back to you on this
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I don't see anything related to that on page 383 of the Odomirok text. Page 383 (chapter 29) is also not on the syllabus
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You can see it is lower across the board and generally dips into the 2s in 2024-2030
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Yup you are right - Thanks for pointing it out
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A commutation means the reinsurer returns the liabilities back to the primary insurer, therefore the primary insurer will receive cash in exchange for taking back the liabilities. You'll notice the footnote mentions that the table is mislabelled
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That's right
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the average loss date for the AY is in the middle of the year. This is covered in Exam 5
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Limit is excluding the deductible. Max loss here is 1M
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If your IFRS assets >= SCR assets then no intervention is needed. I do not see anything wrong here? You haven't done the exercise
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Sorry could you be more clear what you are referring to? I do not know what sample-18 is
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The paper does not explain why this is the case. My guess is this is either because the interest rate is fixed at initial recognition or because the impact of discounting is negligible. I think the former is more likely, and that is in line with you…
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Have you read the wiki yet? These are basic MCT calculations from chapter 7
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There's a distinction here: * When you pay out a large amount, your liquidity increases as there is little residual value remaining in a policy * If you have a large BI claim with a large reserve that is pending payment, then your liquidity is…
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It is discounting the Future cash flow? FCF = Future claims * RA. The RA is just a scalar
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2100 is the expected claims amount for the unearned portion. Its not the total amount of unpaid remaining. We are dealing with LRC not LIC here so this would all be future claims and not incurred claims which is where you would use the formula you h…
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Yes you are correct
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It's almost impossible for you to get a negative LRC excl LC. I say almost because I have seen some actual internal reinsurance treaties that are structured in such a way where a negative LRC excl LC is obtained, but for normal groups of contracts y…
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The wiki is saying that the entire portfolio (or every single policy issued) is subdivided into portfolios. That is correct. You are missing out on the first part of the statement which says "All the policies"
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It basically just means that the cost of capital requires projecting future capital needs to support the associated underwriting risks and this flows in to the calculation of the RA. Projecting this cost of capital is not easy due to the numerous as…
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Pretty much yeah
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There's no such thing as a risk of non-performance for the LIC/LRC since its a liability and not an asset so there would be no credit risk. It's part of the AIC/ARC and reduces it.