Staff-T1
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yeah thats right
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The proof for it is in one of the older premium liability papers under IFRS4 where they calculated the AAD adjustment for premium liabilities. You can just memorise the 0.33 example since they have stated here that average paid time is in the middle…
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Page 11 is specifically talking about not having to split out the RA for the variation in amount of cash flows, and the RA for the variation in timing of cash flows. Page 20 is talking about how you have to separately disclose the total RA for LIC…
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Valuation and reserving can be used interchangeably here. A valuation actuary is a reserving actuary and vice versa
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Runoff means the insurer is no longer writing new business and is just covering claims on policies that have previously been written. You'd still have LIC on runoff
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Yup - materiality is really just tolerance to discrepancies
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You are right, but I think certain aspects of RUDI could be considered focuses depending on how it is phrased. It really depends on the examiner. I think what they were looking for is from page 8 of the stress testing paper. Intuitively it would mak…
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No, they are all outflow. They should all be included in your FCF
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Higher materiality means it takes a greater discrepancy in a number to prompt action. By this definition, company A will have a higher materiality
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It's not. It's called FCT now
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I am not sure which question you are referring to. Question 1 in the pdf above has Assets > liabilities for the whole forecast period
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Its just part of the formula for operational risk
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Question1 : Yeah that's fine Question 2: The risk adjustment is always an outflow as it is meant to protect against adverse deviation in loss experience. There is no ambiguity in the way it is applied and how it increases the liabilities
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Economic risk under IFRS4 is equivalent to financial risk under IFRS17
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Yup you are right for both cases
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I kind of view focus and consideration as the same thing
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" FCF indicates a net cash inflow but the total sum sum of FCF, acquisition costs, cash flows arising from the contract at the date of initial recognition is a net outflow. " If this happens then it would be onerous and not have a CSM. You cant have…
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I am not sure what you are asking here. Could you clarify? The usage of the three different methods of unwind will lead to a different unwinding expense. The sample discount rate file on the CIA website (Not the IFRS17 sample questions) makes this c…
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Case 1: You are not supposed to use the GMM ARC in any calculation, but rather the components that feed into the FCF calculation. A* contains the GMM ARC which is why you need to back it out. Case 3: No need to subtract A7 here. There is no GMM e…
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Yes, it is 10% of the premium received. You don't have to multiply by 25% for the 10-10 rule, since you are looking at it separately. Alternatively, the 10-10 rule is also a 1% loss cost rule. In this case you would multiply it together. The 10% lo…
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If you are not onerous then you would not have a LC. If you are not onerous, and a group of contracts are PAA eligible, then you always go with the PAA estimate
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You can use either if not specified. If specified then you have no choice ofc. LRECC = Loss Recovery Component
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You are given the GMA LRC in the second last column? the LC is given to you in the final column. The whole point of PAA is to simplify financial reporting, it's not about being more accurate. The GMA is incredibly cumbersome to calculate and repo…
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"Exit value is actually really similar, but its not a penalty but a benefit. When I exit I get a large portion of money, so its very liquid, hence its increases liquidity which decreases liquidity premium. " This is not true. The higher the value of…
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1) Yes that is correct 2) They are all saying the same thing When you recognize an expense immediately, it goes directly into P&L and you do not amortize it. You usually wouldn't do this as it will hit your bottom line quite hard and make ea…
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Its a different method of unwind - You wouldn't expect them to be the same
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For your first question, that interpretation is correct. I do not see any contradiction here. The contract boundary is the earlier of when the policy goes in force and when a contract is recognized as onerous, which could be the date of binding
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Well yes there was a decrease in the UEP and it was added to the NWP to get EP - You should take a closer look at the question again
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I think its better to have a full understanding of how to calculate the PAA estimate at time = 0, and time =/=. For example, if we are interested in the PAA estimate at time 0, are not provided UEP and the only formula we know is PAA = UEP - DAC, we…
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Non-performance risk is a financial risk since it deals with credit risk and is basically the risk that the reinsurer will default and not fulfill obligations to the primary insurer. It is clearly stated in the source that it is not part of the RA.