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This is for groups of contracts that are initially profitable (Have a CSM) and during an adverse scenario become unprofitable. Thus, their CSM is derecognized and a LC is recognized while the loss is reflected immediately in the earnings
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I think what coverages are covered by ICBC and what aren't would also be fair. I would read page 23 of the KPMG paper for mode details on that. Also, as a side note the syllabus just says that simplified guidelines for BC are excluded, not that the …
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The P&L statement after initial recognition would be something like this: Profit/Loss = Decrease/Increase (+-) in LRC - Expenses When you amortize your LC by 20 for example, your LRC will go down by 20 while expenses would increase by 20. …
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You can have CSM on your LRC as well as your ARC. In fact, there is always CSM on your ARC. Once the ARC has been completely run down and coverage gas been provided, then you would have an ARC of 0. I wouldn't call it transferring the LC but basi…
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Yes, the income statement
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* No that is not correct. You either have a CSM, or you don't. And a CSM can't be negative for insurance contracts * Correct * Only at initial recognition when FCF is negative would CSM be an offsetting positive amount. After initial recognition, …
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Nope, the CAS will only test what is stated in the syllabus regardless of whether there are newer versions of the material
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It states right next to financial condition that this is the FCT
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yes
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What do you mean by more conceptual? The formula is pretty clear -> When your DAC goes down (asset derecognized), the LRC increases and when your UEP (liability derecognized) goes down, the LRC decreases.
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No? It is just saying that you don't need to know the simplified filing guidelines -> But page 23 which is what they are referring to is completely fair game
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And did you take a look at the 20.30? If you did you will see you are missing quite a few items to arrive at the UW income
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Thank you, Andrew that is the correct answer. The coverage period lasts for two years as the last underlying contract will be written on Dec 31 xxxx, which means you are only fully done providing coverage on Dec 31 xxx + 1 which is twenty four month…
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Sorry, I don't really understand what you are trying to say in your last sentence. Could you rephrase?
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If your GMA estimate is < PAA, you wouldn't have a loss component. Only when your GMA estimate is > PAA would you need to "top-up" a LC to make the PAA estimate = GMA. The PAA is meant to be a simplification of the GMA and we are okay to use i…
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Yes that's right
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1) Because premiums receivable are similar to premiums received. They both reflect an obligation to provide coverage to the insured 2) For fixed costs, they are always the same regardless of how many policies are written. In that sense, it would ma…
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the carriers are direct insurance companies who cede to the FA
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Have you tried doing it with your provided formula?
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Nope, you have to subtract out realized gains, so the numerator would be 11,000 + 2,500 - 500
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Yes, good catch! It should be LC is released into the insurance service expense rather than from. LC is released as it is advance recognition of losses, so that advance recognition is no longer needed when service is provided.
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You are forgetting to subtract the investment expenses, but yes that is right
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Correct
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Part a) is still relevant. It comes from Page 81 of the Baer paper. Part b) is no longer relevant
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Under IFRS17, Revenue should be recognized as service is provided. For reinsurance contracts, especially for catastrophe coverages, the majority of service is provided during certain months of the year. For example, for hurricane XOL coverage, most …
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Insurance acquisition costs are not necessarily ALL part of the DAC. DAC stands for deferred acquisition costs, and you would also have non deferrable acquisition costs. UEP = Premium Received - Earned Premium.
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Why would you say non-ceded is equivalent to the net exposures? I think the wiki is correct. The calculation is based on q7 in Fall 2015
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It should be what the person above mentioned - Right now you would state the definition of a going concern 90th-95th percentile scenario and a solvency concern 95th - 99th percentile
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You could argue for it based on the fact that the incorporation of an insurer will be in the best interests of the financial system in Canada
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they are considered part of shareholder's equity for the Balance sheet but not for the MCT