Staff-T1
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No duty to indemnify implies no duty to defend -> No duty to indemnify implies that the policy does not cover said incidents
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I wouldn't worry about that - If you check past year questions you can see that the risk factors were provided
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It is implied from the above. CSM = ARC - FCF and then the Loss RC adjusts the CSM. ARC formula is the same as LRC, just swap the signs. One person's asset is another person's liability
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If it was too simple, we would be out of our jobs!
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No, premium liabilities are no longer a thing under IFRS17. You can skip
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Where are you seeing that capital gains are excluded from the net income calculation for a)i)?
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You can reclassify a group as onerous form non-onerous, basically swapping out the CSM for a LC but you are right you wouldn't change their grouping unless there is derecognition or a contract modification
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1) For example, let's think of a property policy with 2 perils, flood and wildfire. In an additive structure, Premium = flood premium + wildfire premium In a multiplicative structure, Premium = Base PremiumFlood DifferentialFire Differential It's…
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It is 20K for each year, so the total for both years would be 40K. In your calculation however, you should only be using 20K
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The poster just wanted to calculate OCI to see if the numbers make sense. OCI includes any revenue, expenses, gains and losses that have not yet been 'realized' AOCI is just the cumulative OCI through the years, since OCI is per reporting period. T…
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Yeap! I can't find 20.30 on the latest IFRS17 P&C returns, but you can find it in the older returns: https://www.osfi-bsif.gc.ca/Eng/fi-if/rtn-rlv/fr-rf/ic-sa/pc-sam/Pages/pc1.aspx
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Yup that is how I interpreted it. I think someone from the industry told me this interesting fact~
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When you have an asset that increase in value, the difference between the price it is right now and the price you bought it as is a capital gain. If you sell the asset, it becomes a realized gain. Otherwise, it is an unrealized gain
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They are trying to reach a similar definition as the premium liabilities under IFRS4 to have more consistency with the capital requirements if what I recall is correct
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The text doesn't go into detail. It will probably just be some variation of expected loss rate * Exposure if it appears on the exam, similar to spring 2016 Q8
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You could argue as to whether risk-based pricing is affordable or not, as long as your justification makes sense imo. The reasoning in the examiner's report is something logical and makes sense. Government investment in infrastructure would reduc…
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Yeah that would work
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FCFs just means the fulfilment cash flows, or the risk adjusted, discounted, future cash flows. Your future cash flows on the LIC are the expected payments on incurred claims + recoveries, while for LRC it is the difference between premiums and expe…
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Great! We are on the same page then It is just semantic, as long as the logic is consistent, you will definitely get full marks
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I think you are right here @user1 -> If the event is not material you wouldn't have to go down the tree. The fact that you are going down the tree itself reflects that the even is material. Also, the example itself states that the change in incur…
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No, the reinsurance load is only for private reinsurance (page 18)
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A lower % is more rigorous than a higher percentage. Rigorous from an audit standpoint means the amount of accuracy needed in your Financial statements. Limiting your SUM to within 2% of Net Income is more rigorous than limiting SUM to 20% of Net In…
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For groups where a significant financing component exists, the financing component would reflect the time value of money associated with the mismatch in the timing of premium receipts and the service provided for that portion of the policy at each m…
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Yes that is right
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It's a typo which Graham will fix. It should be UEP - DAC
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yeap that's a typo - Fixed it
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It is just the multiplier prescribed by OSFI - It could be 30 or 40% if OSFI says so
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Pretty much
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Well, say you have a LC of 200, then you would immediately record a loss of 200 in your P&L statement while holding a LC of 200 on your balance sheet, which is the amortized as coverage is provided. If non-onerous, nothing goes onto the P&…
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For your GMA non-onerous, that is not right. LRC = FCF + CSM For PAA, non onerous LRC excl LC = prem receivable - earned premium - DAC or just UEP - DAC. The UEP - prems receivable portion of your LRC excl LC is not right "So for onerous contra…