adipelino
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I think since we essentially calculate the LRC excl LC, then load in the LC based on (GMA FCF - LRC excl LC), we effectively do just set it equal to the GMA estimate if onerous. But if they were to ask for LC to be explicitly calculated and we had t…
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my guess would be that since Fulfillment Cash Flows inherently takes a PV, they mean PV(Future CF)?
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Why do we determine the RA based on the % of capital released at a given point in time? I thought we would systematically decrease the total capital held by the % released and discount (total initial insurance risk capital - cumulative capital rele…
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thank you!
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@Staff-T1 would the CSM be added or subtracted in each of these? FCF = Future cash inflows - Future cash outflows + effect of discounting - RA FCF = estimate of future cash flows (=outflows - inflows) + effect of discount + RA I think it woul…
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I think because they definite the FCF as (inflows - outflows) in this formula, instead of the reverse. RA in an insurance contract issued is a 'bad' thing (adds to the liability) so it should go in the same direction as the outflows. This is how I r…
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thank you for the detailed example! I think I am just confused because the CSM exists when there's a net inflow (liability in LRC is < 0). So I thought it would be a positive liability to bring the carrying amount of the LRC to 0 at initial reco…
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thank you!
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Hi, would this adjustment of 1.03^(.5-1/3) still be relevant for Fall 2022 now that the premium liabilities paper is removed? I believe this formula [PolLiabs(UPR) = APV + FutRe + maint + contingent commissions ] is replaced by the methods to ca…
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Also, wouldn't the CSM be a + liability? If the LRC without a CSM is negative (net inflow), then adding the + liability of a CSM would make the LRC 0 and defer profit recognition
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My understanding was that the LC is implicitly included in FCF under GMA, and explicit under PAA. Hence why we take LC = {FCF under GMA - LRC excl LC under PAA} when we need to calculate the LC for PAA. Under which approach is your example? With…
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why would we reject the concept of absolute liability in BC?
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I have a follow-up question though: The source discusses how the FCF of the underlying contracts wouldn't match those from reinsurance held, because (from what I understand) we'd always calculate FCF of underlying contracts and reinsurance held co…
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the headings of 20.14 are: "LRC", "LIC not under PAA", "LIC under PAA" I thought LIC was the same under PAA/GMA and the LRC is what is different? Or do these just mean the LIC for contracts where PAA was used for LRC? Thanks!
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So the CSM (in terms of direction) would be {outflows - inflows} for reinsurance, whereas we have the opposite direction for insurance contracts. Then if the reinsurance contract has an expected net gain, the CSM is negative, and it reduces the ass…
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it is on page 40 (section 6.5.1) of the IFRS 17 LRC source material. Thanks!
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Thank you! The source text also says this in section 6.5.1: "In the rare case that there is a net gain from purchasing reinsurance, the resulting CSM is negative and is booked in a liability position." If reinsurance held CSM is the expected…
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Where was the third point (all individual changes ≤ 15%) from? I see this in the link provided: "Any other changes to existing differentials or risk classification elements must be between -15.0% and +5.0% with no off-balancing. Each change to a di…
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Would the calculations in Fall 2019 #15 be testable? How would part a and b be revised under IFRS? An example would be helpful to see how old questions would be modified. Thanks!
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For the LC adjustment (= PAA - GMA estimates of LRC), do we only apply this to groups with contract terms all ≤ 1 year containing onerous contracts? Or is it applied if we apply threshold 2 or 3 (as labelled in the wiki, not as numbered above) as we…