graham
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I was talking about Canada Pension Plan. This is not mentioned in the actual source text because it is a U.S. paper. I just wanted to include some Canadian content. :-) (The other CPP, Canada Protection Plan, is a private insurer.)
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The second sample answer you quoted from the examiner's report is not a very good answer. I'm not even sure that point (2) is saying that that subrogation rights were not affected because there seems to be a word (or words) missing. In any case, I w…
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Yes, I believe that's what they really meant: total excess(deficiency) for all AYs as they were on Dec 31, 2014 using information available as of the end of CY 2015. Thank you for taking the time to post about this. It's been very helpful. :-)
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Yes, now that we've had all this discussion and I've gone back to look at these problems in detail, I think the wording for 2016.Fall Q14(b) should probably have been: * Calculate the excess (deficiency) amount for CY 2014 as it was on Dec 31, …
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Everything you said is correct except that the answer is indeed the margin for the prior year-end of CY 2015 on Dec 31, 2015. The confusing part is that have to use what was paid in CY 2016 to calculate what the margin was for CY 2015 on Dec 31, 201…
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Hi @xuchaofan, Did you have a specific question about this?
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Well, I just noticed that there are 2 versions of the OSFI Earthquake reading from February 2013. (The syllabus states that February 2013 is the current version.) It looks like the CAS updated the content of the reading earlier this year but did …
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1) * The margin calculation is for CY 2015. You can never calculate the excess (deficiency) for the current year because you have nothing to compare the current year-end provision to. You have to wait at least 1 year, then look at that provisio…
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The 8% limit is for New Brunswick. This exam problem is about Nova Scotia and there's (currently) no limit on the number of risks transferred for NS, although certain other limitations and conditions still apply.
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In the Statement of Income, a negative value means a loss, so negative taxes here is just the normal situation where the company has a tax balance that it must pay to CRA.
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You know, I went back to look at the CCIR instructions because of your comment and I'm going to add something to the wiki. The change in the CCIR instructions is: * Overlay approach adjustment for financial instruments Then just a little fu…
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Yes, that's all correct but you actually do have enough information to match the B-A value of 4817. You can use the AY 2017 & prior column in 60.41 because 2100+K=2100+2716=4816. (Off by 1 due to rounding. The concept (which you might already…
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Please see my answer to your related post here: * https://battleactsmain.ca/vanillaforum/discussion/357/investment-income-calculation
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The investment income calculation comes from CCIR.ARinstr, but as you noted in your post linked below, there is no mention of Income from Insurance Operations in the latest version of the CCIR instructions. * https://battleactsmain.ca/vanillafo…
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The formulas you use to get the capital required for all the individual pieces is the "capital at target". You don't need to divide by 1.5 until the very end after you've added up all those individual pieces. At that point you can think of convertin…
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They did the calculation all in 1 step and that can be confusing when you're learning. Let's step back to the end of 2014 for a moment and let the unpaid amount for AY 2014 be A. You could then use the given payment pattern to find the amount exp…
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Yes to your first question. About your second question: I suppose I was a little sloppy in my presentation. What we're calculating with the formulas is the max DPAE even though I just called it DPAE. The DPAE is more accurately called the booked …
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If the costs are not recoverable from equity in the Unearned Premium Reserve then you can't consider this an asset because the asset would have no "source" to fund it. Example 1: * Suppose you have $1,000 in deferred acquisition costs and an…
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You are right that this is confusing and it is not explained in the examiner's report or in the MCT reading. As you said, Capital Available includes something called earthquake reserves but Capital Required also includes this same item. So, which…
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Your method looks fine to me. You would normally get the same answer but the examiner's report used the old method for calculating premium liabilities. That should be the only reason you get a different answer with your method.
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The syllabus is confusing on this point and I can't say for certain whether you need to be able to do this calculation for the exam. If you were doing it for work, then definitely yes. The confusion is because this calculation relates to credit r…
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Hi, I see what you mean. Why are we only including the margin as part of the required capital instead of the margin + the acutal unpaid amounts? The answer is that the unpaid claims are already booked as a liability on the balance sheet. You c…
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Good morning, 1) Self-evident test: * Since the "self-evident" risk transfer test is a qualitative test, it's hard to be specific because it depends on the situation. The things you mentioned are definitely considerations, but the key is tha…
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Thanks, that slipped past me. I edited the BattleCards to eliminate most of the questions from the sections that aren't on the syllabus anymore. I didn't eliminate all of them however because the sections that are on the syllabus make reference to t…
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Oh, ok. In the sentence you highlighted, I think when they say "% change", they are referring to the measure of sensitivity, not the duration. So a large % change in the asset (due to an interest rate change) means the asset is very sensitive to a c…
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I'm not sure I understand when you say the MCT paper refers to duration as a "% change". Your previous understanding is correct in that a duration is a length of time. Try taking a quick look at the CIA.Dur wiki article where duration is explained w…
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I'm going to say probably, but it's not 100% clear from the CAS syllabus. I added a note in the ORSA wiki article here: * https://www.battleactsmain.ca/wiki6c/OSFI.ORSA#Recent_Exam_Questions So you probably don't need to be able to compare …
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Hi, In the wiki article, I wasn't careful about distinguishing between booked DPAE and maximum allowable DPAE. (As you alluded to, the accounting department doesn't have to necessarily book the maximum.) In all of my calculations, I'm assuming we…
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Sample answer 1 is a little confusing because they calculate the APV of 2014 and 2015 together. They calculated the paid amounts in each of CY 2016 and 2017 (each of which consisted of contributions both AY 2014 and 2015) and then discounted those a…
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Selecting lower than the standard range: * MfAD(clms): There's a brief mention in the CSOP reading about selecting below 2.5% in the case of an insurer with aggregate stop loss coverage that is reserved at the stop loss limit. (I will add this…