CIA.CSOP

Foundational. Most of these 6 CSOPs (Consolidated Standards of Practice) are also covered in other papers. See OSFI.AA for Section 2400 (Appointed Actuary) and CIA.DCAT for Section 2500 (DCAT). For 2019.Fall, the following sections have been added to the syllabus: 1240, 1400, 1510, 1600, 1700, 2100.

New Reading for 2019.Fall: This BattleActs content for the new sections listed above will be completed by early June.

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Pop Quiz

• What are the acceptable ranges for each of the 3 MfAD categories: claims development, investment rate of return, and reinsurance recoveries?

BattlePlan

Based on past exams, the main things you need to know (in rough order of importance) are:

• reasons for MfAD(claims) to be higher than the high end (20%) of its range
• reasons for MfAD(inv) to be lower than the low end (2.5%) of its range
• enquiring and responding professional: definitions & communications
• definitions of claims & premium liabilities
• general considerations in estimating liabilites

Top Questions ← Questions you absolutely need to know!

reference	part (a)	part (b)	part (c)	part (d)
E (2017.Spring #25)	MfAD(claims): - reasons to be > 20%	see CIA.MfAD	see CIA.MfAD
E (2016.Fall #26)	definitions: - claims & premium liability	estimating liabilities: - considerations	see CIA.Discnt	see CIA.Disclosure
E (2015.Fall #25)	see CIA.MfAD	MfAD(claims): - reasons to be > 20%	MfAD(inv): - reasons to be < 2.5%
E (2014.Fall #31)	definitions: - enquiring/responding prof.	communications: - enquiring professional	communications: - responding professional

In Plain English!

Standards of Practice 1520 (formerly 1620 & 1630)

• This section is all about the CIA/CICA JPS:
  • CIA: Canadian Institute of Actuaries
  • CICA: Canadian Institute of Chartered Accountants
  • JPS: Joint Policy Statement

• It discusses the working relationship between auditors and actuaries. In particular: RID

Reliance of auditor & actuary on each other's work

Interaction: between auditor & actuary

Disclosure: of responsibilities of auditor & actuary

• (I'm not sure you need to memorize this - it just seemed like a good way to start this BattleWiki article.)

• The stuff you do need to memorize is in the BattleQuiz below. Note that the BattleCards for the responsibility of management, the actuary, and the auditor have not been asked on a recent exam, but have been asked on pre-2012 versions of this exam.

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Standards of Practice 2200, 2400, 2500, 2600

• Virtually all of this is covered in other readings.
  • 2200: Valuation of Policy Liabilities
  • 2400: Appointed Actuary
  • 2500: DCAT
  • 2600: Ratemaking

• I don't think you need to spend much time here, but here are a few technical defns you need to know that have been asked recently:

defn of claim liability:	PV (claims, related expenses, future taxes) calculation date that were incurred before that date
defn of premium liability:	[ PV(claims, related expenses, future taxes, premium development) – DPAE ] @ calculation date incurred after that date on policies in-force on/earlier than that date

• Those defns are a mouthful, but Alice highly recommends that you memorize them well. Together, these were worth a full point on (2016.Fall #26a)
  • Note that (2016.Fall #26b) also comes out of this section, asking for considerations when estimating liabilities, but this can be answered from general knowledge (U/W & claims practices, reinsurance, data).

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BattleCodes

• Memorize:
  • defns: enquiring professional, responding professional, claim liability, premium liability
  • responsibilities: management, actuary, auditor regarding F/S (Financial Statements) according to JPS (Joint Policy Statement)
  • considerations: for estimating claims & premium liabilities and MfADs (overlaps with MfAD paper)

• Conceptual:
  • Just understand that information from this reading on statement of principles is scattered throughout many other syllabus readings.

• Calculational:
  • none

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POP QUIZ ANSWERS

• Acceptable ranges for MfAD categories:
  • MfAD(clms): 2.5% --> 20%      MfAD(inv): 25 --> 200 bps      MfAD(re): 0% --> 15%