Boot Camp: Miscellaneous
Intro
I couldn't think of anything to write for an intro, so... let's just go on to the next section!
Legal Cases
The are 27 legal cases in the syllabus, spread across 4 different readings. The main reading is Landmark Legal Cases, containing 14 important cases. (It's labelled as Land.Cases in the BattleWiki.) The other readings containing cases are:
- Baer.Intro (Baer & Rendall: Cases on the Canadian Law of Insurance) 5 cases
- Dav.NonPec (Davidson: The Cap on Non Pecuniary General Damages) Trilogy ruling + 4 cases after the Trilogy ruling
- McD.Intro (McDonald: Life Insurance Laws of Canada) 4 cases, including the famous Insurance Reference Case
| To help you learn them, I've organized each case into Facts, Issues, & Rulings. |
This is demonstrated below with the case Whiten v Pilot Ins Co. (This is taken directly from the BattleCards)
- Facts: family house burns down | InsR pays for temporary shelter then ceases payments | clms not liable due to arson, but provides no evidence
- Issues: did Pilot Ins use the power imbalance to force InsD into a smaller settlement?
- Rulings 1,2,3: jury awards 1m punitive | ON appeals court reduces to 100K | Supreme Court restores 1m
Note that the '1,2,3' indicates that this case had 3 separate rulings: the initial trial, 1st appeal, Supreme Court appeal. Some cases are settled just with the initial trial; others with an initial trial and appeal.
| Some cases have relevant information that doesn't fit into the Facts, Issues, Ruling structure. (defns, other details, etc...) |
For Whiten v Pilot, there are 2 additional items:
- Details-general: awards of this type should consider PROPORTIONALITY along several DIMENSIONS
- Details-dimensions: BV(H)DP
- Blameworthiness of InsR
- Vulnerability of victim
- Harm to victim
- Deterrence to InsR
- consider other Penalties InsR may have incurred
- punitive award should not be seen by the InsR as a "license" (no financial gain for InsR)
The Landmark Legal Cases reading covers a broad range of issues. If I had to reduce Whiten v Pilot to just 1 word, it would be proportionality. There is a table in the main BattleWiki article for Land.Cases with a 1-phrase summary for each case. You should focus on remembering the these 1-phrase summaries as a hook for remembering the details for each case.
The mini BattleQuiz below covers this and 2 other cases:
- Somersall v Scottish & York, which is about subrogation
- Sansalone v Wawanesa, which is about duty to defend versus duty to indemnity
| Note that in the mini BattleQuiz below, some of the BattleCards are actually old exam questions. Click E in the left-hand column to open a PDF with the full exam question and answer. |
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Facility Association (FA)
This paper, Dutil.FA, is a puzzle because it bears little resemblance to the types of questions of the exam. It is heavily tested, but the best way to learn about FA is to go the FAQ section of the FA website, and to study old exam questions. (The computational question, #7 from Fall 2015, would be very difficult to answer based on the reading. You would probably need to be familiar with those computations as part of your work.)
The #1 fact to memorize about FA is:
Goal of FA: to ensure (auto insurance availability) for (all owners & licensed drivers) unable (to obtain coverage through the voluntary market)
Note my use of parentheses above. These are not really parenthetical statements - I sometimes use parentheses to separate and highlight phrases. If you can break a long sentence into chunks, it will be easier to grasp the meaning, and also to remember it.
A couple of other cute little factoids about FA are:
- FA was created by the insurance industry
- FA is an unincorporated non-profit of all auto insurers
Now, there are 3 types of risk-sharing mechanisms administered by FA:
- FARM (Facility Association Residual Market)
- RSPs (Risk-Sharing Pools)
- UAF (Uninsured Automobile Fund)
Obviously, each of these fulfill their own key purpose. See the BattleCards in the mini BattleQuiz for the answers.
A favorite exam question is to ask about operational differences between FARM and RSP. One area of difference concerns rates. FARM uses rates set by FA's pricing department, whereas RSP uses rates set by the ceding company.
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Appointed Actuary
OSFI.AA is a heavily tested guideline that describes OSFI's requirements regarding the role of the AA (Appointed Actuary) in federally regulated insurance companies. It summarizes certain sections of the Insurance Companies Act (see ICA.Ch47) but OSFI.AA is much easier to read.
The main duty of the AA is to perform a valuation of reserves. The fancy-pants way of saying this is:
The AA must perform a valuation of the policy liabilities @ year-end using AAP (Accepted Actuarial Practice)
After the AA has done the valuation, they must write as many as 5 separate reports.
# Report Comment send to.. 1 Appointed Actuary's Report see OSFI.MemoAA for instructions on layout of AA report keep on file 2 FinPos (Financial Position) must be done yearly BoD (Board of Directors) 3 FinCond (Financial Condition) not the same as FinPos, may use DCAT methodology here BoD, OSFI 4 MAE (Material Adverse Events) required if there is a MAE requiring rectification BoD, CEO, CFO 5 PH Fairness (PH = Policyholder) assesses fairness with which PHs are treated regarding dividends, bonuses,... keep on file
The last thing the AA must do before going home for the day is the final opinion.
The final opinion concerns the parts of the F/S (Financial Statements) that required discretion* or significant calculations or judgments.
- * Here, discretion means: the freedom to decide what should be done in a particular situation
The duties of the AA was asked on (Fall.2016 #27c), although they only asked for 4 duties, not all 7 that are listed above.
The rest of this paper...
- There is a ton of memorization here, but they're easy points to get if you take the time to drill yourself, over and over and over and over and over and over...well, you get the idea. Unfortunately, that's what it takes. At least with the BattleActs system, you don't have to figure out what you have to memorize. I'm telling you, so you just have to sit down and do it.
- The only other item I want to mention in this introductory boot camp article is the peer reviewer. Basically, a peer reviewer is supposed to double-check the AA's work. Like the AA would ever make any mistakes! Ha, ha!! (There's a s**t-load of specific things they have to do, but I'm not gonna bore you with that for now.) I'll finish this section with one of the top exam questions, which is:
What are the objectives of a peer review of the AA's report?
- Your hint is AAC. The answer is in the mini BattleQuiz.
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Summary
The Full BattleQuiz shows the BattleCards for previous mini BattleQuizzes all at the same time.
Full BattleQuiz You must be logged in or this will not work.
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