Q23

bflisakowskibflisakowski
in Practice Exam 1

Are we supposed to assume that the reserves carried in Exhibit A meet the insurance laws of the domiciliary state unless told otherwise? I am curious to know how a company can meet the insurance laws of the domiciliary state despite being below the low end of the AA's estimated reasonable reserve range - the answer key says they DO meet the laws.

Comments

  • Staff - SJStaff - SJ
    Yes, on the exam you would make this assumption unless specifically told otherwise. You would need a lot more detail to actually evaluate that yourself. And, this exam does cover some bits of material related to insurance laws, but not nearly enough to fully answer that on your own.

    To answer your broader question.. I can’t claim to be an expert on all the insurance laws out there, but there is a difference between minimum reserves on a statutory basis, and the minimum reserve an appointed actuary thinks is reasonable. This is how you could still meet the applicable laws and be reserve deficient.
  • bflisakowskibflisakowski

    Thank you!

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