Staff - AC
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Fair-value liability is made up of PV of payments and cost of capital, as you see in this solution.
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I tried two simulations of the question, and the sum of other surplus charges checked out in both.
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The Odomirok paragraph following Table 102 on page 326 explains GAAP accounting of financial instruments.
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Yes, it will. It is the same as what they do in sample 1.
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Yes. Risk-Based Capital is a probabilistic, forward-looking provision, for the risks in the future. By contrast, reserves deficiency, as defined by Schedule P, is a result of historical positions held. Deficient reserves mean surplus is understated,…
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Saying they don't need regulator protection because they are sophisticated purchasers would probably be acceptable.
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AMIT is outdated. Tax-exempt bond proration is now 25%.
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It seems like your question is a problem-specific one, but I can't make out which problem. Could you clarify?
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"Value of common stock as recorded by reporting entity" is a phrase that tries to get the meaning exact, but unfortunately makes it a little ambiguous. It is the phrase used in Odomirok. It means "reporting entity's holdings of its affiliate's commo…
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For Gross Change in Policyholders’ Surplus, the leading year (2012) IRIS 4 determines whether surplus (both current and prior) should be adjusted.
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Yes. Funding is through sharing premium and loss within the voluntary market.
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The difference is in who services the policies. This is pointed out in the Cook.Personal wiki. The comparison there applies to WC residual market as well.
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250 and 50 are not agents' balances. Agent's balance is a balance of premium.
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"Evaluate the potential effectiveness" can generally be understood as factors that may make it effective or ineffective. This question compelled you to think creatively about a regulatory instrument. You would probably lose points for giving a on…
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IRIS 4 value from part a is 19%, not 13%. It is an unusual value.
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The standards encourage uniform regulation across states, but this can stifle state innovation or flexibility to adapt oversight to local market conditions. Smaller or less complex state markets may be forced into “one size fits all” rules that don’…
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250 and 50 are also paid loss recoverable.
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This had to do with needing the discount factor by AY for AMTI, which is no longer in force.
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Yes, it did. One of the main goals of M-F was to allow insurers to continue bureau ratemaking under state regulation, free from federal antitrust prosecution (except in cases of boycott, coercion, or intimidation).
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Yes, and that's what that means.
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No, but a question may involve the sequence of events.
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If a reinsurer is financially weak, slow-paying, or in runoff, collectability is at risk. But assessing true solvency is difficult, especially for non-rated or offshore reinsurers. Collectability may depend on the adequacy of trust accounts, lett…
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Sure, good luck.
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We need to solve for -37,500, because we are given that primary's income is 37,500 prior to commutation. To pay no tax, its income needs to be zero.
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Where is a question on these challenges raised?
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As you see in the text, the NAIC definition of "reasonably self-evident" is ambiguous, and the clarity that a CAS work group tried to bring around it is contested by the authors. "High loss ratio cap" is not in a codified definition of it by any…
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Exhibit of Premiums and Losses (EPL) contains a subset of the data fields presented in the Underwriting and Investment Exhibit (UIE), parsed out to individual states. Odomirok does not have a chapter on UIE and EPL, although they frequently refer…
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Premium items are said to come from Income Statement item 1 of the various years. That item is net premium. The reserve items all come from Schedule P Part 2, which is net of reinsurance. So, it makes sense that they are matched up with net premi…
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Yes, cat risk and operational risk are new since 2019. This is explained in the Study Tips: https://battleacts6us.ca/wiki6us/Odomirok.19-RBC#Study_Tips:~:text=review%20of%20topic-,Study%20Tips,-BattleActs%20Coffee%20Mug
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Your thinking about excess is correct, and the reinsurer holds the NPV of its reserves. Neither of these mean that the ground-up loss is to be used for 10-10. I think you may be confused about what "excess" is. Say we're contemplating a gro…