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We now have it corrected. Thank you for pointing it out.
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No, "avg severity of UW loss" does not involve premium. It's a probabilisttic statement of loss. The last two solutions are remiss in explaining ERD in full, as we have it in the wiki. I can't imagine that they actually gave credit for these answers.
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Sure, good luck.
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Yes, correct.
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1) "F = Cr(63) - total collateral provided" is incorrect. 2) Cr63(recov) = Credit allowed for net recoverables (Col 63) "amount not subject to collateral requirement" is a component of Cr63, from Col 57. We generally assume that it is zer…
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300 is obtained by weighting the number of bond issuers according to the following table: https://battleacts6us.ca/wiki6us/Odomirok.19-RBC#:~:text=Example%3A%20If%20there,1%20%3D%200.277.
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Cedar.ReinsAccting is now among the Links to Articles, and there is no link to BK.Reins there.
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I don't think this was explicitly stated in the article, but it is meant that qualitative tests are used when it is not possible to use quantitative tests for some reason. So, generally, if you are able to apply a quantitative test, that would overr…
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Bonds generally account for 50-60% of an insurer's assets. In this question, they account for less than 30% of total assets, which makes it problematic.
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The go-to source for these definitions for 6U is Odomirok. You can try auto-searching for a given term in that document.
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If you are given two Sch P Part 1's for CY and CY+1, you will be able to produce data in this table's format for CY+1. Let me know if this answers your question.
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The article says this situation is similar to payments by TPA and reimbursements to TPA. Here's what they say about both of these situations: _To the extent that payments have been made by the TPA but not yet reimbursed to the TPA, the entity’s a…
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This is Odomirok's coverage of prepaid expense: Prepaid Expense Ratio The ratio that is used to determine the amount of unearned premium reserves representing prepaid expenses is calculated for each line of business separately. It is the ratio o…
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It would be a correct answer. You would have to specify that the reporting member of the pool is benefiting from the pooling, rather than getting penalized. Companies use pooling as they would other reinsurance to gain surplus benefits. Odomirok …
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This ratio is from the perspective of the filer, be it an insurer or a reinsurer. The statement in quotes explains that "agents' balances" correspond to reinsurance premium due from ceding insurers, in the case of a reinsurer. Primary insurer would …
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I suspect they did not find the standards offered in 5&6 to be sufficiently substantiated upon reconsideration, and rescinded these two options. In samples 1 thru 4, when an action level is given in connection with the standard, the answer goes …
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"Investments in Parent, Subsidiaries, & Affiliates" comes from Page 17, Five-Year Historical Data. There in turn, it comes from Schedule D, listing of bonds and stocks. The "Bonds" and "Stocks" items are the subtotals from Schedule D, which incl…
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The portion of ceded unearned premium that is expected to return as commissions to the cedant is called surplus aid. If you think of the mechanics of the income statement, ceded premium reduces premium and income, while ceding commission increases t…
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Sure, good luck.
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The given cededs are all on unpaid amounts, not paid.
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Yes, I stand corrected. On page 244, the text says: "R1 and R2 are risks associated with admitted invested assets . . . " So, the list on page 254 must have it wrong. It is the admitted collateral loan that goes in.
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katieoc27, it was an oversight that a CY/AY-1 UEP was given at all. It was not there to confuse the student. The intention was to give one UEP figure, under CY/AY.
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Hi_Hi, because it is not given in the problem.
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Graham's point is that premium written in 2016 would likely have been earned by yearend 2017, so that it would not contribute to the UEP at yearend 2017. By this token, the UEP that existed as of year-end 2016 would have gone down to zero at year…
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Correct.
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The "S_A" notation used in the formula is less than ideal. But the "m(S)" notation is recaptured in the TIA formula, indicating that it is understood that the average surplus is used for TIA_A. From there, you apply the NIGR on TIA_A to get the NIG_…
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Which excel example problem?
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Reinsurance generally does not assume claims as a whole. Part 5 reports total claim count. If it is a fronting arrangement, Part 5 still reports all the claims.
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For 2019.S.10, Graham already put footnote 5 saying the UEP aspect is defective. His answer is linked next to the footnote.
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2012.F.17 gave prepaid expenses, and it's an assumption that 50% of general expenses are prepaid. The excel problem itemized the expenses (instead of rolling them up as "prepaid"), so there is no longer a reason to consider the allocation of general…