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These would be the likes of change in unrealized capital gains that do not hit the net income.
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Sure, good luck.
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There is no impact of a rating on a letter of credit, mainly because letter of credit is mainly an accounting transaction where monies are deposited in the bank in return for the said letter of credit submitted to the cedent.
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Exam problems generally ask for the surplus balance to be calculated, giving the prior surplus balance. Then, it's a matter of adding net income to the prior surplus balance. This problem is unusual in the sense that it asks you to calc surplus b…
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Collateral are the funds provided by the reinsurer against the credit risk of their obligations to the cedent, and reinsurer's rating has an effect on the size of this collateral. Reinsurer may "access" (or hold) collateral from retrocessionaires, b…
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Protecting competition is a key element in allowing compacts to stay. The whole SEUA debacle came about because it hindered competition. NAIC was walking on eggshells in suggesting compacts continue, so that caveat about competitiveness was importan…
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For letter of credit, the appropriate item to cite would be "funds held by companies under reinsurance treaties." That is the item that embodies the collateral laid out by the reinsurers. For provision of reinsurance, the explanation of effectivenes…
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These two are different concepts. RRG, as explained in the wiki, is a collective of a number of similar businesses, with the intent of self-insuring their risks. Intercompany pooling is an accounting and reporting arrangement for an insurance compa…
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Sure, good luck.
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The answer differs by state, but generally, you have to re-qualify for AIP for your policy to be renewed at expiration. Here is how New Jersey handles it: ". . . The duration of coverage in New Jersey for high risk drivers is typically three year…
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Sure, good luck.
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Correct.
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GAO Report is now out of the syllabus, but it has material that is still relevant to this chapter.
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Your two statements above are correct. R4 is the reserve charge, which is fraction of net reserves. With reinsurance accounting, you reduce the net reserve amount, owing to the cededs, and this reduces R4.
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Materiality does not need to be associated only with inaccuracy. You may merely be dealing with a quantitative statement that may be material according to a certain materiality rule, e.g. certain percentage of surplus. Here, it is telling you to ask…
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Yes, it is. Uncollectibility is one of the reasons for/sections of the reinsurance note. Looking at the sample answers, it seems we are free to suppose any of the problems associated with this note may manifest themselves. So, your answer would also…
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No, I think Graham's earlier explanation is appropriate in this case.
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Yes, cat risk is currently being covered by the cat capital element. Asbestos & environmental can still be considered a challenge point.
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Yes, thank you marquaty.
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I'm afraid I don't understand your question. The battlecard for the question links to the CAS examiner's answer. The question gives a single, yearend UEP balance. The answer duly puts this balance in with the other liabilities. I don;t find an expla…
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"Equivalent insureds" are those that have the same risk characteristics. It's a way of saying "everything being equal." AIP rates are set according to pool experience: they are not subsidized by the regulator. The insurer that the AIP policies ar…
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Sure, good luck.
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Admitted carriers need to be licensed as well. Licensing requirements differ from state to state. https://agentsync.io/blog/compliance/challenges-of-state-by-state-insurance-licensing-requirements
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I think companies would provide/ be required to provide the data used and the results of the model. Just maybe not all the details of the model. . . and that is not very convincing to me either. The purpose of this model is to convince regulators of…
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AAO: adjustment and other. In 1997, NAIC redefined loss adjustment expenses into the categories of DCC (defense cost containment) and AAO. These loosely correspond to ALAE and ULAE, respectively, but with some subcategories changing places. AAO is g…
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Yes, I think these answers are acceptable, as they are mostly in line with the sample answers.
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It's because of this given in part b: They justwanted you to use surplus as such, probably to avoid having you recalculate income with reinsurance ceded.
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This is no longer on the syllabus. https://battleacts6us.ca/wiki6us/Odomirok.26-Taxes#:~:text=We%27re%20going%20to,in%20the%20solution.
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Sure, good luck.
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If you send me your solution, I can look over to see if it's correct.