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I think the wiki note means that a liability is established to offset the established asset, so as to defer the gain in income. It essentially means what you say.
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You have the right idea about intercompany pooling in Schedule P versus in the rest of Annual Statement: not treated as reinsurance in P, treated as reinsurance elsewhere. To see how these play out, have a look at this question: https://battleact…
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Spring 2015 exam was referring to an older version of IFRS, IFRS 4. When it was deemed inadequate, IFRS 17 was introduced in 2017. It is still not yet fully in force. Odomirok chapter deals with IFRS 17. From my read, the particular elements ques…
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Combined Ratio is (loss + underwriting expense) / premium. Operating Ratio also includes investment income in the numerator. I am told that "Combined Operating Ratio" is a Canadian term for Combined Ratio. I don't think you'll encounter COR in th…
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It looks like an oversight in the 2018.S.16.a solution sample 1. The other samples in the solution calculate the ceded portion of 30 by relating gross UEP/WP ratio to it.
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Actually, your answer is accepted if you considered the tax impact. Note that the CAS solutions for IRIS 2 and 7 provide alternative ways where the marginal tax impact of the commutation on net income is calculated, with a factor of (1-.35). But it'…
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Commutation is the ending of the insurer-reinsurer relationship regarding a certain contract. It essentially means the selling of the remaining contract loss reserves on reinsurer's book by the reinsurer back to the insurer. (Reinsurer pays to make …
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Statutory Net Income is after deduction of taxes. The solution provides the regular and the alternative minimum taxable incomes in order to calculate the taxes.
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Yes, these are two legitimate ways of finding this, except that you need to subtract capital gains tax from (1) as well.
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First, a correction for the CAS examiner's report: IBNR is included in Part 2, not Part 3. Their calculation in the answer justifies this. I find the scenario drawn in the question to be inconsistent. They continue to assume that Part 4 states IB…
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Odomirok notes on page 278 that net premium should come from Underwriting and Investment Exhibit. The relevant part of UIE has the data in a format similar to the premium table in this CAS question, except that it also includes "Assumed From Affilia…
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Both GAAP and IFRS consider underwriting and timing risks. This statement was made in error, we will remove it from the wiki. Thank you for pointing it out.
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The Underwriting Income in the Statement of Income is net of reinsurance. Have a look at this Liberty Mutual statement: https://libertymutualgroup.com/about-lm/investor-relations/documents/combined-statement-2020.pdf Premium and loss items in …
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Could you let me know in which battle card you saw this mention of timing risk not being a part of IFRS?
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I don't see a distinction between extending due dates and extending the "grace period" on the due dates. I don't find anything in the text that says to the contrary. So, I think the examiner's reasoning in making this distinction is questionable. Th…
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Shrinking UEP here is a result of shrinking Liability NWP. So, it can be related to the same issue as that stated for shrinking NWP. A line being short-tailed is related to the duration of its loss liabilities. It is not related to shrinking UEP.
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Advance premium is paid ahead of the start of the relevant policy period. It can be an estimate of the premium that will ultimately be required. It is kept in an Advance Premium Fund account, separate from operations accounts. Unearned portion of…
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.450 is the Reserves excess growth charge. .225 is the NWP excess growth charge. These are NAIC givens, not problem-specific. The .225 number is on text page 294.
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The increase in paid losses also affect the one-year reserve development. An increase in Paid is a decrease in Reserve. That's why we take the change in incurred losses.
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Graham has a good answer for this in the following (the October 2021 answer): [https://battleacts6us.ca/vanillaforum6us/discussion/33/common-pitfalls-gross-premium#latest] Let me know if this is not satisfactory.
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This is usually the case, although the text says some states are changing this to enable them to write in the domiciliary state as well.
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This appears to be a contradiction in the Odomirok text. My guess is, the original list is correct and the "admitted" on p. 259 is a typo. In the original list, mortgage loan, which is a type of collateral loan, is itemized separately. So, I think m…
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I find the following statement under Eligibility Requirements (p. 1.2) of the Emmanuel text: The Model Act requires a foreign surplus lines insurer to be authorized in its domiciliary state to write the type of insurance that it writes as surplus…
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In the Emmanuel wiki, I don't find it stated that surplus line insurers are not allowed to write in their home state. Did you see this in the Emmanuel text?
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Servicing carrier is an insurer contracted by the JUA to service JUA policies. There can be a single or several servicing carriers, depending on the size of the state. So, the difference is, JUA has the policies forwarded to it by all insurers servi…
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The change in Gross paid-in and contributed surplus from prior to current year is the sum of the three items of Surplus Adjustments for the current year. This is a portion of Direct charges to surplus. Net Income and Direct charges to surplus toget…
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This is now fixed in the Excel format. Sorry about the confusion. Thanks for pointing it out.
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We will mark this problem part as outdated in its entirety, because the text does not get into the same level of detail on any of these tax rates as it did in the previous version. Thank you.
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The question isn't flagged as outdated, because the stipulation to explain in the Actuarial Opinion Summary when IRIS 11 exceeds 5% in 3 out of 5 years remains. This is mentioned in the SAO wiki: https://battleacts6us.ca/wiki6us/Odomirok.16-17-SA…
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I see. In this case where there are multiple primary coverages, presumably from different insurers, I think the subrogation proceedings would determine the final split between WC and CAL. This really falls under insurance contract law, so I wouldn't…