graham
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According to what I've read about grading, if you make a mistake in a prior step of a problem you are only penalized once. If you use the incorrect number in a later step, they would not penalize you again provided everything else was correct. Bu…
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I don't know why they included that piece of information. It's something nobody would even have thought about. But if that value isn't 0 then it should be subtracted from U/W income. First, the definition of protected cell: * A protected cel…
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Hey Pat, I must apologize in advance because I'm not sure I can give you a complete answer to your question. The question you pose, answers to part (b) corresponding to all possible combinations of answers to part (a) would be quite an undertakin…
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You're right that the AA must (essentially) disclose their minimum (or maximum) amount if the opinion is deficient or redundant. The illustrative language from COPLFR is that the AA must say the booked reserves are $X less (or greater) than the AA's…
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Normally you can get extra information by going online but in this case the syllabus reading is from 2015 and there could very well have been changes since then. I would go by what's written in the syllabus readings. Webel 1 is dated 2014 and contai…
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You have to use the 50% quota-share agreement to calculate the reinsurer's triangles. Before the commutation, you multiply the primary insurer's direct paid and (case+IBNR) triangles by 50% to get the reinsurer's gross paid and (case+IBNR) triangle…
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First, here's a direct answer to your questions. Then further down is a more detailed explanation: * Even if the derivative is not highly effective, the bond valuation doesn't change. It's the derivative that gets valued differently. The deriva…
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I went back to the Porter text and it does indeed agree with what you said: * GLB prohibits national banks from forming subsidiaries to underwrite insurance. Porter also says: * GLB treats insurance underwriting differently from insura…
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That's the problem with there being so many errors in the examiner's reports. You just never know whether you're missing something or it really is an error. In this case, I believe the answers are correct in both cases. You just have to be careful y…
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That's an interesting question. They are definitely referring to subsequent events even though they didn't use that term. * The payment of the balances past 90 days due is a Type 2 event. It's assumed that the payment was not foreseen and simpl…
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This question doesn't have a single correct answer and can be argued either way. The idea is that ARPs, RFs, and JUAs create different environments with the auto insurance market within a state and this can have indirect effects of the size and comp…
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Yes I see, they chose 2 items from part (c) to explain in part (d) but left out the other 4. I think they picked the 2 that were the simplest. Sometimes there isn't really a satisfying answer because the accounting treatment of these items can be ve…
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Much better! I've switched it. Thx.
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Yes, just premiums. I changed it thanks. And yes, portfolio reinsurance is accounted for as retroactive insurance according to SSAP-62R, paragraph 30: * 30. Portfolio reinsurance is the transfer of an insurer’s entire liability for in force …
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Thank you for pointing that out. I have corrected it.
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It's interesting that the examiner's report mentioned nobody got full credit on this question. I think that pretty clearly indicates the graders had unreasonable expectations. It sometimes happens that the guidance changes but in this case I don't t…
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The removal of Secretary of State is correct, thanks. I've updated the wiki and BattleCard. I would agree that the wording "consultation" is too fine a distinction. If you can list the 3 parties involved, that should be sufficient. The removal of…
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I think this was one of those questions they throw in from time to time that's intentionally a little outside of what's discussed in the syllabus. * The first part of part (a) relates to the SAO so you could pick one of the usual SAO materialit…
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Basically that's correct. According to COPLFR: * A description of inter-company pooling is required in the SAO and could be included in the Scope section according to COPLFR. (I'm not sure where it would go if not in the Scope section so I woul…
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I'm not too sure I follow your question. Here are the numbers I got from the problem. The formula for T is the same in each case. Reinsurer A (authorized): * T * = Total Recoverables * = (amount in dispute) + (amount not in dispute) * = 5…
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Yes, 0.05 is a better fudge value. I've changed it, thanks. I went back and looked at the RBC factors for other assets and 0.05 does seem a more reasonable value to use elsewhere as well if they don't give you the factors and you're stuck.
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I'm leaning towards saying yes. (I think there might be more going on here than is discussed in Odomirok but that would be beyond the scope of the syllabus.)
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First off, I'm going to edit the BattleCard answer because it isn't clear. Thank you for noticing that. The term "funds held" is confusing because there are 2 very similar line items in the financial statements: * funds held under reinsurance t…
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What you're saying is pretty much correct but I would say part of it a little differently. On an insurer's financial statements, statutory income and statutory net income are (as you said) the same thing. There is no line item for anything called…
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Hi @peteabbate I don't think it was fair for the graders to expect you to just make something up. I know the AA is supposed to explain the adverse development but if I'd been taking the exam, I would have written that an explanation was required …
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Thank you very much @underhillp for pointing that out. I have added a footnote below the BattleTable and also at the end of the R5 section in the wiki. I used the initials AU to give you a shout-out. If you'd like different initials, let me know. …
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I think you might indeed be over-parsing this question. Exam questions do sometimes have subtleties they want you to pick up on but here I think they just wanted to see if you could provide reasonable wording for the SCOPE section related to data re…
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I don't have a good trick for that one. Sometimes a mnemonic works where you rearrange the first letters of each item into a word that's easy to remember. Or sometimes you can make up a dumb story that somehow uses pieces of what you're trying to re…
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Yes, you're right. Thanks for letting me know. (I can't give you a shout-out in the formula sheet, but check your (physical) mailbox. Don't know how long it will take.)
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I believe you are asking about 2015.Fall Q13. A short-tail line like homeowners may be exposed to catastrophe and may need to quickly draw on surplus to supplement its reserves. In contrast a long-tail line, while possibly requiring higher reserv…