graham
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No, it isn't the same thing. They are both deferrals of income tax but for different reasons: * the plain old "deferred income tax" is a liability that occurs because of differences in income recognition between tax laws and company accounting …
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Yes, that's correct. Sometimes it just takes a while for everything to be signed and finalized so they allow a grace period of 9 months. I'm thinking you got this from the answer to Exhibit A - Q27 in the source reading. But the way I interpreted…
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Yes, you're correct. The formula I put in the GAAP surplus subsection of the wiki in Odomirok.22-23-GAAP applied only to those 2 problems, but I see that I wasn't clear about that. The 2 exam problems I referenced only provided RP (Reinsurance Provi…
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Yes, that's correct.
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Yup! And even if you do it the direct way without referring directly to the 2017.Fall problem, this is a good example of how it helps to do the practice templates many times over. The template for 2017.Fall Q10 is in quiz 4 of the chapter 8/9 (wh…
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First of all, the examiner's report solution is confusing. It all boils down to calculating: * 2017 net income = -49 * 2017 direct charges for surplus = -59 * 2016 surplus = 358 (given) Then the 2017 change in PH surplus = -49 -59 = -108.…
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Yes! That's an astute observation. (It's not really clear from chapter 9 of Odomirok, but the IRIS 8 formula makes it explicit.) Also, check the pdf solution for this problem in the wiki. (It shows there that surplus notes is part of additional c…
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Overdue is not the same as slow-paying. Slow-paying means they have a high proportion of (non-disputed) overdue recoverables, at least 20%. This piece (Section 2) is always calculated. It doesn't matter whether the reinsurer is slow-paying or not…
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You are correct. I have made the necessary adjustments to the pdf solution in the wiki and also to the practice template. Sorry for the confusion and thank you very much for pointing this out.
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Yes, I see what you mean. The way they provided the information is a little confusing. In cases like that it's best to explain any assumptions you make and to show all your work. That way they will know you understand the material and you will maxim…
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Q1: * Your solution is equivalent to the one in the examiner's report. * The condition I use in the practice template: ==> NPV@90 >= 110% x (prem) * is algebraically equivalent to the inequality they use in the examiner's report: ==…
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Sorry about that. I made a typo in the javascript code for that page. It should accept 0 now.
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Your first point is correct but your second point isn't. There are 2 things happening here: * The government pays 85% of the losses up front (assuming the required conditions are met: aggregate losses > 100m, 20% deductible is met.) If aggre…
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Sorry, I see how my wording is confusing. I should have said ceding comissions should not be subtracted from gross premiums. But in the appendix they do subtract ceding commissions. I hope that's clearer.
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You are correct. This is a contradiction. The text says that ceding commission should not be included in a risk transfer analysis, but then in the example in appendix they do including ceding commission. It isn't possible to resolve this based on…
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Thanks, I've corrected the typo to 9% - (2% +1%). For your Q1, I jumped back to a problem from chapter 23, 2016.Fall Q18 which is where the risk-free rate of 2% came from. I've made that clearer in the wiki and provided links back to the relevant…
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This is not a stupid question at all. I wondered about it myself when I first looked at it, and maybe I should have been more clear in the wiki article. The concept of "economic discounting" was discussed more fully in a reading that is not longe…
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I agree, it is a little confusing. I took Odomirok at face value here, and if all reinsurers suddenly decided not to pay then then the line 16.1 asset, net amount recoverable from reinsurance would go to zero. But that couldn't happen in isolation. …
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You are correct that it is a hard problem. First check the solution I provided to this problem in the Schedule F wiki article: * https://battleacts6us.ca/wiki6us/Odomirok.14-F There is also a practice template for this problem in mini Battl…
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Great!
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Sorry, I didn't quite understand your question. Let's look at 2 examples: Example 1 * SAP reserves = $100 * discount factor = 0.99 (because investment yield is low) * FV(reserves) with discounting & without margin = $99 If you add …
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In the U.S., risk margins are generally done implicitly by using conservative judgment. For example, selecting higher LDFs or higher frequency & severity trends would be conservative because it makes the reserve estimate higher. (Canada by contr…
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Sure. If you haven't done so, it will help to review the practice template for calculating the IRIS 4 ratio. This is the first BattleCard in quiz 1 from the wiki article: * https://battleacts6us.ca/wiki6us/NAIC.IRIS This exam problem is jus…
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Do you mean you want to be able to add your own colors? Or that the webpage comes pre-coded with colors according to the learning objectives A, B, C,...? Either way, we'll make a note to review this on our next iteration of enhancements. Thanks f…
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If you're referring to 2016.Spring Q8, the answer in the examiner's report is wrong/outdated. (See footnote below BattleTable in the Cook wiki article.) The correct answer is that RF profit/loss is allocated by market share. Under JUA, insureds d…
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Let's ignore investment income since your question is about Step 1 of my solution. The way I would think about this is: * pre-tax profit = money in MINUS money out * for an insurance company, that means earned premiums MINUS losses & ex…
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To be more precise, it's the change in nonadmitted assets that are included in the surplus calculation. * If nonadmitted assets change, there is an impact on admitted assets * If admitted assets change, there is an impact on surplus I've l…
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If I understand, your question is about part (b) and you want to know the rationale for the 5 items included in the sum to get the total assets. The simplest answer is that these are all balances sheet items that are designated assets. In particular…
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Actually, I'm not sure if there is good intuition on all of this. The use of the mean in all these formulas is just an approximation anyway. Investment income is being earned continuously throughout the year on whatever funds are in the insurer's co…
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I think I would phrase it as: the excess layer kicks in at the retention point. If: * retention = 8m * excess coverage = 10m then the excess layer kicks in after losses reach 8m. The reinsurer would then cover any amounts in excess of 8…