Month: September 2018

Commutation of Claims

This whole section is predicated of reviewing a sample commutation calculate in Chapter 28 of Odomirok (Financial Reporting): Commuting a claim is a process in which one party is relieved of its obligations in respect of the claim in exchange for a cash payment. This can happen between insurers and individual claimants, with insurers under financial…

By c.boersma September 30, 2018 0

Risk Transfer Analysis

Definition 1. The reinsurer assumes significant insurance risk under the reinsured portion of the underlying insurance agreement; and 2. It is reasonably possible that the reinsurer may realize a significant loss from the transaction. Because the terms “significant insurance risk,” “reasonably possible,” and “significant loss” are not defined in either accounting standard, the challenge is…

By c.boersma September 30, 2018 0

Excess (Deficiency) – 60.40, 60.41

A big part of the AA job is to provide good estimates for Claim Liabilities and Premium Liabilities. Liability estimates that are too high will result in higher prices and lower future revenue (noncompetitive).  Regulators are more concerned with liability estimates that are too low (which puts company at risk of insolvency). Definition (60.40) –…

By c.boersma September 30, 2018 0

Net Income (20.30)

Common CategoriesRoERoARoRInsR + Underwriting Income (Loss) Yes Yes Yes Yes + Net Investment Income Yes Yes Yes Yes    Realized Gains (Losses) Included Included No No + Other Revenue and Expenses Yes Yes No No    Income from Subs Included Included Yes No – Total Income Taxes Yes Yes No No 1. RoE = Return…

By c.boersma September 29, 2018 0

Commissions (80.10)

Class of Insurance Deferred beginning Unearned beginning Written Direct Written Assumed Written Ceded Written Net Deferred end Unearned end Net Commissions [2]+[7]+[9]-[3]-[8] [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] Written (Net) = [4] + [5] – [6] Important Definitions Deferred (expense) commissions must include commissions paid on direct business and on reinsurance…

By c.boersma September 29, 2018 0

Net Investment Income from Insurance Operations

Reminder Policy Liabilities == Insurance Operations. This is investment income from assets required to support the policy liabilities.  For every dollar we have on the liability side we MUST have a dollar on the asset side.  Net Income from Insurance Operations measures how much investment income we received related to these assets. Net Income from…

By c.boersma September 29, 2018 0

Spring 2017 – Exam

Introduction Sample exam review #2. Exam (Hard!) General comments included: Candidates are explicitly told to show ALL work justify all selections Incorrect responses in one part of a question did not preclude candidates from receiving credit for correct work on subsequent parts Candidates should try to be cognizant of the way an exam question is…

By c.boersma September 23, 2018 0

Claim Liabilities

CSOP 1120 Definitions: Claim liabilities are the portion of insurance contract liabilities in respect of claims incurred on or before the calculation date. CIA: Discounting 3.1 Cash Flow Associated with Claim Liabilities: The first step in deriving the actuarial present value is to estimate the cash flow associated with the claim liabilities in order to derive the present value of…

By c.boersma September 22, 2018 0

Agricultural Risk Management

Program was effectively renewed in 2018 with slightly new titles and rules.  Existing document from 2014 probably wont be updated for awhile. Many items here are a combination of subsidies and other payments. Canadian Agricultural Partnership – Business Risk Management Programs (effective April 2018) Under the Canadian Agricultural Partnership, producers will continue to have access to a…

By c.boersma September 22, 2018 0

Alberta Ride Sharing (TNC)

Summary This is essentially a document that summarized the new policy wordings for the SPF9 (Alberta).  There are 4 periods discussed and they refer to three clauses in the policy wordings (and a major exclusion). The 4th period (0) is not-covered since it is not included in the coverage agreement.  The first period (1) is covered…

By c.boersma September 21, 2018 0