Month: February 2019

Duration

Basics Modified duration (sometimes abbreviated MD) is a price sensitivity measure, defined as the percentage derivative of price with respect to yield (the logarithmic derivative of bond price with respect to yield). Wikipedia ~ Bond duration As this is a measure of slope we can obviously take any linear combination of slopes from various lines…

By c.boersma February 25, 2019 0

Premium Liabilities

Purpose There are a few reasons for the calculation of premiums liabilities. The main purpose is to calculate an offset for the Unearned Premiums (20.20 Line 12). This offset we’ll cover later is called: Deferred Policy Acquisition Expenses (20.10 Line 43) and if negative we would use the liability called Premium Deficiency (20.20 Line 15)…

By c.boersma February 24, 2019 0

Off-Balance Sheet

An important topic for an Actuary as there could be risks associated with a company that are not disclosed on a balance sheet directly. For the most part these are stipulated by accounting guidelines like GAAP: due to being immeasurable, or unlikely to occur (< 50% chance). As a result it would be wise to…

By c.boersma February 16, 2019 0

Liabilities (20.20)

Obvious Ones Overdrafts (debt) Borrowed Money and Accrued Interest (debt) Payables (just opposite of receivables) Agents and Brokers (commissions) Policyholders (premiums) Other Insurers (re-insurance fees) Subsidiaries, Associates & Joint Ventures/Affiliates Everything Else Expenses due and accrued Other Taxes due and accrued Policyholder Dividends and Rating Adjustments Encumbrances on Real Estate Unearned Premiums Unpaid Claims and…

By c.boersma February 12, 2019 0

Assets (20.10)

Why is this important to know? Describe the elements and prepare the schedules of the Canadian Annual Return You should note there are only a couple sections here where there is more detail required to learn: unpaid claims (ceded) & deferred policy acquisition expense (DPAE). Top Tier Cash and Cash Equivalents Investment Income due and…

By c.boersma February 12, 2019 0

FSCO [Ontario] – Major Filing Guidelines

Introduction There is separate content regarding regulation 664. Regulation 664 is often tested as credit scoring is a special topic for this exam. Worth pointing out they only included the major filing guideline and the only content of significant interest is the territorial regulations and general restrictions. Actuarial Support The insurer must provide detailed support…

By c.boersma February 3, 2019 0

Spring 2018 – Q24 – DCAT

I’ve highlighted in bold the areas of concern listed below. There are 8 solutions here. 3 parts to each answer: the error, reason, appropriate action – each worth 0.25 points (0.25 x 3 x 4 = 3 points) This question is important because it highlights a different style of question than before: finding errors vs.…

By c.boersma February 3, 2019 0

Evaluation of An Government Insurance Program

How well have the federal and state government performed in providing insurance? According to Greene the [three criteria] to be considered are: [Necessary] Is the provisions of the insurance by government necessary: Does it achieve a social purpose that cannot be provided by private insurance? [Funding] Is it insurance or a social welfare program? Social…

By c.boersma February 2, 2019 0