Archive for August, 2011

August 24th, 2011

Ken & I will be in Chicago 8/26-9/2, for the Exam 6 Live Seminar. Email response time during this period may be delayed.


3 extra CAS past exam questions – Accounting

August 18th, 2011

I realized that I had left out 3 accounting questions from the CAS exams (2 from RBC and 1 from IRIS).

I have uploaded the questions/ solutions to the file “Omitted_CAS_Ques.pdf” which can be found in the Introduction section of the Study Manual website.


IASA2: 2007, Q26d

August 15th, 2011

This is another one that is raising a lot of questions. A lot of people are curious about why the treasury stock is not included in the surplus calculation.

Remember that there are 2 ways to calculate surplus (from the Feldblum surplus paper):
-balance sheet approach: A – L
-income statement approach: prior surplus + income + direct charges/ credits

This particular question is using the Balance Sheet approach, since we are given a lot of info on both assets and liabilities.

Since we are not using the income statement approach (we can’t because we don’t have enough info), the components of income and directs/ credits are irrelevant. An increase in treasury stock falls under this category: it is a direct charge to surplus. We therefore need to ignore it.


Regulation and Misc Update

August 15th, 2011

I have 3 videos that I’m still working on that will be posted this week: A.M. Best 1, GAO, and RAND.  GAO and RAND will be really short.  Next week, I will post the remaining Government Programs video covering the Government Insurers Study Note.

I am working on two more sets of notecards, covering Reinsurance Accounting and the remaining Regulation topics.  These will also be ready next week.

In September, I will be posting memorization questions for my sections.  We will also be posting an original practice exam.

Some of you have requested a history of the articles from which past exam questions come from.  Angelo has sent me his list.  I’m having a little problem because of the syllabus turnover.  I will make sure to put something together when I get back from the live seminars in early September.  You really shouldn’t be taking practice exams until at least late September.

For the live seminar participants, you’ll need to bring a copy of the study manuals.  There is nothing new that is needed for the seminar, and that is why your live seminar tab on our website says that it is still under construction (there is no material posted to this page).  We might post information after the live seminar in this section.

There is a lot to learn on this exam.  At this point, if you get stuck, try to keep moving along.  You need to make it through the material.  Sometimes, it is easier to understand on the second pass.

Good luck studying.



Schedule F, Sample Q8

August 10th, 2011

This is another one that seems to be raising a lot of questions….

In particular, people are wondering why the 45K claim (8/19) and the 16.4K claim (10/25) are not recorded as “current” since they are under 50K (the paper mentions that the insurer does not report the claims until the totals exceed 50K).

However, we need to focus on the total claims, as opposed to individual claims. So, while it is true that the 45K claim will not be reported to the reinsurer because it is under 50K; when the following claim (136.4K) occurs, the cumulative total (45 + 136.4) has NOW exceeded 50K, so the insurer can report them together. Therefore the due date of the 45K claim will be set equal to the due date of the 136.4K claim (since they are reported on the same date).


Note that when answering this question in the exam,  I strongly recommend stating your asssumptions (ie “45K claim is not reported as it is under 50K” AND “45K claim will be reported with the 136.4K claim since the total now exceeds 50K”); since the question writer/ grader may have unintentionally included a claim under 50K without considering this rule.  This MAY be unnecessary (if it was indeed intentional), but better be safe in advance, rather than having to go through the appeal process.


Notecard Change(s)

August 1st, 2011

I will post all future changes to notecards to this particular blog entry:

-notecard “IEE -4-”: this was changed to say “Prepaid expenses”