Outstanding Questions from the Live Seminar
A quick note before I start… a lot of people seem to be missing some of the earlier blogs (particularly when I post several blogs in a week). Please make sure that you have read ALL blog posts:
http://theinfiniteactuary.com/blogs/exam6/
I had promised to get back to some people about certain questions asked during the seminar.
IRIS
Q. What type of incurred losses are included in the numerator of Ratio 5?
A. CY Inc Losses & LAE from the Income Statement
IRS Discounting
Q. Is the Schedule P that is used to derive the discount rate for an accident year fixed (or in other words, is the loss payment pattern for a given AY fixed)?
A. Yes: pg 8 of the text mentions that you should use the schedule that was available before the start of the AY
SCHEDULE P:
Q. How is Claims Made business treated in Part 1?
A. This isn’t explicitly covered in the text, so I doubt that it is testable. That being said, I believe it is grouped by Claims Made year (as opposed to AY)
RBC
Q. Why do we include the discounting adjustment AND give credit for tabular discounts when calculating the RBC reserving charge?
A. I don’t have a great answer here. It’s possible that there is a small degree of double discounting
Q. What is the specific formula to calculate the “adverse development formula” for the reserving risk?
A. Please see the note in the errata.
Note, please send me an email if I did not address a question that you had asked (I misplaced one of my note pages, so that is very possible).