Errata

April 26th, 2010

As a reminder, this list of errata will not be added to the cumulative set of errata that is available on the website:

Blanchard:
-In the section on non-admitted assets, delete “reinsurance recoverable more than 90 days overdue”
-Sample Set 2, Q1: The pension should have a positive impact of $2K on GAAP surplus and $0K on SAP (the treatment of the $8K is out of the scope of the syllabus). Therefore the correct surplus amounts are 134,600 under SAP and 135,500 under GAAP

IRIS:
-pg10 example, usual range should say 6.5%

Notes:
-Sample Q11: Solution for 2009 year: rows C2 and C3 should say 40M

RBC:
-In the section on regulatory action levels, I said that the RBC ranges are fixed and ACL are flexible (depending on the ACL: RBC ratio). I should instead have said that the ACL ranges are fixed (and RBC are flexible).

All the best for the exam!! Don’t hesitate to email me if you have any questions in these last few days.

Angelo Uncategorized

Regulation Info

April 24th, 2010

The set of Porter questions posted includes both the old questions already in the memorization questions for the regulation section and new questions.  The new questions are marked with an asterisk.

It doesn’t show as new, but the Williams video is posted.  I set up the link earlier, but didn’t mark it as active until yesterday afternoon.

Ken News

Cumulative List of Errata

April 18th, 2010

The Cumulative List of Errata has been uploaded to the website (found in Helpful Material). This includes all of the errata that I mentioned in my blog up until 4/1.

NOTE ANY NEW ERRATA POSTED TO THE BLOG AFTER THIS DATE (4/1) WILL NOT BE ADDED TO THIS FILE.

Angelo Uncategorized

Porter and remaining items

April 11th, 2010

I am recording Porter today and tomorrow. It definitely won’t be too exciting. It is all memorization. All of the notecards for Accounting are now complete. I will also add extra problems / notecards for Porter and Williams later this week.

We will have one full practice exam.

The lesson for Williams will be posted later this week.

Ken Uncategorized

Notecards

April 6th, 2010

Notecards from some of the accounting papers have been uploaded to the TIA website. Additional notecards from a few other papers will be uploaded later.

These notecards are NOT comprehensive. I have mainly focused on the lists/ formulae/ and some key memorization points. You will need to supplement these with your own notecards.

The papers for which notecards have been uploaded are appearing as “New or Updated Lessons” in the website: please note that there are actually no updates to these papers other than the notecards.

Angelo Uncategorized

Errata/ Live Seminar Followup

March 29th, 2010

A couple more changes for the Study Manuals:

Gorvett:
-Sample Q3: In the question, change “AM Best” to “S&P”

IRIS:
-in the example for Ratio 4, replace the 1,250 with 1,200
-IRIS11/ 12: delete the last paragraph, as this no longer appears in the syllabus readings.

Notes:
-I commented on the treatment of the non admitted charge from Large Deductible policies in a prior blog, but wanted to elaborate. In the paper, Feldblum stated that the nonadmitted charge only applies to losses paid by the insurer. However, a past exam question applies to both paid and unpaid. If you choose to apply it to both paid and unpaid, again I’d recommend stating the assumption that I mentioned in the earlier blog. If you choose the former approach (only applying to paid), I would still recommend stating in your solution the assumption that the non admitted charge only gets applied to the paid losses.
-Because of the ambiguity, I recommend changing the example on pg10 to add that the $200 of losses has already been paid by the insurer. This will change the answer of part a to say that a reserve of 800 is established, and the insurer would create a recoverable of 150. Similarly, in part b, the reserve is 800 and the recoverables are 194. In part c, the reserve again is 800.

Schedule P:
-2004, Q62: my video explanation is not correct. I should have compared case reserves as of the same ages. For eg, the 2003 AY reserves as of 12 months should be compared to the 2002 AY reserves as of 12 months, and so on.

That’s it for the errata for the time being.

SEMINAR FOLLOWUP:
There were a few questions outstanding from the Live Seminar. Here are my responses. I think this covers everything (please send me an email if I am leaving anything out).

Q. When deriving the right most column in Schedule P, Part 2 using Part 1 data, do we need to adjust for the tabular discounts?

A. Yes, since Part 2 is gross of tabular, but Part 1 is net, we would need to add in the tabular discounts back to the reserves. The footnote from Schedule P, Part 1 actually mentions “The tabular discount, if any, is reported in the Notes to the Financial Statements which will reconcile Part 1 with Parts 2 and 4″.

Q. Does “investment income due and accrued” directly enter into the investment income calc?

A. Not directly (refer to the Investment Income calculation in the Annual Statement”). The investment income due figures are already included as Investment Income amounts in the Income Statement. For example, if the company has $100 of bond investment income due and accrued, this $100 would be includes in the Investment Income from bonds in the Income Statement.

Q. Does Schedule F include both prorata and excess reinsurers?

A. Yes, the Schedule includes all reinsurers. Since the insurer is recording the reserves net of all reinsurance recoverable, it is important to establish the provision to account for the potential uncollectible recoverables from all sources.

Angelo Uncategorized

Porter and Williams

March 16th, 2010

I am finishing the problems for Porter today, so the manual will be posted tonight. It is pretty long. This text is just a good one to read. It probably wouldn’t be a bad idea to re-read the text in April when you’re on one of your final passes through the material. The entire text can be read in a half a day.

Williams will be posted sometime before the live seminar. I wish I could give you a firmer date, but Part 5 will be taking up a lot of my time.

The videos for these will be posted the week after the live seminar. Not a lot of insight on this material, just a lot of memorizing.

Ken Uncategorized

Comment on Errata from 2/28

March 4th, 2010

FYI, I deleted my last point from the errata from 2/28. The change to the Taxable income paper that I had written was not correct (so the original notes were correct).

The indirect method for the incurred loss is the statutory incurred loss - change in the reserve discount.

Angelo Uncategorized

Errata

February 28th, 2010

Some more errata. Before I start, just a quick reminder that if you have any questions, rather than posting comments to this blog, please send me an email. I can get you a response much more quickly that way.

COPLFR:
-2008, Q31a: In the solution, the 6th answer should say “Other Loss Reserves”

IRIS:
-Sample questions: the solution to Q4 should say that RBC is based on “quantitative” factors, not qualitative.
-2007, Q32a: although the current solution was one of the model solutions from the CAS, it does not use the exact formula from the paper. I would recommend using the alternate solution: Inv Yield =2[5/(240+170+1+1-5)]=0.02457

RBC:
-2003, Q50: my part b solution is inconsistent with my part c solution. I am changing the solution to part b. Make the assumption that for the figures given in the question, half of R3 has already been added to R4. Therefore the square root rule will use a R3 of 40 and R4 of 50. This produces a RBC of 73.65 (which is the number found in part c). Part d also needs to be changed. Change the first number to 97.4. Also, use a R3 of 25 and R4 of 80.
-2008, Q28: in the video, I added the non tabular discount to the reserves before calculating the reserve charge, but I did not do this in the printed notes. This is a tricky topic, as this adjustment was removed from the syllabus in 2009, but it then appeared in one of the 2009 questions! So you may want to learn this adjustment. FYI, the Reserve Charge using this adjustment would be 56,841 instead of 54,000. Similarly, the Reserving risk for 2009, 32a would have been 113.7.
-Sample Q8: the factor should be dividing by 290, not 401. The answer is correct.

Schedule F:
-Sample Q1c: the solution should say that Reinsurance Written Off is retrospective, not prospective.

Schedule P:
-My equation for the right most column of Part 2 is incorrect. The notes are currently saying to add the incremental payments, but we should instead add the cumulative payments. So change the bottom of pg 9 to the following:
“The right most column is derived from the current year’s Part 1 & Part 3. It equals: Cumulative paid loss + Reserves
Where:
Cumulative paid loss is the right most column of the prior years row of Part 3
Reserves are derived from Part 1; Col 24 - (Col 21 - Col 22)
-I therefore need to modify Sample Q12. Please ignore this question for the time being.

Angelo Uncategorized

Porter, Williams, and Notecards

February 21st, 2010

I am working on the last piece to the regulation notecards and will have them by the end of the week. Also, I will post the problems that go with Porter for those that have already read the text. The outlines will be posted mid-March, along with Williams. I have a few more outlines to complete for Part 5 first. The videos will follow.

Just in case you haven’t noticed, the MP3 files are now available for download. Just click on the speaker icon next to the WMP icon next to each video.

I’m trying to stay up with emails, but the volume has increased. I will try to answer all future emails within 2 working days.

Good luck studying.

Ken

Ken Uncategorized