CCIR

Question 1

Incurred Claim for AY

Answer 1

= Amounts paid during year
+ Unpaid claims for AY at end of current year
- Investment income from UCAE & IBNR for the AY from
beg to end of current year

Question 2

Expense Ratio

Answer 2

= [(Gross Commission - Ceded Commission)
+ Taxes
+ Others
+ General Expenses]/NEP

Acquisition = Gross Commission - Ceded Commission + Taxed + Others

Question 3

Net Investment Income from Insurance Operation

Answer 3

= Lesser of 
   Investment Yield * Sum of Averages of 
       \+ Net Unpaid Claims & LAE
       \+ Net Unearned Premiums
       \+ Unearned Commissions
       \+ Premium Deficiency
       - DPAE
       - Receivables
       - Instalment Premiums

Net Investment Income

Question 4

Agents & Brokers balance & Amounts due from Subsidiaries & Associates as % of Adjusted Equity

Answer 4

= (Receivables from Unaffiliated Agents & Brokers
+ Receivables from Subsidiaries & Associates)
/ Adjusted Equity

Question 5

Investment Yield

Answer 5

= (Net Investment Income + OCI)/
   (0.5* Invested Asset Beg  
    \+0.5 * Invested Asset End            
    - Net Investment Income 
    - OCI)

Invested Assest = Cash + Investment Income due & accrued + Total Investments

Question 6

Total UW Revenue

Answer 6

= Net EP + Service Charges

Question 7

Underwriting Income (Loss)

Answer 7

= Total UW Revenue - Total Claims & Expenses - Premium Deficiency Adjustments

Question 8

Net Investment Income from Investment Operation

Answer 8

= Investment Operations Income
+ Investment Operations Realized Gains (Loss)
- Investment Operations Expense

Question 9

Net Income b/f Taxes

Answer 9

= U/W Income (Loss) + Net Investment Income
+ Income from Ancillary Operations
+ Share of Net Income (Loss) from Subsidiaries, Associates & Joint Ventures
+ Gain(Loss) from fluctuations in Foreign Exchange Rates
+ Other Revenue
- Financial Costs
- Other Expense

Question 10

Net Income After Taxes

Total Income Taxes

Answer 10

Net Income After Taxes
= Net Income b/f Taxes - Total Income Taxes

Total Income Taxes
= Current Income Taxes + Deferred Income Taxes

Question 11

Net Increase(decrease) in retained earning

Answer 11

= Net Income/Loss for the year - Dividends Declared to PH - Increase in Reserves Required

Question 12

Retained Earning (end)

Answer 12

= Retained Earning (beginning) 
\+ Prior Year Adjustment
[+ Net Income for the Year
- Dividends to Shareholders
\+ Decrease (Increase) in Reserves]

[ ] = Retained Earning in current year

Question 13

Notice a claim with incurred amount of $1 million & SIR of 0.1 million was not recorded in balance sheet
Impact to balance
Conditions of an SIR receivable admissible for statutory test purpose
How regulator ensures the condition is met

Answer 13

Other recoverables on unpaid claims - 0.1 mill
Unpaid claims and adjustment expense - 0.9 mill
Other Liabilities - 0.1 mill
Total Equity - reduced by 0.9 mill

For an SIR receivable to be admissible, regulators need to be satisfied with its collectibility, ie the PH is solvent and has proven ability to pay the retention

can request acceptable collateral

Question 14

Total Equity

Answer 14

= Shares Issued and paid 
\+ Retained Earning 
\+ Contribution Surplus 
\+ Reserves 
\+ Accumulated other comprehensive income

= Total Equity(last yr) + NI(current yr)

Question 15

Net Commission (80.10)

Commission Expense (80.10)

Commission Income (80.10)

Answer 15

Net Commission = (Beginning Deferred - Ending Deferred) - (Beginning Unearned-Ending Unearned) + NCPW
Net Commission on Premium Written (NCPW) = Direct + Assumed - Ceded

Commission Expense= (Beginning Deferred - Ending Deferred) + Direct + Assumed

Commission Income= (Beginning Unearned - Ending Unearned) + Ceded

Question 16

Total Commission (Acquisition Expenses : commission) (20.30)

Answer 16

Total Net Commission = Net Commission + Net Contingent Commissions + Other Non-deferrable

Total Gross Commission = Commission Expense + Gross Contingent Commission + Gross Other Non-deferrable

Total Ceded Commission = Commission Income + Ceded Contingent Commission + Ceded Other Non-defferable