notes to financial statemenets (odormirok) Flashcards

1
Q

Notes to financial statements (direct involvement w/ actuary) CARD-PDR

A
  1. Change in (prior AY) incurred L&LAE
  2. Asbestos (environmental) reserves
  3. Reinsurance
  4. Discounting (reserves)
  5. Premium Deficiency Reserve (UEP not sufficient to cover losses)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Change in (prior AY) incurred L&LAE

importance

disclose (2)

A
  • Important: impacts current CY UW income
  • changes in multiple years = issue with reserving process
  • Disclose: ∆ in prior AY incurred L&LAE
  • reasons for ∆
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Asbestos (environmental) reserves

importance

disclose (4)

A
  • Important: causes adverse development
  • Disclose: does exposure exist?
  • 5 years of rsvs
  • rsv methods
  • LOB impacted
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Reinsurance

importance

disclosures (4)

A
  • Important: credit risk not shown on balance sheet, abusing surplus aid to inflate surplus? can lower B/S rsv
  • Disclose: section A – unsecured (why unsecure? cat cause this? concentrated w/ 1 reinsurer?)
  • Disclose: section B – disputed (why disputed? Is amt material? )
  • Disclose: section D – uncollectible (why uncollectible? potentially more uncollectible?)
  • Disclose: Commutations (reinsurer name, L&LAE each yr, EP each yr)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Premium Deficiency Reserve (means UEP not sufficient to cover losses)

importance

disclose

A
  • Important: this note is only way to know if PDR exists (if PDR is recorded as UEP & not write-in liability)
  • Disclose: investment income considered in calculating PDR?
  • amount of PDR
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Notes to financial statements (relevant to actuary) SHIES

A
  1. Summary of accounting principles
  2. High Deductibles (pay full claim & owed reimbursement for deductible)
  3. Intercompany pooling
  4. Events subsequent
  5. Structured Settlement (buy annuity from life ins co to pay losses)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Summary of accounting principles

disclose

A
  • Important: none listed
  • Disclose: source of rules
  • exceptions to rules
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

High Deductibles (pay full claim & owed reimbursement for deductible)

importance

disclose

A
  • Important: credit risk not shown on balance sheet
  • Disclose: amt recorded
  • amt billed but not collected
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Intercompany pooling

importance

disclose

A
  • Important: impacts Schedule F & Schedule P (P only shows pool members %s)
  • Disclose: all details in pooling arrangement (lead co, participant cos., %s, state)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Events subsequent

importance

disclose (2)

A
  • Important: occurred before BS was issued BUT after balance sheet date
  • Disclose: Type I amt IF not reflected in balance sheet recognized (Foreseeable) conditions existed at balance sheet date
  • Disclose: Type II amt IF not reflected in balance sheet & IF material NonRecognized (Unforeseeable) conditions DID NOT exist at balance sheet date
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Structured Settlement (buy annuity from life ins co to pay losses)

importance

disclose (2)

A
  • Important: credit risk not shown on balance sheet
  • Disclose: total pmts from all life insurers for which liability still exists
  • Disclose: insurer name & pmt amt (IF pmt > 1% of surplus)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is run off agreement?

how is run off agreement recorded in financial statements?

A

run-off agreement: keep liability until x date or polices cancel + transfer book to another co

recorded: paid loss + decrease rsvs IF rsvs transferred > paid loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly