R4 Flashcards

1
Q

R4 generated from risk associated with

A

Reinsurance recoverable
Unpaid loss and LAE
Excessive premium growth
AH claim reserves

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

Company RBC %

A

Straight average of industry reserve RBC % and industry reserve RBC % adjusted for company experience

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

Industry RBC %

A

Provided by NAIC; ratio of net incurred loss and DCC development during the year to the net loss and DCC reserves from the prior year

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

Company development factor

A

(Sum of prior 9 AY loss and DCC in current year)/(Sum of initial valuations of same AYs); capped at 400%

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

Should not make company adjustment for Company RBC% if

A

Initial or current values are < 0

History is not long

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Loss sensitive discount

A

Loss sensitive discount factor * Percent loss sensitive reserves

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Loss sensitive discount factor

A

Direct: 30%; Assumed: 15%; assumed is lower because commissions are loss sensitive (offset)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Loss concentration factor

A

0.3 * max(Line % of loss & LAE reserves to total) + 0.7

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Excessive premium growth

A

3 year average growth rate in GWP exceeding 10% (each year over year capped at 40%)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Average growth rate factor

A

Min(Max[Average growth over 3 years, 0.1],0.4) - 0.1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Excessive premium growth RBC charge

A

Average growth rate factor * 0.45 * net loss and LAE reserves

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Base loss and LAE reserve RBC by line

A

[(Company RBC% + 1) * Adjustment for income - 1] * Net LLAE reserve; reserve from P1, gross of non-tabular discounts, net of tabular

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

R4 intended to measure

A

Risk that reserves will develop adversely

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Before using reserve amounts in RBC calculations

A

Should be gross of non-tabular discount (balance sheet is net)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Discount for retrospectively-rated policies

A

0.3

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