CAS Exam 6C Fall 2014, Question 15

Study guide: Exam 6C

Earthquake Exposure Sound Practices sets out OSFI's expectations for policies and procedures applicable to insurers that have material earthquake exposure.

Part a (0.75 points)

Briefly describe three best practices that insurers are expected to have in order to ensure that their earthquake models are appropriately used.

Part b (1.5 points)

Identify and briefly describe three considerations when calculating the Probable Maximum Loss (PML).

Part c (0.5 points)

Other than Earthquake Reserves, identify two other financial resources that an insurer can use to support its gross PML exposure.

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Concepts tested

• Probable Maximum Loss
• Earthquake Reserves
• Earthquake Exposure Risk Margin
• Catastrophe Modelling
• Model Risk

More questions from this set

• CAS Exam 6C Fall 2014, Question 14
• CAS Exam 6C Fall 2014, Question 16