CAS Exam 6C Fall 2014, Question 20
Study guide: Exam 6C
The following information is available for a property and casualty insurance company's December 31, 2013 P&C-1:
| Assets | Current Year | Prior Year |
|---|---|---|
| Total Investments | 315,000 | 275,000 |
| Receivables: Unaffiliated Agents and Brokers | 10,000 | 8,000 |
| Receivables: Policyholders | 5,000 | 4,500 |
| Receivables: Instalment Premiums | 1,000 | 2,000 |
| Receivables: Other Insurers | 2,000 | 1,500 |
| Recoverable from Reinsurers: Unearned Premiums | 50,000 | 40,000 |
| Recoverable from Reinsurers: Unpaid Claims and Adjustment Expenses | 150,000 | 135,000 |
| Deferred Policy Acquisition Expenses | 14,000 | 12,000 |
| Liabilities | Current Year | Prior Year |
|---|---|---|
| Payables: Agents and Brokers | 1,500 | 1,000 |
| Payables: Policyholders | 500 | 500 |
| Payables: Other Insurers | 9,000 | 8,000 |
| Unearned Premiums | 90,000 | 70,000 |
| Unpaid Claims and Adjustment Expenses | 285,000 | 260,000 |
| Unearned Commissions | 3,000 | 2,000 |
| Premium Deficiency | 0 | 0 |
| Statement of Income | Current Year | Prior Year |
|---|---|---|
| Total Underwriting Revenue | 50,000 | 35,000 |
| Underwriting Income (Loss) | (20,000) | 5,000 |
| Net Investment Income | 10,000 | 8,000 |
| Total Income Taxes | 1,000 | 2,000 |
| Net Income (Loss) for the Year | (11,000) | 11,000 |
Calculate the investment income attributable to the policy liabilities as at December 31, 2013.
Part a (1.25 points)
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