CAS Exam 6C Fall 2014, Question 32
Study guide: Exam 6C
Part a (0.25 points)
Define the term "subsequent event."
Part b (1.5 points)
The Appointed Actuary (AA) of a property and casualty insurance company is valuing policy liabilities as at December 31, 2013. The report date is February 20, 2014. For each of the following scenarios, identify and briefly explain the actions that the AA should take.
- i. The stock market drops by 30% between January 2, 2014 and January 31, 2014. Common shares make up 50% of the company's investment portfolio as at December 31, 2013.
- ii. The company receives a general liability claim notice from a policyholder on February 1, 2014. The claim occurred on December 8, 2013 and the initial case reserve is set at $500,000.
- iii. On March 15, 2014, the AA is notified that the claims from the last two weeks of December 2013 were missing in the database that the actuary used for the reserve analysis. The error has been corrected as of March 14, 2014.
Answer this question and see the worked solution