CAS Exam 6C Spring 2014, Question 21
Study guide: Exam 6C
The Property and Casualty Minimum Capital Test Advisory Committee (P&C MAC) has outlined a vision for new principles-based solvency financial requirements. Insurers that choose to develop models will calculate their regulatory asset requirement on two bases: at a target level (i.e., regulatory target asset requirement or TAR) and at a minimum level (i.e., regulatory minimum asset requirement or MAR).
Part a (0.5 points)
Briefly describe the purpose of MAR and TAR.
Part b (1 point)
Briefly describe the risk measures that underlie:
- i. MAR
- ii. TAR
- iii. The BCAR model
- iv. Solvency II
Part c (1 point)
The P&C MAC describes the core concepts that the future P&C insurer's solvency framework should cover. Briefly describe four of these concepts.
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