CAS Exam 6C Fall 2016, Question 14
Study guide: Exam 6C
The following information is available about a property and casualty insurance company. All amounts are in thousands of dollars ($000s).
| Accident Year | Net APV as of December 31, 2014 | Net APV as of December 31, 2015 | Paid in Calendar Year 2015 |
|---|---|---|---|
| 2012 | 2,500 | 2,000 | 600 |
| 2013 | 4,500 | 3,800 | 650 |
| 2014 | 5,000 | 4,000 | 1,200 |
| 2015 | 5,300 | 5,000 |
| Item | December 31, 2014 | December 31, 2015 |
|---|---|---|
| Unearned Premiums Reserve | 4,000 | 4,500 |
| Premium Deficiency Provision | 500 | 100 |
| Unearned Commissions | 1,000 | 1,200 |
| Policyholders Receivables | 0 | 200 |
Yield rate: 5%
Part a (0.75 points)
Calculate the investment income attributable to insurance operations.
Part b (0.5 points)
Calculate the Excess (Deficiency) amount in calendar year 2015.
Answer this question and see the worked solution
Concepts tested
- Excess (Deficiency) Ratio
- Canadian Annual Return
- Reserve Adequacy
- Loss Reserve Discounting
- Unpaid Claims