CAS Exam 6C Fall 2016, Question 24

Study guide: Exam 6C

Justify whether each of the following propositions is accurate.

Part a (0.5 points)

The Actuarial Present Value (APV) of claims liabilities is always smaller than the undiscounted claims liabilities.

Part b (0.5 points)

A. M. Best's financial strength rating given to a company mainly reflects the level of credit risk that this company is facing.

Part c (0.5 points)

The diversification credit of the MCT formula considers the correlation between credit risk and market risk.

Part d (0.5 points)

The Chief Financial Officer of a Canadian property and casualty insurance company can also hold the position of Appointed Actuary.

Part e (0.5 points)

The ORSA process should be used to help insurers set their Internal Capital Target.

Answer this question and see the worked solution

Concepts tested

• Diversification Credit
• Rating Agency
• Appointed Actuary
• ORSA
• Internal Target Capital Ratio
• Margin for Adverse Deviations

More questions from this set

• CAS Exam 6C Fall 2016, Question 23
• CAS Exam 6C Fall 2016, Question 25