CAS Exam 6C Spring 2016, Question 18
Study guide: Exam 6C
The following is an extract from page 80.10 of a Canadian property and casualty insurance company's P&C-1 as of December 31, 2015. All amounts are in thousands of dollars ($000s).
| Deferred Commissions at beginning of year | Unearned Commissions at beginning of year | Commissions in respect of premiums written: Direct | Commissions in respect of premiums written: Reinsurance Assumed | Commissions in respect of premiums written: Reinsurance Ceded | Commissions in respect of premiums written: Net | Deferred Commissions end of year | Unearned Commissions end of year | Net Commissions attributable to the Period | |
|---|---|---|---|---|---|---|---|---|---|
| Automobile - total | 14,000 | ? | 10,000 | 1,000 | 4,000 | ? | 16,000 | ? | ? |
| Property - total | 16,000 | ? | 13,000 | ? | 5,000 | 10,000 | 19,000 | ? | ? |
| Total | 30,000 | ? | 23,000 | ? | 9,000 | ? | 35,000 | ? | ? |
Other financial information from page 80.10:
- Gross Contingent Commissions = 5,000
- Ceded Contingent Commissions = 2,000
- Gross Other Non-Deferrable Commissions = 3,000
- Ceded Other Non-Deferrable Commissions = 1,000
- Ceded Commission Income (Auto & Property Combined) = 11,000
Part a (2.25 points)
Calculate Total Net Commissions as it appears on page 80.10.
Part b (0.5 points)
Define non-deferrable commissions.
No current syllabus covers this question; it is kept for the record.
Answer this question and see the worked solution
Concepts tested
- Deferred Policy Acquisition Expenses
- Canadian Annual Return
- Reinsurance Accounting
- Financial Statements