CAS Exam 6C Spring 2016, Question 20
Study guide: Exam 6C
Part a (2 points)
Fully discuss the potential effect of a transfer of insurance business with an unregistered reinsurer to a registered reinsurer on the components of the MCT formulae.
Part b (1.25 points)
Fully describe how the capital required for off-balance sheet exposures is calculated in the MCT formulae.
Part c (0.5 points)
Explain the purpose of the diversification credit in the MCT calculation.
Answer this question and see the worked solution
Concepts tested
- Unregistered Reinsurance
- Registered Reinsurance
- MCT
- Credit Risk Margin
- Capital Available
- Diversification Credit