CAS Exam 6C Spring 2016, Question 22

Study guide: Exam 6C

Part a (0.75 points)

Briefly describe three reasons why insurers maintain credit ratings with rating agencies.

Part b (0.5 points)

Briefly describe two measures taken by rating agencies to ensure consistent ratings across insurance companies.

Part c (1.5 points)

Describe how the following approaches are used by rating agencies to determine economic capital:

• i. Expected policyholder deficit
• ii. Stochastic cash flow capital models
• iii. Principles-based systems

Answer this question and see the worked solution

Concepts tested

• Rating Agency
• Risk Capital
• Principles-Based Regulation

More questions from this set

• CAS Exam 6C Spring 2016, Question 21
• CAS Exam 6C Spring 2016, Question 23