CAS Exam 6C Fall 2018, Question 19
Study guide: Exam 6C
The following Probable Maximum Loss (PML) outputs from an earthquake model are available as at December 31, 2017. All amounts are in millions of dollars.
| Retention Period | Eastern Canada | Western Canada |
|---|---|---|
| 100 years | 50 | 200 |
| 250 years | 150 | 400 |
| 500 years | 600 | 800 |
Part a (1 point)
Assuming that the company uses the phase-in formula, calculate the MCT Earthquake Reserves as at December 31, 2017.
Part b (2 points)
Describe four key principles identified by Office of the Superintendent of Financial Institutions (OSFI) to assist insurers in developing prudent approaches to managing earthquake risk.
Answer this question and see the worked solution