CAS Exam 6C Fall 2018, Question 26

Study guide: Exam 6C

Justify whether each of the following propositions is accurate.

Part a (0.25 points)

MfADs should be the same for premium and claim liabilities.

Part b (0.25 points)

The MCT calculation considers diversification benefits between and within all risk components.

Part c (0.25 points)

If there is a premium deficiency, the booked Deferred Policy Acquisition Expenses (DPAE) must be 0.

Part d (0.25 points)

Flood insurance is not taken into account in the MCT calculation.

Answer this question and see the worked solution

Concepts tested

• MCT
• Deferred Policy Acquisition Expenses
• Premium Deficiency
• Diversification Credit
• Margin for Adverse Deviations
• Flood Insurance

More questions from this set

• CAS Exam 6C Fall 2018, Question 25
• CAS Exam 6C Fall 2018, Question 27