CAS Exam 6C Fall 2018, Question 29
Study guide: Exam 6C
Part a (0.5 points)
Define subsequent event according to the Canadian Institute of Actuaries (CIA) Standards of Practice.
Part b (1.5 points)
The AA of a company is valuing policy liabilities as at December 31, 2017. The report date is February 12, 2018. For each of the following scenarios, briefly discuss the actions that the AA should take.
- i. 30% of the company's gross claims liabilities are ceded to a reinsurer that becomes insolvent on January 15, 2018. The AA is aware of the insolvency on January 24, 2018. The insolvency is due to the gradual deterioration in the reinsurer's financial circumstances.
- ii. The AA receives notice on February 6, 2018 that the previously reported losses experienced a large change in value due to large loss events. The change in value was recorded in the insurance claims database in mid-January.
Answer this question and see the worked solution