CAS Exam 6C Spring 2018, Question 25
Study guide: Exam 6C
The AA has valued the policy liabilities as at December 31, 2017. The report date is February 21, 2018.
For each of the following material events, justify whether it is a subsequent event as defined by the Canadian Institute of Actuaries (CIA), and explain the actions the AA should take.
- i. There was a significant increase in fixed income yields on January 20, 2018, decreasing the value of the insurance company's investments by 20%.
- ii. A catastrophic winter storm took place on February 2, 2018. The catastrophe is expected to impact up to 10% of the insurance company's customers.
- iii. On February 28, 2018, it was discovered that the incorrect loss development factors were used in the estimation of claim liabilities. The total policy liabilities are underestimated by 5%.
Part a (2.25 points)
Answer this question and see the worked solution