CAS Exam 6C Fall 2019, Question 18
Study guide: Exam 6C
The following information is available for a federally regulated property and casualty insurance company. All amounts are in thousands of dollars ($000s).
| 20.10 – Assets | 2018 | 2017 |
|---|---|---|
| Recoverable from reinsurers – Unearned premiums | 6,000 | 5,800 |
| Recoverable from reinsurers – Unpaid claims and adjustment expenses | 16,500 | 16,000 |
| Deferred policy acquisition expenses | 9,000 | 8,700 |
| Receivable from agents and brokers, policyholders and instalment premiums | 40,000 | 35,000 |
| 20.20 – Liabilities and Equity | 2018 | 2017 |
|---|---|---|
| Unearned premiums | 60,000 | 58,000 |
| Unpaid claims and adjustment expenses | 184,500 | 179,000 |
| Unearned commissions | 1,250 | 1,100 |
| Premium deficiency | 0 | 0 |
Net cumulative paid:
| Accident Year | 12 | 24 | 36 |
|---|---|---|---|
| 2016 | 24,000 | 58,000 | 75,000 |
| 2017 | 26,000 | 65,000 | |
| 2018 | 30,000 |
Net actuarial present value ultimate:
| Accident Year | 12 | 24 | 36 |
|---|---|---|---|
| 2016 | 172,000 | 170,000 | 175,000 |
| 2017 | 189,000 | 195,000 | |
| 2018 | 198,000 |
Other information:
- Assume that the net investment income from insurance operations is less than the net investment income plus share of net income (loss) of pooled funds using the equity method.
- The net investment income from insurance operations is 5,200.
Calculate the cumulative discounted excess/(deficiency) ratio for accident year 2017 as at December 31, 2018.
Part a (2.25 points)
Answer this question and see the worked solution