CAS Exam 6C Spring 2019, Question 12
Study guide: Exam 6C
An insured has the following policies and outstanding claims with an insolvent insurance company.
| Insurance coverage | Effective Date | Expiration Date | Full-Term Premium | Deductible | Date of Loss |
|---|---|---|---|---|---|
| Homeowner | January 1, 2018 | December 31, 2018 | $1,000 | $1,000 | February 1, 2018 |
| Mortgage | January 1, 2018 | December 31, 2018 | $600 | $0 | February 1, 2018 |
A winding-up order is made in respect of the insurance company for March 31, 2018.
Part a (1.25 points)
Calculate the insured's recovery from PACICC.
Part b (0.5 points)
Assuming a distribution of $50,000 is made by the liquidator of the insolvent insurance company, provide an explanation as to the amount of additional recovery the insured will receive.
Part c (0.5 points)
Briefly describe two ways PACICC can obtain funding.
Answer this question and see the worked solution