Feldblum Statutory Surplus

[7mm Pencil]

I have noticed a few typos in this paper but wanted to get some opinions on one of them. Page 9, the last paragraph of the DPAC and Premium Deficiency Reserve section. It states that by Dec 2004, incurred losses are 65 million and the expected losses associated with the unexpired portion of the policies are 45 million. The unearned premium is 50 million which means that the equity in the unearned premium is 5 million. The DPAC asset should therefore be reduced from 10 million to 5 million because the DPAC asset cannot exceed the equity in the unearned premium. The paper suggests that the DPAC asset be reduced to 0 and a premium deficiency reserve of 15 million is set up on the GAAP statements. I don't think this is correct. Anybody agree?

It would be correct if he switched the 65 million and 45 million incurred losses around (45 million incurred by Dec 2004, and 65 million expected in the next 6 months).

Just want to make sure I'm understanding this.

[carrytheCrøss]

You are not alone in believing this:

http://www.actuarialoutpost.com/actuarial_discussion_forum/showthread.php?t=51664&highlight=feldblum+statutory+surplus

By the way, I believe you meant to post this thread in 7-US section.

[Darkness Falls]

You are not alone in believing this:

http://www.actuarialoutpost.com/actuarial_discussion_forum/showthread.php?t=51664&highlight=feldblum+statutory+surplus

By the way, I believe you meant to post this thread in 7-US section.

No, us Canucks can't escape Feldblum even when we have our own exam. Though Statutory Surplus is the only paper from him.

[carrytheCrøss]

:oops: My mistake. Wow, I had no idea.

Feldblum is everywhere!

By the way, how's the studying going, Darkness Falls?

[BabyPeach]

How likely do you guys think it is that we'll be tested on the US accounting?

[Aces Wild]

I have noticed a few typos in this paper but wanted to get some opinions on one of them. Page 9, the last paragraph of the DPAC and Premium Deficiency Reserve section. It states that by Dec 2004, incurred losses are 65 million and the expected losses associated with the unexpired portion of the policies are 45 million. The unearned premium is 50 million which means that the equity in the unearned premium is 5 million. The DPAC asset should therefore be reduced from 10 million to 5 million because the DPAC asset cannot exceed the equity in the unearned premium. The paper suggests that the DPAC asset be reduced to 0 and a premium deficiency reserve of 15 million is set up on the GAAP statements. I don't think this is correct. Anybody agree?

It would be correct if he switched the 65 million and 45 million incurred losses around (45 million incurred by Dec 2004, and 65 million expected in the next 6 months).

Just want to make sure I'm understanding this.


I would agree. Otherwise I am unable to understand the amounts he computes.