Exam-Style Questions and Other Study Materials for Exam 5B

[G. Stolyarov II]

Greetings.

I have examined my old Exam 6 study guide (http://rationalargumentator.com/actuaryguide/6-study-guide.html) for exam-style questions that cover material relevant to the new Exam 5B. These questions have been compiled into the attached PDF file.

I have also established a central index page for all the study materials that I have available for this exam. It is accessible here: http://rationalargumentator.com/actuaryguide/5b-study-guide.html

Questions are welcome. Also, let me know if you find an error in any of the solutions or if you have a suggestion as to other problems that could be included.

Sincerely,
G. Stolyarov II

[Victor60]

Hello G. Stolyarov II,

In your problem S6-54-1 you give Case O/S=90,990, IBNR=40,440, and Ult Claims=120,111 for all AYs combined. Did you mean pure IBNR or left it out deliberately as an anxiety creating feature?

Thank you for posting your problems,

Victor

[G. Stolyarov II]

Hello G. Stolyarov II,

In your problem S6-54-1 you give Case O/S=90,990, IBNR=40,440, and Ult Claims=120,111 for all AYs combined. Did you mean pure IBNR or left it out deliberately as an anxiety creating feature?

Thank you for posting your problems,

Victor

Victor,

Thank you for your question. I do think that further specification regarding the nature of the IBNR in this problem is left out deliberately so as to avoid focusing on that here. Instead the intent is to focus, in part, on the role of the IBNR in calculating the ULAE reserve. I modeled this problem after Problem 14 on the 2009 Exam 6, where the item in question was also described simply as "IBNR".

As far as I am aware, any definition of IBNR will work with these methods, since IBNR is always defined to be exclusive of the known case reserve.

Sincerely,
G. Stolyarov II

[Marisha]

Hi,

going through your exam-type questions, i ran across "least square" development method and Adler-Kline claim-closure projections. Are these things on the exam? i thought least square was brosius, which is not on the exam, and Adler-Kline is the disposal rate technique, except with disposal rates calculated differently from what Friedman has in his book.

thanks,

Marina

[G. Stolyarov II]

Hi,

going through your exam-type questions, i ran across "least square" development method and Adler-Kline claim-closure projections. Are these things on the exam? i thought least square was brosius, which is not on the exam, and Adler-Kline is the disposal rate technique, except with disposal rates calculated differently from what Friedman has in his book.

thanks,

Marina

Marina,

The Brosius least-squares method will not be on Exam 5B, though it is a good idea to study for Exam 7. This exam-style problem was adapted from a past exam question that had multiple parts. Most of the parts refer to material still on the Exam 5B syllabus.

The Adler-Kline method is just another name for a frequency-severity technique. You could do this problem with disposal rates as calculated by Friedland, or by finding development factors for claim counts at each age of development. (Note that the factors are the same for the same age of development for each accident year.)

Sincerely,
G. Stolyarov II