View Full Version : CAS 9 2006
chic squirrel
11-02-2006, 05:05 PM
I thought this exam was BAD!!!! It was long and there were questions that were weird!!!
If anyone tells me the passmark is going to be greater than 62-63 I will scream!
NeedaBreak
11-02-2006, 05:14 PM
I'll stick with this post because I too didn't feel the exam was a straight-forward as others, on other posts, seem to. I think the writers are doing a good job getting more to the heart of understanding the material - questions that make you go "hmmm." But since I was spending so much time going "hmmm" I wasn't overly pleased with the exam.
Warren Schmidt
11-02-2006, 05:18 PM
I'll stick with this post because I too didn't feel the exam was a straight-forward as others, on other posts, seem to. I think the writers are doing a good job getting more to the heart of understanding the material - questions that make you go "hmmm." But since I was spending so much time going "hmmm" I wasn't overly pleased with the exam.
I agree....I think they stuck to the heart of understanding the material, and not asking obscure, random stuff. But they thought up a lot of tricky questions, this time around, it seemed.....
NeedaBreak
11-02-2006, 05:20 PM
Heard many people at my site say they didn't answer all the questions so the tricks slowed everyone down, it seems. That's good news for some, I'm sure. My head is killing me still!
GefilteFish144
11-02-2006, 05:23 PM
Heard many people at my site say they didn't answer all the questions so the tricks slowed everyone down, it seems. That's good news for some, I'm sure. My head is killing me still!
I've done enough of these exams to know when to just give up and scribble a few notes about how to go about solving these things. Like that insurance charge question where they gave the formula for Phi (r). I remember doing a couple of those in All10, but they hadn't been asked for years.
MUAct
11-02-2006, 05:32 PM
I think this one was longer. I finished 2004 and 2005 within 3 hours but did not finish this exam - leaving 2 questions blank.
Da Bears!
11-02-2006, 05:45 PM
I was very surprised that I did not have trouble finishing this one. I felt ok going through the whole thing. But when I looked back through the exam a second time, I didn't feel too confident about how I approached some questions. I didn't draw a blank on any questions like I feared, but many didn't seem to have a clear solution that ever came too me. Definitely an odd exam.
I was particularly perplexed by #12 (I think...). Part a asked you to calculate the profit provision using the PV offset method. Then part b asked what discount rate was used to discount losses. I had to figure out the discount rate FIRST, and THEN calculate the profit provision. Sounds like that question was asked kinda backwards. Oh well.
GefilteFish144
11-02-2006, 05:49 PM
I was particularly perplexed by #12 (I think...). Part a asked you to calculate the profit provision using the PV offset method. Then part b asked what discount rate was used to discount losses. I had to figure out the discount rate FIRST, and THEN calculate the profit provision. Sounds like that question was asked kinda backwards. Oh well.
You're the 3rd person (including myself) who has said that so far.
chic squirrel
11-02-2006, 05:54 PM
There were other weird ones as well-one in which the IRR was given to be 12% and another one in which 3 scenarios had to be compared-I left both of these blank! Needless to say I am not in a good mood right now!!
NeedaBreak
11-02-2006, 05:58 PM
There were other weird ones as well-one in which the IRR was given to be 12% and another one in which 3 scenarios had to be compared-I left both of these blank! Needless to say I am not in a good mood right now!!
I'm in agreement all the way. I think I left that scenario comparison blank too.
And as far as your original post, I think a pass mark as high as the previous couple would be amazing just based on what I've read here so far.
GefilteFish144
11-02-2006, 06:02 PM
There were other weird ones as well-one in which the IRR was given to be 12% and another one in which 3 scenarios had to be compared-I left both of these blank! Needless to say I am not in a good mood right now!!
I'm in agreement all the way. I think I left that scenario comparison blank too.
And as far as your original post, I think a pass mark as high as the previous couple would be amazing just based on what I've read here so far.
Got the scenario one (I think), but had to cross things out several times to get it done, like when it hit me that the surplus was supposed to go down when the reserves increased. If it hadn't been for that P/S chart I would have been way off. Was an interesting question, but from an exam standpoint I don't see the point in making students do the Ferrari equation 3 times.
twk85
11-02-2006, 06:05 PM
I was particularly perplexed by #12 (I think...). Part a asked you to calculate the profit provision using the PV offset method. Then part b asked what discount rate was used to discount losses. I had to figure out the discount rate FIRST, and THEN calculate the profit provision. Sounds like that question was asked kinda backwards. Oh well.
You're the 3rd person (including myself) who has said that so far.
I got (a) first before getting (b). The new answer that we are required to find is a multiple of the given one.
Warren Schmidt
11-02-2006, 06:09 PM
You're the 3rd person (including myself) who has said that so far.
I got (a) first before getting (b). The new answer that we are required to find is a multiple of the given one.
I saw the same thing. While most people probably got the answer to b first, then got a, you could also answer a, without b, by seeing that the difference between WC and the reference line was 3 times the difference of Auto and the referenced line, thus 3 * .5% or 1.5% offset, giving you a pp of 3.5%.
chic squirrel
11-02-2006, 06:22 PM
what answer did you get for the M for the GL policy-did you calc ARULL for the CM year in the exp period? I first didnt-was ending up with a negative M so included the CM year in the ARULL-they did give the LDF for that year.
Warren Schmidt
11-02-2006, 06:28 PM
what answer did you get for the M for the GL policy-did you calc ARULL for the CM year in the exp period? I first didnt-was ending up with a negative M so included the CM year in the ARULL-they did give the LDF for that year.
I thought that ARULL is only applied to occurence years (so only 2 out of 3 years used it) but I could be wrong?
NeedaBreak
11-02-2006, 06:30 PM
what answer did you get for the M for the GL policy-did you calc ARULL for the CM year in the exp period? I first didnt-was ending up with a negative M so included the CM year in the ARULL-they did give the LDF for that year.
I got something like 1.25 for AER and since EER was .99, my M was nowhere near negative. I don't remember the final answer.
GefilteFish144
11-02-2006, 06:30 PM
what answer did you get for the M for the GL policy-did you calc ARULL for the CM year in the exp period? I first didnt-was ending up with a negative M so included the CM year in the ARULL-they did give the LDF for that year.
I thought that ARULL is only applied to occurence years (so only 2 out of 3 years used it) but I could be wrong?
You're right, no loss development on C-M. I think I got somewhere around 24% debit.
statmathcat
11-02-2006, 06:31 PM
I was starving middle of the exam, then my brain power shut down on me.
I agree that some of the problems requires some thinking and I also left a few blanket, which I am sure if I have 10 more minutes I can write down some formula to earn at least partial credit.
Overall I think the exam is fair. I am just too happy that it is over!!:toast:
bg23516
11-02-2006, 06:33 PM
Same here.. put in a note that said there should be no LDF for CM years... Got .990 EER, .87 Cred (?), and a debit mod of around 24.4%.
I used the Table A for detrend and ignored their inflation information. Not sure if that was right.
NeedaBreak
11-02-2006, 06:35 PM
Same here.. put in a note that said there should be no LDF for CM years... Got .990 EER, .87 Cred (?), and a debit mod of around 24.4%.
I used the Table A for detrend and ignored their inflation information. Not sure if that was right.
Noticed the trend too and ignored it.
Warren Schmidt
11-02-2006, 06:41 PM
Same here.. put in a note that said there should be no LDF for CM years... Got .990 EER, .87 Cred (?), and a debit mod of around 24.4%.
I used the Table A for detrend and ignored their inflation information. Not sure if that was right.
Noticed the trend too and ignored it.
I quickly compared the 6% trend they gave to what was in the Table A detrend, and a 6% trend pretty much got you the detrend factors that were already in the Table.
GefilteFish144
11-02-2006, 06:47 PM
Same here.. put in a note that said there should be no LDF for CM years... Got .990 EER, .87 Cred (?), and a debit mod of around 24.4%.
I used the Table A for detrend and ignored their inflation information. Not sure if that was right.
My only question was which LDF to use. I went with the 18-month ones because they were the first ones I saw, but after the fact I realized that maybe I should have used the 24-month ones instead. Didn't bother to correct it; quarter point deduction at most.
bg23516
11-02-2006, 06:53 PM
That was why I used their LDFs for everything except the CM year.
Same here.. put in a note that said there should be no LDF for CM years... Got .990 EER, .87 Cred (?), and a debit mod of around 24.4%.
I used the Table A for detrend and ignored their inflation information. Not sure if that was right.
My only question was which LDF to use. I went with the 18-month ones because they were the first ones I saw, but after the fact I realized that maybe I should have used the 24-month ones instead. Didn't bother to correct it; quarter point deduction at most.
I put an assumption in that the losses were valued as of June 30, and then used 30 and 42 month factors. Also, I used the detrend factors in the manual and ignored the 6%.
I thought it was an ok exam, even though I left about 3 questions completely blank. I just ran out of time. I think that of the three, there was one that I could have done completely, if I had time. Really a long exam, with a lot of calculations. This is one exam that (hopefully) I will not obsess over, and just wait the 7 or 8 weeks. I feel like, overall, I did as well as I could have hoped. I didn't choke and draw blanks of stuff that I knew. Just have to wait and see if it was enough. (Don't really think it was though, given the trend toward higher pass mark).
I also started at the end, so hopefully those big point questions will help.
bg23516
11-02-2006, 07:16 PM
I also left 3 or 4 questions blank or nearly blank because of time.
I'll stick with this post because I too didn't feel the exam was a straight-forward as others, on other posts, seem to. I think the writers are doing a good job getting more to the heart of understanding the material - questions that make you go "hmmm." But since I was spending so much time going "hmmm" I wasn't overly pleased with the exam.I concur. This exam had some good questions that made you think, but they didn't give enough TIME to think :wall:
Noticed the trend too and ignored it.
I quickly compared the 6% trend they gave to what was in the Table A detrend, and a 6% trend pretty much got you the detrend factors that were already in the Table.
I checked that too.
I got .88 cred, EER .991, MSL 205705 (or something).
I used the LDF for the CM ( :duh: ), panic.
I had a debit of around 30-something (b/c of the extra ARULL)
shoots.
NeedaBreak
11-02-2006, 08:07 PM
I also left 3 or 4 questions blank or nearly blank because of time.
Okay, so quick survey. How many points do the rest of you know you missed - left blank or totally whiffed on?
For me, at least 8 points.
bg23516
11-02-2006, 08:10 PM
Given that it was 3-4 questions, probably 12 points.
I also left 3 or 4 questions blank or nearly blank because of time.
Okay, so quick survey. How many points do the rest of you know you missed - left blank or totally whiffed on?
For me, at least 8 points.
I did not leave anything blank, but I think I have around 5-8 points of "put something down and pray you hit a buzzword".
I'll know better by Sunday (I have my exam booklet coming back priority mail :geek:)
Between 6 and 7 points. I blanked three questions, but lucky for me they were small ones. Two of them, I wouldn't have been able to answer if I had had all year.
I did not leave anything blank, but I think I have around 5-8 points of "put something down and pray you hit a buzzword".:eek: Do you mean, there's some other way we're supposed to answer the short answer questions? :confused:
chic squirrel
11-02-2006, 08:18 PM
I left 12-15 points too-this looks worse and worse for me.Its going to be a long wait-atleast till I get the question paper back.At best, I'll scrape through if I'm lucky!UGH!!!!!!!!
actuary_zhang
11-02-2006, 09:57 PM
I left about 8 points( didn't even have time to say hello to them). However, I don't think the exam very tricky, but time is really a significant weakness for me.
actuary_zhang
11-02-2006, 10:04 PM
I was very surprised that I did not have trouble finishing this one. I felt ok going through the whole thing. But when I looked back through the exam a second time, I didn't feel too confident about how I approached some questions. I didn't draw a blank on any questions like I feared, but many didn't seem to have a clear solution that ever came too me. Definitely an odd exam.
I was particularly perplexed by #12 (I think...). Part a asked you to calculate the profit provision using the PV offset method. Then part b asked what discount rate was used to discount losses. I had to figure out the discount rate FIRST, and THEN calculate the profit provision. Sounds like that question was asked kinda backwards. Oh well.
That question is the a stupid one as it is testing you like a child. Upon my opinion, it requires you to get the answer for (a) without solving the interest rate, and in fact it can be done that way. But it sounds stupid as we can easily solve for the interest rate and use it to discount the payout pattern.
tommie frazier
11-02-2006, 10:14 PM
i am with the majority here. nothing too crazy hard, but the trickiness required to make them not all cookie-cutter basic versions of the main concepts takea lot out of your time budget.
i goofed the lee diagram, and am mad at myself for that. it was easy, bc it's a lee diagram and they are all easy. but a 3-piece function when two would accomplish the same? have they learned nothing about taking something past the reasonable level?oh well.
I was confident last year, and found mself writing this again. so, let'sjust say I'll have to wait and see this time. I left about 8-10 points worth of stuff blank, and felt good about most other stuff I did. probably another 8-15 that was maybe fishy. leaves me...hoping, like everyone else.
shtroumpf22
11-02-2006, 10:42 PM
I had some hard time with Retro Rating problems... more than with past exams. When I tried 2004 & 2005, Individual Risk Rating was The part where I got a really high average but today I'm not sure that I did good on those questions. Well, at least the first half of exam went well.
I guess there is nothing I can do except wait and try to forget!
carrytheCrøss
11-02-2006, 11:49 PM
MUAct, could you please check your private messages? Thanks.
Not trying to hijack!
Warren Schmidt
11-03-2006, 12:41 AM
For the return on equity question, where they gave a list of numbers including equity, underwriting profit/loss, nonadmitted assets, etc., did you come up with a negative number?
GefilteFish144
11-03-2006, 12:50 AM
For the return on equity question, where they gave a list of numbers including equity, underwriting profit/loss, nonadmitted assets, etc., did you come up with a negative number?
Got 7.5%, but not sure. They mentioned "statutory" return, so part of me felt that I was supposed to exclude stuff like changes in N/A Assets, but then I decided just to solve it the usual way and hope for the best.
Warren Schmidt
11-03-2006, 01:06 AM
For the return on equity question, where they gave a list of numbers including equity, underwriting profit/loss, nonadmitted assets, etc., did you come up with a negative number?
Got 7.5%, but not sure. They mentioned "statutory" return, so part of me felt that I was supposed to exclude stuff like changes in N/A Assets, but then I decided just to solve it the usual way and hope for the best.
Oh damn, you're right....I included all that stuff. How many point do you think they would take off for computing the GAAP return instead?
isaac218
11-03-2006, 01:44 AM
Wasn't one of the points of Roth that dS/S the same whether S is based on GAAP or SAP? Doesn't an increase in all that junk (non-admitted assets, xs stat reserves, etc) still hurt SAP? I think I got a negative return when I calculated mine. Hopefully they don't penalize too harshly if this is another trick question in their big bag of tricks this year.
KidCA
11-03-2006, 01:54 AM
*edit* Isaac beat me to the punch, but....
I was actually confused by that problem, too, and I can't remember now if the Surplus they gave at the beginning of the year was statuatory or GAAP surplus. I think Roth says that dS/S is the same under GAAP or SAP since changes affect both the numerator and denominator. I guess what you do on top just needs to match what is underneath.
I, too, did the usual dS/S with the non-admitted, etc, charge. I hope if you solved it correctly, incorrectly, you still get 25-50%.
I ended up with a negative figure with my computation, too.
Kamcio
11-03-2006, 02:20 AM
ditto. how negative, can't tell. but for sure it was less than zero.
frank_exams
11-03-2006, 04:34 AM
For the return on equity question, where they gave a list of numbers including equity, underwriting profit/loss, nonadmitted assets, etc., did you come up with a negative number?
I got a slight negative as well. I double checked my work. IIRC, you were barely positive after II, but then there were a bunch of things like change in non-admitted, XS over Stat (offset slightly by a beneficial change in 4X) which pushed the income to a small negative number.
If it'll make y'all feel any better, I was thrown off by #4. I'm sure many of you thought this was a gimme. Ironically, I felt I mastered the minimum bias stuff, yet wasted a full 25 minutes on this piece of work. After checking over and over, I kept getting a negative value for either Y_1 or Y_2. I skipped it and in the final minutes came back and wrote: "What!?!" in bold letters next to my answer. That and the negative return eroded my confidence pretty quickly.
Fortunately, I got the same EER, Z, and MSL as reported above. I think I used the wrong detrend (6%, but didn't discount the premium enough) and ended up with a debit mod as well.
The big time-eaters for me were the ISO one, #3 (drawing the graph right took me a few tries), #7?, and that awful #4. I swear my mind was working at 10%. I remember writing "pick the deductible" instead of "pierce the deductible" and on the table L question getting $15.3M in total losses (instead of $10M when I rechecked due to inconsistency). I have no idea how you can type an extra $5.3M into the calculator without knowing. :crazy:
Frank
Got 7.5%, but not sure. They mentioned "statutory" return, so part of me felt that I was supposed to exclude stuff like changes in N/A Assets, but then I decided just to solve it the usual way and hope for the best.
Oh damn, you're right....I included all that stuff. How many point do you think they would take off for computing the GAAP return instead? I thought thatthe only difference between stat and GAAP acc. to Roth was DAC, so I included delta(Non-admit assets). Roth wants ALL sources of income, no? I forget exactly what I got right now.
Wasn't one of the points of Roth that dS/S the same whether S is based on GAAP or SAP? Doesn't an increase in all that junk (non-admitted assets, xs stat reserves, etc) still hurt SAP? I think I got a negative return when I calculated mine. Hopefully they don't penalize too harshly if this is another trick question in their big bag of tricks this year.
I got a positive figure, but single digits. I believe all that is added is CHANGE in non admitted assets (which was positive IIRC), and took off for increase in reserves, but I think the foreign exchange added 150, whatever, we'll see :(
Wasn't one of the points of Roth that dS/S the same whether S is based on GAAP or SAP? Doesn't an increase in all that junk (non-admitted assets, xs stat reserves, etc) still hurt SAP? I think I got a negative return when I calculated mine. Hopefully they don't penalize too harshly if this is another trick question in their big bag of tricks this year.
I got a positive figure, but single digits. I believe all that is added is CHANGE in non admitted assets (which was positive IIRC), and took off for increase in reserves, but I think the foreign exchange added 150, whatever, we'll see :(
Didn't the non-admitted assets increase? which would mean a decrease in surplus. I have no idea what answer I got for this one, just remember that for me, I think surplus decreased.
speedy
11-03-2006, 09:29 AM
You're right it doesn't matter if it's SAP or GAAP, but the dS and S have to be on the same basis.
Did not like this exam. I took 2000-2005 exams all week and did very well. I expected the same level of questions, but they threw in some doosies. I left 10-15 pts blank, but nailed some others. I hope for a Christmas present...
NeedaBreak
11-03-2006, 09:55 AM
Didn't the non-admitted assets increase? which would mean a decrease in surplus. I have no idea what answer I got for this one, just remember that for me, I think surplus decreased.
I'm pretty sure you are right on that. BTW, my result was negative as well.
Warren Schmidt
11-03-2006, 10:12 AM
Didn't the non-admitted assets increase? which would mean a decrease in surplus. I have no idea what answer I got for this one, just remember that for me, I think surplus decreased.
I'm pretty sure you are right on that. BTW, my result was negative as well.
I hope you guys are right because I got a negative answer too!
What did people put for the Skurnick questions asking about the extreme values for Table L?
NeedaBreak
11-03-2006, 10:16 AM
I hope you guys are right because I got a negative answer too!
What did people put for the Skurnick questions asking about the extreme values for Table L?
1.00 at r=0 and k as are approaches infinity.
chic squirrel
11-03-2006, 11:26 AM
the risk load ques from walter and morrins: I got 74 as the answer.
Also, for the Mango question,i simply calc yz/(1+y) * (S1-s0) all of which were readily given.
Da Bears!
11-03-2006, 12:10 PM
the risk load ques from walter and morrins: I got 74 as the answer.
Also, for the Mango question,i simply calc yz/(1+y) * (S1-s0) all of which were readily given.
ditto....
and ditto.
frank_exams
11-03-2006, 01:18 PM
the risk load ques from walter and morrins: I got 74 as the answer.
Also, for the Mango question,i simply calc yz/(1+y) * (S1-s0) all of which were readily given.
Shoot, I got $60.
2% was the non-cat risk load
C.V. non-cat was 0.1
C.V. cat was 1 (exponential dist. => std dev = mean, right?)
I thought it was just 2% x 1 / 0.1 = 20%.
20% x $300 = $60.
Frank
Da Bears!
11-03-2006, 01:21 PM
the risk load ques from walter and morrins: I got 74 as the answer.
Also, for the Mango question,i simply calc yz/(1+y) * (S1-s0) all of which were readily given.
Shoot, I got $60.
2% was the non-cat risk load
C.V. non-cat was 0.1
C.V. cat was 1 (exponential dist. => std dev = mean, right?)
I thought it was just 2% x 1 / 0.1 = 20%.
20% x $300 = $60.
Frank
You should get close to full credit, if not full credit. I think the disconnect is that it asked for the risk load for the insured.
I took this to mean Non-Cat risk load plus CAT risk load.
The NonCAT was 2% * $700 = 14
The CAT was 20% * 300 = 60
So total risk load was 74
You had all the important stuff right, IMO
frank_exams
11-03-2006, 01:24 PM
Shoot, I got $60.
2% was the non-cat risk load
C.V. non-cat was 0.1
C.V. cat was 1 (exponential dist. => std dev = mean, right?)
I thought it was just 2% x 1 / 0.1 = 20%.
20% x $300 = $60.
Frank
You should get close to full credit, if not full credit. I think the disconnect is that it asked for the risk load for the insured.
I took this to mean Non-Cat risk load plus CAT risk load.
The NonCAT was 2% * $700 = 14
The CAT was 20% * 300 = 60
So total risk load was 74
You had all the important stuff right, IMO
Ah....
There I go again. I swear I do know what "total" means... :wall:
Frank
GefilteFish144
11-03-2006, 05:03 PM
There I go again. I swear I do know what "total" means... :wall:
Frank
I did one better; I put the risk load as a percent instead of dollars. Though I'm not sure if they specified that it had to be in dollars in the first place.
bg23516
11-04-2006, 05:22 PM
I hope you guys are right because I got a negative answer too!
What did people put for the Skurnick questions asking about the extreme values for Table L?
1.00 at r=0 and k as are approaches infinity.
According to Skurnick Page 123
...This incremental charge is the increment on the excess pure premium ratio due to superimposing a per case limit on a per loss ratio limit. This incremental charge will vary between zero and the loss elimination ratio depending on the per accident limit, the expected loss ratio, the risk premium size and the entry ratio.
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