Actuarial Outpost
 
Go Back   Actuarial Outpost > Exams - Please Limit Discussion to Exam-Related Topics > CAS > Part 7
FlashChat Actuarial Discussion Preliminary Exams CAS/SOA Exams Cyberchat Around the World Suggestions


 
 
Thread Tools Display Modes
Prev Previous Post   Next Post Next
  #1  
Old 02-05-2006, 03:19 PM
Mister_5 Mister_5 is offline
Member
 
Join Date: May 2005
Location: Chicagoland
Posts: 62
Default COPLFR Note - Q on Bright Line Indicator

In Appendx 9 the CATF discusses the ASOP. In regard to the subject of materiality (pg 81) they state.

"we beleive, however, that there is value is setting forth an indicator that would define an outside bound for materiality considerations"

"we would consider the following Bright line indicator as an outside bound of what is material"

"10% of the insurer's net reserves, that is 10% of the sum of lines 1 & 3 on page 3 of the A/S, are greater than the difference between the total adjusted capital and Company action level capital"

These comments are in regard to establishing a material standard in the the actuarial opinion. The actuary is then required to comment on any items that mght cause loss & lae reserve changes in excess of this standard. e.g they are defining what events could have a risk of material adverse deviation (RMAD).

OK, so I've covered RBC. Adjusted surplus is stat surplus - nontabular discount. And the company action evel captial is 50% of the RBC requirement. What I don't get is the meaning of the language here. Best I can come up with is -

(1) Should "are" be "or" (or)
(2) (when) 10% of lines 1 & 3 are greater than the difference between total adjusted captial and Company action level capital....(then what?)
Reply With Quote
 

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


All times are GMT -4. The time now is 07:45 PM.


Powered by vBulletin®
Copyright ©2000 - 2010, Jelsoft Enterprises Ltd.
*PLEASE NOTE: Posts are not checked for accuracy, and do not
represent the views of the Actuarial Outpost or its sponsors.
Page generated in 0.14453 seconds with 6 queries