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Long-Term Actuarial Math Old Exam MLC Forum

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Old 04-13-2018, 10:13 AM
ActuaryFromMTL ActuaryFromMTL is offline
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Default FPT reserves

Hi all,

I was wondering if they ask us to find the FPT reserve at time 1, is it always 0? since this is the net premium reserve for an insurance that starts at time 1?

Thanks.
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Old 04-13-2018, 10:40 AM
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Originally Posted by ActuaryFromMTL View Post
Hi all,

I was wondering if they ask us to find the FPT reserve at time 1, is it always 0? since this is the net premium reserve for an insurance that starts at time 1?

Thanks.
As that is the definition of FPT (the policy for reserve purposes is a one year term the first year) I don't think they would ask to find the FPT reserve at time one.
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Old 04-13-2018, 11:12 AM
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See the last exam (October 2017), WA Question 1(d) they asked exactly that
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Old 04-13-2018, 01:01 PM
ActuaryFromMTL ActuaryFromMTL is offline
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See the last exam (October 2017), WA Question 1(d) they asked exactly that
Merci!
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Old 04-14-2018, 03:35 PM
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Could there be a two-year FPT reserve question? If so, would 0V, 1V, and 2V = 0? Or just 0V and 2V?
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Old 04-14-2018, 04:38 PM
ActuaryFromMTL ActuaryFromMTL is offline
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Could there be a two-year FPT reserve question? If so, would 0V, 1V, and 2V = 0? Or just 0V and 2V?
I don't think so. By definition, FPT reserve method is based on 1 year.
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Old 04-14-2018, 05:16 PM
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Could there be a two-year FPT reserve question? If so, would 0V, 1V, and 2V = 0? Or just 0V and 2V?
Dug out my oooooold life cons book. There is such a thing as 2 year FPT and 0V=1V=2V=0. Apparently, it was used a lot in health insurance.

As well, some of us older Canadian lifers remember 1.5 FPT under the Income Tax Act for MTARs.
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Old 04-16-2018, 09:49 AM
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Awesome, i sure they won't ask about it. But good to know!
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