Underwriting and Investment Exhibit Affiliates

[Gareth Keenan]

Why does the UW&Inv EX separate Affiliates from Non-Affiliates? Is this something we'll need to know?

Or the telling question I came up with, is "How could an insurer game the system by not having to separate affiliates vs non affiliates in the exhibit?"

Cheers,

Gareth Keenan

[chicken_po_boy]

Originally Posted by Gareth Keenan

Why does the UW&Inv EX separate Affiliates from Non-Affiliates? Is this something we'll need to know?

Most likely not, unless there is a specific paper on the syllabus that explains why. I don't remember there being one.

Originally Posted by Gareth Keenan

Or the telling question I came up with, is "How could an insurer game the system by not having to separate affiliates vs non affiliates in the exhibit?"

Have no idea what you mean by this. Is it relevant to the 2011 syllabus?

[Gareth Keenan]

Originally Posted by chicken_po_boy

Have no idea what you mean by this. Is it relevant to the 2011 syllabus?

Basically, my general though for the evolution of financial statements is that change comes about in one of two ways. 1, The current method of documentation isn't good enough, and so inadequate that it justifies the cost in changing the document, or 2, some company(s) lied, were deceitful, or otherwise took advantage(think like billions or so) of stakeholders/regulators, and after the fact somebody said"how can we prevent this from happening in the future" and the response was "We'll make the annual statement separate affiliates from non affiliates"

I actually don't know if it's relevant to the syllabus, sometimes when studying for an exam I have stray thoughts about topics that won't be tested. I usually then slap myself.

[Vorian Atreides]

An investment in an affiliate is likely separated due to the fact that if the affiliate defaults, it's a greater indicator that you are in financial difficulties.

I think it also helps prevent the shifting around of assets to adjust a particular company's bottom line (that is, make it appear either more profitable for shareholders or less profitable to justify a rate increase). Note: you can still do this, but it's easier to detect when you can't hide it within a bunch of unaffiliated investments.