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Recent content by Lindsay Smitherman

  1. L

    CSM rollforward

    Hi - your questions here seem to go some way beyond the detail given in the SA2 Core Reading. The forum is designed to help students understand aspects of the course (including past exam questions) that they might be finding difficult. If you need to go into further detail beyond the course...
  2. L

    CP1 September 2023 Paper 1 Question 1

    Hi Ethan - you can find information on our ASET and Vault products (and the range of CP1 products available via the eStore) through the following website links, which also themselves have links through to the eStore for purchase: https://www.acted.co.uk/revisionMaterial.html?v=301534#aset...
  3. L

    Sep 2021 Q1 (iii) Expense SCR

    Hi - I can see where you are coming from and agree that it seems confusing and potentially contradictory! I think what they are getting in the solution is that the company is likely to be assuming that some of these overheads can be supported by the new business that it expects to write during...
  4. L

    April 2022 Q1(iv)

    Hi - just wanted to clarify on this, to try to avoid any potential confusion between 'release of reserves' and 'release of margins in reserves'. Yes - you are correct: whenever there is a claim, the reserves for that policy are released in order to help pay for that claim. So if claims are as...
  5. L

    EV and pvif

    Hi James: we could simply consider the CSM + RA to represent the prudential margins in the liabilities, and then the principles would be the same, ie the future profits expected to arise will be the release of the CSM + RA as the cohort of business runs off. However, we need to be a little...
  6. L

    Analysis of BEL APR21

    The liabilities will reduce by releasing the amount held for expected expenses. This is true irrespective of what the actual expenses were. The release of this amount will be used to pay the actual expenses. If we spend more than this expected release, then the assets will be lower than we...
  7. L

    CP1 September 2023 Paper 1 Question 1

    Hi Rebecca Available capital is normally defined as the excess of the value of assets over the value of liabilities. Required capital could well be determined by stressing this available capital under the various risks and then taking required capital = available capital without stress -...
  8. L

    Analysis of BEL APR21

    Yes, actual expenses differing from expected expenses during the year is an example of an experience variance: but it is one that impacts the size of the assets (which would be lower than expected at the year end, as a result of paying out higher expenses than expected), not the size of the...
  9. L

    April 2023 Ques 1 part (i)

    You are effectively saying: 'If more annuitants die than expected, the assets at the year end may be higher than expected because any annuity payments due between when they died and the year end will not have been made, and the reserves and capital requirements held at the year end will be lower...
  10. L

    Profit Reporting- Changes to Core Reading in 2025

    As indicated in the upgrade document, there has been a significant amount of rewriting of this chapter as a result of material Core Reading changes. These provide a considerable amount of additional information about IFRS, particularly the details of IFRS 17. Hence we would strongly recommend...
  11. L

    X6.3 part 1 Impaired annuity definition

    Your logic is correct - perhaps you are just misreading the point in the solution? The wider the definition of 'impaired life', the more healthy (on average) the lives of those who don't qualify and therefore would purchase a standard annuity. As you say, as the definition widens, those...
  12. L

    September 2020 Paper 2 Q2(ii)

    As I said above, not necessarily. But bear in mind that the 'policy valuation data' (ie the data used to perform the policy valuations) will be used to calculate those individual reserves. So if comparing the reserves against other items indicates that there might be a problem with the...
  13. L

    April 2019 Sa2

    This basically just means that if X risk module increases / decreases by Y then we can't automatically deduce that the SCR also increases / decreases by Y, due to there being diversification offsets against other risk modules.
  14. L

    April 2019 Sa2

    Credit spread widening -> value of corporate bonds falls. Value of corporate bonds falls -> less exposure to credit spread risk. So credit spread SCR reduces.
  15. L

    Lapse Risk

    Lapses lead to release of positive reserve. Release of positive reserve is good for insurer. So lower lapses is adverse, because you get less (beneficial) release of reserve.
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