CP3 September 2018

Hi, I've got some questions on the September 2018 paper. The CP3 exam is coming up on Friday so I'd really appreciate any help before then.

1. This could be a silly question as I can't see where anyone else has asked about it..but in the CP3 paper from September 2018, how are the mortality factors being calculated? I can't see any references to tables in the advance information.

2. In the exam paper, "Angela" used the comparison website on 1 Aug 2018 and completed the online application form on 1 Sept 2018 (and she turned 26 in that time). The rates were updated on 5 August 2018.
However, the examiners report says the rates were updated on 5 September and proceeds to calculate the two premiums on 1 Sept 2018 and 1 Oct 2018, which I cannot see the relevance to at all. Is the examiners report just wrong on these dates?

3. When calculating the two premiums on 1 Sept 2018 and 1 Oct 2018, the examiners report uses "standard premium" of 0.00005 and 0.000055 respectively. I can see now that these are being used as the mortality factor, but in my view this isn't very clear. Did anyone struggle with this in the exam? It seems like this would have been a real blocker for me and I would have struggled to know where to start.

 

I did this paper last week. It wasn't obvious initially but when I tried to replicate the premiums with the info available it became obvious then. I suppose that is what CP3 is testing, our ability to read the information, interpret it and communicate it to an audience.

 

Hi Esme,

Good observations! By the way, I did not sit for this exam in Sept 2018. I just practiced this paper.

For point 1, the last table in the exam paper contains mortality factors I guess. The advance material didn't seem too concerned about mentioning that.

For point 2, I think the examiner report is wrong. It should have been 1 August 2018 and 1 September 2018. I am guessing they were showing the premium difference pre and post repricing.

For point 3, I agree. It wasn't very clear to me. I just connected two dots (rates per $100,000 and the age). Assumed it was the mortality factors.

 

Thanks so much both for your messages. It's comforting to know I'm not the only one who found this a bit confusing!

The dates thing has frustrated me a bit. It doesn't really fill you with confidence going into an exam, when the examiners report has errors in!

Fingers crossed this sitting is a bit clearer, it sounds like the Sept 2018 sitting had a few issues.

 

Yeah let's hope so. The problem I had with this paper was the decision on how much detail to go into with the policyholder. I was thinking about my experience at work and I wouldnt break down a calculation to a member or policy holder in this much detail, it would probably be more high level.

I guess the message I took was do exactly what the question asks you to do even if it is going against your instinct.

 

You'll see me moan about this elsewhere, but I'm not convinced it was awarded full marks.

 

Interesting, I just read your comments in the other thread. It does seem that the institute really messed up this exam. I can only hope it means an easier exam with more lenient marking on Friday!