Hello all, My question is on Q2(ii) of the Oct 2015 paper. We are told fundamental uncertainty is until the start of 2012. Does that mean in most cases the 2007 Syndicate can only close at the end of 2012, because the 2012 year has already started? Could you explain why the RITC is transferred to the 2011 Syndicate and not the 2010 syndicate? Is it because the Receiving syndicate usually receives RITC at the end of their 2nd open year? How would our answer differ if fundamental uncertainty was until the end of 2011? Would that mean Syndicate 2007 would pay RITC to Syndicate 2010 instead of Syndicate 2011?
1. The RITC exercise normally takes place once per year at the end of one year / beginning of the next year. 2. Yes that is correct, an underwriting year normally receives an RITC premium one year before it is due to RITC itself. 3. The end of 2011 and start of 2012 are basically the same thing - see answer to 1. Note that each underwriting year is not necessarily a different syndicate, they are different underwriting years from the same syndicate.
