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Septemeber 2009 Exam Q8

D

DevonMatthews

Member
Why does the question calculate the reserve as the difference between the projected ultimate figure and the claims incured by calendar year 2008? Without knowing how much has been paid how can this question even be answerd. The only reasonable answer is to put an upper limit on the reserve by adding all the projected outstanding figures.
 
Why does the question calculate the reserve as the difference between the projected ultimate figure and the claims incured by calendar year 2008? Without knowing how much has been paid how can this question even be answerd. The only reasonable answer is to put an upper limit on the reserve by adding all the projected outstanding figures.

I agree - the claims should've said paid. We took this up with the examiners who said there was no problem...

Technically we can only estimate the reserve for the claims incurred on the BCL and we have to assume that they are paid for the BF.

You're welcome to write to the examinations team...otherwise in an exam I suggest you write a comment on the paper and ask for a feedback/comment form immediately after...
 
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