Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

S25 > Chev.Agric > Flashcards

Chev.Agric Flashcards

(44 cards)

Start Studying
1
Q

What is GF2?

A

A comprehensive federal-provincial-territorial framework for Canada’s agricultural sector

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are the 6 BRM programs in GF2?

A
  1. Agricultural Insurance
  2. Agricultural Stability
  3. Agricultural Investment
  4. Agricultural Recovery
  5. Advanced Payments Program
  6. Western Livestock Price Insurance Program
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Describe the agricultural insurance program and its funding.

A

Protects against production loss

Producer-provincial-federal partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Describe the agricultural stability program and its funding.

A

Protects against margin decline (decrease in yield)

Producer-provincial-federal partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Describe the agricultural investment program and its funding.

A

Investment fund for small losses

Producer-provincial-federal partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Describe the agricultural recovery program and its funding.

A

Protects against cost to recover form disaster

Provincial-federal partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Describe the Advance Payments Program and its funding.

A

Provide low-interest loans to help producers to recover from disaster events

Federal funding

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Describe the Western Livestock Price Insurance Program and its funding.

A

Protects against fluctuation in livestock prices

Producer-provincial-federal partnership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Define probable yield

A

Expected yield per unit of exposure for a given producer, agricultural product and crop year.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Define reinsurance load.

AgriIns

A

Account for reinsurance costs when the province purchases reinsurance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Define uncertainty load.

AgriIns

A

a load in rates to account for limitations in data, assumptions, methods.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Define self-sustainability load.

AgriIns

A

A load in rates to recover deficits & maintain surplus.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Briefly describe the purpose of probable yield tests.

AgriIns

A

To ensure there is no over-insurance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Briefly explain the need for both an uncertainty margin and the self-sustainability load in pricing yield-based plans.

AgriIns

A

Both are necessary to ensure the program is self‐sustainable.

Uncertainty covers future contingencies

Self-sustainability recovers past deficit.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the content of an Actuarial Certification? (3)

AgriIns

A

The Actuarial Certification should provide an opinion on:
|1] METHOD for calculating probable yield (for deriving exposure for yield-based plans)
|2] METHOD for pricing
|3] SELF-SUSTAINABILITY of program

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Why is the Actuarial Certification required?

AgriIns

A

For federal funding

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Identify 2 causes that trigger the requirement of a new Actuarial Certification.

AgriIns

A
  1. Significant changes in program design or methods
  2. New crops
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Identify 4 key elements of the Canadian Agri-Insurance Regulation.

AgriIns

Study These Flashcards
A
  • Minimum of 10% deductible
  • Rates must be actuarially sound
  • Probable yields must reflect DEMONSTRATED production capabilities (to prevent over-insurance)
  • Actuarial Certification is required (if uncertified, then federal govt may reduce premium contributions to province)
19
Q

What are the 2 different types of Agri-Insurance plans?

Study These Flashcards
A
  1. Yield-based: can be individual or collective
    2: Non-yield-based: examples are weather derivative, acre-based, mortality for livestock
20
Q

What is a yield-based plan?

AgriIns

Study These Flashcards
A

A plan where the indemnity payment is based on the actual yield versus the insured yield.

21
Q

How do non-yield-based plans work?

AgriIns

Study These Flashcards
A

For this type of production insurance, coverage triggers are NOT based on yield.

22
Q

Define proxy crop coverage.

AgriIns

Study These Flashcards
A

When payment rate for a given crop is BASED ON payment rate for another crop WITH MORE RELIABLE production, price data.

23
Q

What is the coverage trigger for a non-yield based, weather derivative plan?

Study These Flashcards
A

TRIGGER: when pre-determined meteorological thresholds are breached REGARDLESS of actual production.

24
Q

What is the coverage trigger for a non-yield based, tree mortality plan?

Study These Flashcards
A

TRIGGER: when more than a certain % of trees are destroyed by an insured peril REGARDLESS of actual production.

25
What is the formula for probable yield in a yield-based plan? (just say it in words)
Average of yearly production yields
26
Define the purpose of adjustments to historical yields.
To reflect current production capability (similar to on-leveling premiums)
27
Identify 3 triggers for making adjustments to historical yields.
- a change in farming or management practices - a change in insurance program design - a change in data source or data collection technique - maturity of perennials (yield would vary over their life cycle) - quality variation of crop from year-to-year (due to insured perils or other cause)
28
How do you calculate the Production Guarantee?
PG = A x P x C A is the insured area P is the probable yield per unit of area C is the coverage level %
29
How do you calculate the Indemnity (in dollars)?
Indem$ = Max(0, PG - AP)x(insured unit price) AP is the Actual production
30
How do you calculate the Liability (in dollars) for yield-based plans?
L$(yield-based) = PG x insured price
31
How do you calculate the Liability (in dollars) for non-yield-based plans?
L$(non-yield-based) = (# insured units) x (insured price)
32
How do you calculate the Indemnity Rate?
IndemRt = Indem$ / L$
33
How do you calculate the Premium Rate? (6 elements)
Indemnity Rate and add the following: 1. Uncertainty Margin 2. Balance-back factor 3. Individual discount/surcharge 4. Reinsurance load 5. Self-sustainability load ## Footnote Premium = expected cost + Self-sustainability load + Uncertainty margin (expenses are shared by Fed. And Prov.)
34
What are the 3 types of weather events that are covered by non-yield-based plans?
1. Excessive rainfall 2. Drought 3. Freeze
35
What are the 2 consequences of rate instability in production insurance programs?
1. Fluctuations in participation 2. Adverse selection
36
What is the federal requirement for `self-sustainability` (statistical definition)? ## Footnote AgriIns
Program is self-sustainable if `Recovery` from the `95th percentile deficit` would occur: → within `15 years on average`, or → within `25 years with 80% probability`
37
What is the basis for the self-sustainability test? ## Footnote AgriIns
25-yr stochastic simulation of financial position
38
What is the actuary's role regarding the self-sustainability test?
The actuary should design OR confirm methodology for calculating the self-sustainability load.
39
True or False? Government reinsurance for agri-insurance is considered traditional reinsurance.
False, it's an optional deficit-financing scheme Province may finance deficits as they occur VERSUS regularly contributing to a govt reinsurance fund
40
What `triggers` government r`einsurance for an agri-insurance` program?
When `SURPLUS of the production insurance fund is DEPLETED` Note that indemnities net of private insurance are paid out of production insurance fund first
41
Briefly describe `2 roles of the federal government` in agri-insurance programs.
1. Pay a portion of premium & admin cost 2. Act as a reinsurer to provincial plans.
42
Briefly describe `2 roles of the provincial government `in agri-insurance programs.
1. Determine premium rates 2. Responsible for claims handling process 3. Determine probable yield
43
Briefly describe `2 roles of the Canadian producers in agri-insurance` programs.
1. Manage crop normally 2. Pay a portion of premium
44
Briefly describe `2 roles of the private insurance/reinsurance `companies in agri-insurance programs.
1. Provide coverage for perils not covered under gov insurance (ex: fire) 2. Act as reinsurers to the program

S25 (56 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions