D4. ASOP 20 Flashcards Preview

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Flashcards in D4. ASOP 20 Deck (4):

Payment timing

-actuary has to predict timing and magnitude of future payments
-assumptions and consideration should be same used to determine full value reserves
-consider sensitivity of timing
-timing of recoveries


Discounting rate options

-risk free rate
-portfolio approach is the anticipated return on a selected asset portfolio
-discount rates requested by another party



-assumptions behind selected rate
-difference between undiscounted and discounted rates
-whether the reserves(discounted) include a risk margin and basis
-significant limitations
-reliance on other sources


Recommended practices

-Beware of context in which discounted reserves will be used.
-significance of assumptions vary with undiscounted vs discounted