Final Review

Question 1

Current Year Surplus Calculation (long)

Answer 1

Surplus as of December 31 of prior year
+ Net income
+ Change in net unrealized capital
+ gains/losses less capital gains tax
+ Change in net unrealized foreign
+ exchange capital gain/loss
+ Change in net deferred income tax
+ Change in non-admitted assets
+ Change in provision for reinsurance
+ Cumulative effect of changes in accounting principles
+ Capital changes
+ Surplus adjustments
- Dividends to stockholders
+ Aggregate write-ins for gains or losses to surplus

Question 2

Current Year Surplus Calculation (short)

Answer 2

Current Year Surplus =
Prior Year Surplus
+ Current Year’s Net Income
+ Other Surplus Changes
+ Additional Capital Contributions
- Stockholder Dividends