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Flashcards in Odomirok 13 Deck (11):
1

2 reasons that insurers should not have large investments in mortgages

1. They are not part of the core business strategy
2. They are illiquid

2

Schedule BA of A.S. describes

This gives information about other long term assets owned by the insurer

3

Schedule D of A.S describes

This provides details about stock and bonds

4

Schedule DA of A.S describes

This provides details about the short term investments

5

Schedule DB of A.S describes

This lists the derivatives owned by the insurer

6

Schedule DL of A.S. describes

This provides detail about securities lending collateral assets. The purpose is to add transparency about these assets

7

Describe the securities lending process

Securities lending is when a company lends certain securities that it is not actively trading to another party for a fee. The borrower will usually short sell the asset, hoping to repurchase it later for a lower price, before returning it to the lender. This exposes the lender to credit risk, so the borrower needs to post collateral. The lender can invest this collateral, but needs to have it available to return to the borrower when they return the securities

8

In securities lending, why should the collateral be invested in short term, low risk, highly liquid markets

-The arrangements between borrower and lender are usually short term
-The borrower can usually return the securities with short notice

9

Schedule E of A.S. describes

This provides detail about cash and cash equivalents

10

List some reasons that Schedule T is useful to actuaries

-They can see where the company writes business, so that they can research the relevant insurance laws of the state
-By looking at historical schedules, they can see if the insurer has changed its geographic exposure
-When industry factors are used, this can help derive the weight to apply to the industry factors from each state

11

Schedule Y of A.S. describes

This provides information about activities of insurer members of a holding company group