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Question 1

Incurred Losses Stat vs Tax

Answer 1

Statutory accounting: IL = Paid losses + Change in full value reserves.

Tax accounting: IL = Paid loss + Change in discounted reserves

Question 2

Why is there adjustment for investment income in RBC

Answer 2

RBC formulas use undiscounted values from AS. This adds extra margins for adverse conditions, which is reflected in RBC requirement in order to avoid being too conservative

Question 3

5 year historical

Answer 3

• written premium
• balance sheet–>identify components of the change in surplus
• risk based capital
• operating percentages
• one and two year loss development