CCIR Instructions

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  1. Federally registered reinsurer
    • federally regulated domestic insurance company
    • foreign company that has reinsured in Canada the risks of the ceding company
    • provincially/territorially regulated insurer that does not meet definition of unregistered
    • BC / MA / SK public auto
    • Export Development Canada
  2. Federally unregistered reinsurer
    • incorporated or formed outside Canada and has reinsured said risks outside Canada
    • incorporated federally/outside Canada and has reinsured said risks in Canada but is not authorized by order of the Superintendent to do so
    • provincially/territorially regulated reinsurer not approved by the Superintendent
  3. Provincially unregistered reinsurers
    • licensed in that jurisdiction
    • regulator may accept reinsurer not licensed in its jurisdiction if licensed in another
    • unregistered = not licensed by ≥ 1 provincial regulators, and not federally registered
    • BC: must be licensed, registered or otherwise authorized to carry business in Canada
    • QC: must be approved in Quebec or another province, or subject to federal regulation
  4. Treatment of FA, RSP and PRR business
    • treated as negative direct business
    • premiums and commissions not accepted by FA or PRR are considered direct business
    • premium, commissions and losses transferred according to allocation are direct business
  5. Type 1 structured settlements
    • annuity is purchased by insurer, with irrevocable direction from insurer to pay claimant
    • it provides no current or future benefit to the insurer
    • insurer is released by the claimant to evidence settlement of the claim amount
    • insurer remains liable to make payments if annuity UW fails to do so
    • for type 1, insurer does not have to recognize a liability to the claimant, nor does it have to recognize the annuity as a financial asset.
  6. Type 2 structured settlements
    • annuity is commutable or assignable or transferable
    • a legal release is not necessarily obtained from the claimant
    • financial liability must be recognized on insurer’s balance sheet, and annuity must be recognized as a financial asset
  7. Requirements for letters of credit in Quebec
    • must be in Canadian dollars, payable in Canada (issued/confirmed by Canadian bank)
    • must be for a fixed term, at least one year
    • must be for a stipulated dollar amount
    • must be irrevocable except with at least three months' notice to Regulator
    • issuing and confirming bank must not have any claim on the assets held as security
  8. Net Investment Income from Insurance Operations
    • min[NII, (A + B + C + D - E - F) x Investment Yield]
    • A = average net unpaid claims and adjustment expenses
    • B = average net UEP
    • C = average unearned commissions for the year
    • D = average premium deficiency for the year
    • E = average deferred policy acquisition expenses
    • F = average receivables from agents and brokers, policyholders and instalment premiums
  9. Investment Yield
    • Yield = 2NII / (Vb + Ve - NII)
    • NII = net investment income including recognized gains on investments
    • V = cash & investments
  10. Return on Equity
    • Return = 2NI / (Eb + Ee)
    • NI = net income after tax
    • E = equity
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CCIR Instructions
2014-04-13 00:19:38
P&C-1 Calculation
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