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The flashcards below were created by user
ED_6C3
on FreezingBlue Flashcards.
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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
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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
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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
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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
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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.
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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
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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
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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
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Investment Yield
- Yield = 2NII / (Vb + Ve - NII)
- NII = net investment income including recognized gains on investments
- V = cash & investments
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Return on Equity
- Return = 2NI / (Eb + Ee)
- NI = net income after tax
- E = equity
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