CAS SOP

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Esaie
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33346
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CAS SOP
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2010-09-08 03:18:05
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Exam6 By Esaie
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CAS SOP - Exam6 - By Esaie
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  1. 5 components of loss reserve
    • Case reserve
    • Prov for future dvpmt on known clms
    • Reopen clm reserve
    • Prov for clms IBNR
    • Prov for clms in transit
  2. Define accounting and valuation date
    • Accounting date: date that defines the group of clms for which liability may exist
    • Valuation date: date through which transactions are included in the database used in the evaluation of the liability, regardless of when the analysis is performed
  3. Define development
    Change between valuation dates in the observed values of certain fundamental quantities that may be used in the loss reserve process
  4. 4 principles of loss reserving
    • An actuarially sound loss reserve for a defined group of claims as of a given valuation date, is a provision based on reasonable assumptions and appropriate actuarial methods for the unpaid amount required to settle all claims, whether reported or not for which a liability exists on a particular accounting date
    • An actuarially sound LAE reserve, for a defined group of claims on a given valuation date, is a provision based on reasonable assumptions and appropriate acuarial methods, for the unpaid amount needed to investigate, defend, and effect the settlement of all claims, whether reported or not for which a liability exists on a particular accounting date
    • The uncertainty inherent in the loss reserving process implies that a range of estimates can be actuarially sound. The ultimate value of the amounts unpaid cannot be known until all attendant claims are settled
    • The most appropriate loss reserve from a range of reasonable estimates will depend on the relative likelihood of the estimates within the range and the financial reporting context in which the reserves will be presented
  5. Name 3 loss reserve considerations
    • Homogeneity
    • Credibility
    • Emergence/Settlmt/Dvpmt patterns
    • Operational changes
    • Changes in contract
    • External influences

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