Difference between revisions of "ASOP.20"
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==In Plain English!== | ==In Plain English!== | ||
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| + | {| class='wikitable' | ||
| + | |- | ||
| + | | '''Question''': given an undiscounted reserve estimates, what <u>components</u> are required to calculate the corresponding discounted reserve | ||
| + | |} | ||
| + | |||
| + | * payment pattern ''(recoverables should be considered when developing a payment pattern)'' | ||
| + | * discount rate | ||
| + | |||
| + | {| class='wikitable' | ||
| + | |- | ||
| + | | '''Question''': briefly describe 3 possible methods for selecting a <u>discount rate</u> | ||
| + | |} | ||
| + | |||
| + | : '''risk-free rate''': | ||
| + | :   - this is the rate of return from a hypothetical investment with ''no risk'' | ||
| + | :   - in practice this would be a very low risk investment with a timing pattern similar to the payment pattern for the given reserve liabilities | ||
| + | |||
| + | : '''portfolio yield''': | ||
| + | |||
| + | : '''selection by another party''': | ||
| + | |||
| + | |||
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Revision as of 19:14, 7 April 2019
ASOP 20, Discounting of Property/Casualty Unpaid Claim Estimates, provides guidance to the actuary related to services involving discounting of unpaid claim estimates for P&C coverages.
Study Tips
BattleTable
Based on past exams, the main things you need to know (in rough order of importance) are:
- this reading has not been tested on any exam from the year 2012 and subsequent
reference part (a) part (b) part (c) part (d) no prior questions
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In Plain English!
| Question: given an undiscounted reserve estimates, what components are required to calculate the corresponding discounted reserve |
- payment pattern (recoverables should be considered when developing a payment pattern)
- discount rate
| Question: briefly describe 3 possible methods for selecting a discount rate |
- risk-free rate:
-   - this is the rate of return from a hypothetical investment with no risk
-   - in practice this would be a very low risk investment with a timing pattern similar to the payment pattern for the given reserve liabilities
- portfolio yield:
- selection by another party:
Full BattleQuiz You must be logged in or this will not work.
