CIA Runoff

  1. Undiscounted Basis
    Emergence in t with respect to accident years t-1 and prior
    • = (Ultimate amounts estimated at t-1) – (ultimate amounts estimated at t)
    • = (Claim liabilities at t-1) – (Paid during t) – (Claim liabilities at t)
  2. How to account for time value of money
    • Excess (deficiency)
    • = (Disc liab at t-1) - [(Paid during t) + (Disc liab at t) - (II in CY t on unpaid cliams)]
    • = (Disc liab at t-1) - PV at t-1 of [(Paid during t) + (Disc liab at t)]
    • Discount terms at time t to t-1
    • Subtract II during year t on assets supporting liabilities
  3. II attributable to policy liabilities, II attributable to assets backing the net premium liabilities
    • II attributable to policy liabilities = selected yield rate * average of the starting and ending values of
      • + net unpaid claims
      • + net unearned premium
      • – gross DPAC
      • + premium deficiency provisions
      • + unearned commissions
      • – agents, brokers and policyholders receivables
      • – instalment premiums
      II attributable to assets backing the net premium liabilities can be calculated similarly 
    • The investable assets =
      • net unearned premium
      • + premium deficiency
      • + unearned commissions
      • - gross DPAC
      • - agents, brokers and policyholders’ receivables
      • - instalment premiums.
Author
youngt
ID
339157
Card Set
CIA Runoff
Description
CIA Runoff (Evaluation of the Runoff when Liabilities are Discounted in accord with AAP)
Updated