Task 1

[kingjames]

Lets discuss task 1.

[Jay]

Hi, 

I'm formulating my response for Task 1, saw the unanswered thread 2 Biggest Components of a Rsv. Cals on Actuarial Outpost and I have similar doubts. Not sure whether its about "assumptions & methodology" or literally like "PV of future income & PV of future benefits". 

Any thoughts?

[kingjames]

i referred to reserves as:

reserves = pv of future benefits + pv of future expenses - pv of future premium 

(stressing benefits and premiums as the major components)

then i mentioned how surplus is required. this is my reasoning for why it is not unusual for assets to dwarf liabilities. 

i also mentioned rbc and dac tax. left out tax reserves and aat (still dont know wtf this is). 

the whole module must be 4 pages so i tried to be brief.

[Jay]

think AAT refers to asset adequacy testing, you can find it on slide #51

not sure why they introduce the abbreviation only in the EOM

[joyceyanqi]

I just realized I have been sending my replies to individual only instead of the discussion group. I used the formula for net premium reserve instead of the gross premium reserve. However, I also mentioned that the biggest two assumption components for calculating these present values are mortality and interest.

[joyceyanqi]

Wow! I have been struggle with this abbreviation for a while. I thought it refers to "AAA" (Asset Adequacy Analysis) in ASOP 22. Thanks for catching this in the slides.

[Jerry Zhang]

My response for Task 1 takes up roughly 1 page, i think the hardest part was to link tax reserves & DAC tax with other key ideas.

I mentioned that reserve and surplus do have implication on federal income taxation, with elaboration on tax reserves and DAC tax, not sure if it is okay.