Question

Which method is typically used for calculating reserves of life insurance liabilities in India?

a.

Net premium valuation method

b.

Gross premium valuation method

c.

Gross profit valuation method

d.

Discounted cash flow valuation method

Answer: (b).Gross premium valuation method Explanation:In India, the gross premium valuation method is used to calculate reserves for life insurance liabilities. This method is specified by regulations and involves calculating reserves based on present values of net cash outflows.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. Which method is typically used for calculating reserves of life insurance liabilities in India?

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. When calculating reserves using the gross premium valuation method, which cashflows are considered?

Q. How are reserves calculated for life insurance policies?

Q. What is the purpose of the "Margin for adverse deviation" (MAD) used in reserving?

Q. Why are the assumptions used for reserving exercises more prudent compared to those used for pricing?

Q. What is the role of the Margin for Adverse Deviation (MAD) in reserving for life insurance liabilities?

Q. Which regulatory bodies provide guidelines for reserving practices in the Indian insurance industry?

Q. What is the purpose of APS-7 issued by the Institute of Actuaries of India (IAI)?

Q. What are margins used for in insurance pricing and reserving?

Q. Which approaches can be used to account for the risk of adverse future experience in cashflow modeling for life insurance contracts?

Q. What is a key consideration in determining the risk discount rate?

Q. Why is reserving an important aspect of pricing in insurance?

Q. How do the margins used in reserving differ from those used in pricing?

Q. The approach not used for allowing for margins in cashflow approach is ____________.

Q. In the CAPM formula, what is deducted from Em on the RHS?

Q. Application of margin will result into investment return assumption than best estimate?

Q. Which of the following APS defines the minimum MAD to be used for reserving?

Recommended Subjects

Are you eager to expand your knowledge beyond IC 92 Actuarial Aspects of Product Development? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!