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

View solution

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

View solution

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

View solution

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

View solution

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

View solution

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

View solution

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

View solution

Q. How are reserves calculated for life insurance policies?

View solution

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

View solution

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

View solution

Q. How does the gross premium valuation method calculate reserves for life insurance liabilities?

View solution

Q. What is the purpose of profit criteria in pricing a product?

View solution

Q. How should the risk discount rates for different products be determined?

View solution

Q. What is the relationship between the risk discount rate and the risk-free rate?

View solution

Q. How is the risk discount rate determined for different products?

View solution

Q. Why does targeting an untested market contribute to the riskiness of a product?

View solution

Q. How does the complexity of design impact the riskiness of a product?

View solution

Q. What effect do high overhead costs have on the riskiness of a product?

View solution

Q. How do policyholder options impact the riskiness of a product?

View solution

Q. Why do high guarantees contribute to the riskiness of a product?

View solution