Pembahasan Ujian PAI: A40 – No. 7 – Juni 2016

(Statutory and GAAP)

• Enables the insurer to absorb unexpected claims experience while offering stable premiums to group medical insurance policyholders

(Statutory only)

• Must be established when the valuation net premium exceeds the gross premium

(Statutory only)

• Established voluntary
• Serve as a cushion against future adverse experience
• Considered a surplus account on the balance sheet

(Statutory only)

•  Absorbs capital gains and losses on certain investments caused by interest rate changes
• Gain and losses must be realized
• Covers bonds, mortgages, and preffered stock only
• Allows gains and losses to gradually affect the capital and surplus accounts

(Statutory only)

• Absorbs credit-related capital gains and losses
• Absorbs realized and un realized gains and losses
• Each year insurers must perform calculations in order to determine whether they must increase their AVR
• Allows gain and losses to gradually affect the capital and surplus accounts