Prudential Requirements
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Transcript of Prudential Requirements
Prudential Requirements
Manalur Sandilya
Consulting Actuary
Outline
• ICP’s 18 through 23
• Interlinked by the same theme
• Interpretation of Prudent – Prudent Expert
• Non-Life Insurance Focus
• Ideas applicable to Life Insurance situations as well
Background
• Change in the Insurance Environment brought by movement from Tariff regime to a non-tariff regime
• Actuarial Cycle -- a shorter version
• Liability Valuation Standards
• Suggested/Guidance/Approval
• Available Methods
Valuation Methodology
• Paid Development
• Weighted Average or BF
• Incurred Development and BF
• Frequency/Severity methods
• Data Issues
• Objective -- Robust Estimate
Ratemaking Issues
• Basic Premise -- Properly priced and marketed product will not create “reserving” issues
• Where to begin -- given current conditions, start with reserving
• A forward looking analysis
• Data issues
Rate Adequacy
• Actuarial cycle
• Evaluate impact of ratemaking
• Rate Adequacy Analysis
• Leading to IBNR studies
Other Issues
• Handling of Reinsurance
• Appropriate Methods
• Net Analysis and Gross Analysis
• Testing of Analytical results
• Applications to ECR and FCR
• Future?