高顿网校小编友情提醒：当下是备战北美精算师考试的冲刺阶段，北美地区精算师资格考试SOANovember2003Course8I（第三节课内容），速来领取哦。
　　6. (6 points) ABC Life is a market leader in the fixed premium deferred annuity market and
　　would like to offer a product that allows participation in the stock market.
　　An equity indexed annuity has been proposed with the following product design and
　　pricing assumptions:
　　Minimum interest guarantee 3% accumulated on 90% of the premium
　　Participation 85%
　　Equity index formula Increase is based on the highest contract
　　anniversary value of the index
　　Equity index Dow Jones Industrial Average
　　Investment Strategy Purchase path-dependent options in the overthe-
　　counter market
　　Investment hedge administration Purchase hedge assets weekly
　　(a) (2 points) Compare advantages and disadvantages of marketing an equity
　　indexed annuity versus:
　　(i) A conventional fixed premium deferred annuity
　　(ii) A variable annuity
　　(b) (4 points) Evaluate the appropriatene ss of the proposed features and assumptions.
　　Recommend any necessary changes.
　　COURSE 8I: Fall 2003 -8- GO ON TO NEXT PAGE
　　Individual Insurance
　　Morning Session
 
　　7. (7 points) ABC Life sells structured settlement annuities in the U.S. The portfolio
　　consists of non- life contingent lump sum benefits with the following characteristics:
　　?  There are 10,000 individuals receiving lump sum benefits.
　　?  The benefits are certain payments of $100,000 at the end of twenty and
　　forty years.
　　?  The broker’s commission is 2% of premium.
　　(a) Explain the process for:
　　(i) Calculating U.S. GAAP reserves and statutory reserves, and
　　(ii) Appraising the adequacy of the statutory reserves.
　　(b) Explain the effect of issuing these contracts on GAAP:
　　(i) Income statements, and
　　(ii) Future earnings.
　　(c) ABC considers ceding the portfolio under a mod-co financial reinsurance
　　arrangement.
　　(i) Explain advantages and disadvantages of mod-co financial reinsurance.
　　(ii) Assess financial implications of using mod-co on the portfolio.
　　COURSE 8I: Fall 2003 -9- GO ON TO NEXT PAGE
　　Individual Insurance
　　Morning Session
　　Question 8 pertains to the case study.
 
　　8. (9 points) Saturn Life is proposing to enter the reinsurance market. As pricing actuary
　　for Saturn Life, you have been asked to investigate an opportunity to reinsure Mercury’s
　　universal life product with YRT reinsurance.
　　(a) You are given the following information about Saturn Life’s opportunity:
　　Market Attractiveness Factors
　　Weight
　　Score
　　(1 = Low; 5 = High)
　　Market Size 25% 3
　　Market Growth Rate 25% 5
　　Competitive Intensity 50% 2
　　Business Strength Factors
　　Weight
　　Score
　　(1 = Weak; 5 = Strong)
　　Price Competitiveness 60% 4
　　Cost Efficiency 20% 4
　　Marketing Capabilities 20% 5
　　Evaluate the opportunity to enter into the reinsurance market by using the market
　　attractiveness/business strength matrix analysis concept.
　　(b) You are considering using Saturn Life’s ART experience in the pricing of the
　　YRT reinsurance for Mercury’s UL product.
　　(i) Compare the drivers of the mortality experience for Saturn’s ART product
　　and Mercury’s UL product.
　　(ii) Assess the appropriateness of using Saturn’s ART product pricing mortality
　　assumption to price the YRT reinsurance on Mercury’s UL product.
　　(c) You are given:
　　?  Saturn reports its income using the Canadian GAAP financial reporting.
　　?  The proposed valuation mortality assumption for the new YRT reinsurance
　　product is based on the pricing mortality assumption, which includes
　　projected improvements, and includes a 3% margin for adverse deviations.
　　?  The mortality basis is locked- in at issue.
　　Evaluate the proposed valuation mortality assumption.
　　COURSE 8I: Fall 2003 -10- GO ON TO NEXT PAGE
　　Individual Insurance
　　Afternoon Session
 
　　9. (3 points) Your company is considering upgrading its top term life product by adding
　　one of the following product features:
　　(i) Premium increase tied to an external trigger
　　(ii) Partially guaranteed refund of premium
　　(iii) Affiliated company guarantee
　　(iv) Fully guaranteed refund of premium
　　(v) Re-entry plan
　　(a) Describe each of the above features.
　　(b) Explain how the above features are impacted by Actuarial Guideline AXXX.
　　**END OF EXAMINATION**
　　COURSE 8I: Fall 2003 -11- GO ON TO NEXT PAGE
　　Individual Insurance
　　Afternoon Session
　　**BEGINNING OF EXAMINATION**
　　AFTERNOON SESSION
　　Beginning With Question 10
　　存平等心，行方便事，则天下无事。怀慈悲心，做慈悲事，则心中太平。——高顿网校金玉良言

 

 
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