1.

Calculate the ASM for an insurer with the

following data:
o Capital: 100
o Reserves: 200
o Retained earnings: 10
o Subordinated irredeemable bonds: 50
o Subordinated bonds with maturity: 40
o Intangibles: 30
o Authorized hidden net reserves: 10
o RSM: 300

SOLUTION

Capital = 100
Reserves = 200
Retained earnings = 10
Subordinated bonds and hybrids = 90
- Within the 25% limit = 40
- Within the 50% limit = 50

Deductions (-)
Intangibles = -30

Other elements
Authorized hidden net reserves = 10

ASM = 380
 2. Calculate the RSM for the following life insurer:

- Policies in class 1 (length of human life)

o Gross TP current year: 5.000
o Net TP previous year: 4.000
o Gross TP previous year: 4.500
o + Capital at risk for contracts other than temporary death
assurance in current year: 3.000
o + Capital at risk for temporary death assurance within 3 years in
current year: 2.000
o + Capital at risk for temporary death assurance between 3 and 5
years in current year: 1.000
o + Net capital at risk previous year: 4.000
o + Gross capital at risk previous year: 9.000

SOLUTION
1. 4% of GTP current year = 5.000 x 4% = 200
2. Conservation ratio (min. 85%) = 4.000 / 4.500 = 88,89%
3. RSM = (1) x (2) = 177,78
4. 0,3% of capital at risk for contracts other than TDA: 3.000 x 0,3% = 9
5. 0,1% of CAR, TDA<3y = 2.000 x 0,1% = 2
6. 0,15% of CAR, 3y<TDA<5y = 1.000 x 0,15% = 1,5
7. Conservation ratio (min. 50%) = 4.000 / 9.000 = 44,44% 50%
8. RSM = [(4) + (5) + (6)] x (7) = 12,50 x 50% = 6,25
Total = (3) + (8) = 177,78 + 6,25 = 184,03

- Capital redemption policies (class VI)

o Gross TP current year: 500
o Net TP previous year: 400
o Gross TP previous year: 450

SOLUTION
1. 4% of GTP current year = 500 x 4% = 20
2. Conservation ratio (min. 85%) = 400/450 = 88,89%
3. RSM = (1) x (2) = 17,78
- Unit-, index-linked and pension funds (classes III and VII)
o With investment risk:
Gross TP current year: 1.000
Net TP previous year: 3.000
Gross TP previous year: 3.000
o Without inv. risk and expenses determined for over 5 years:
Gross TP current year: 1.000
o Without inv. risk and expenses determined within 5 years:
Administrative expenses previous year: 300
o With mortality risk:
+ Gross capital at risk current year: 400
+ Net capital at risk previous year: 300
+ Gross capital at risk previous year: 300

SOLUTION
o With investment risk:
4% of GTP current year = 4% x 1.000 = 40
Conservation ratio (min. 85%) = 3.000 / 3.000 = 100%
RSM = (1) x (2) = 40 x 100% = 40
o Without investment risk and exp. determined for over 5 years:
RSM = 1% of GTP current year = 1% x 1.000 = 10
o Without investment risk and expenses determined within 5 years:
RSM = 25% of adm. exp. previous year = 300 x 25% = 75
o With mortality risk:
0,3% of CAR current year = 0,3% x 400 = 1,2
Conservation ratio (min. 50%) = 300 / 300 = 100%
RSM = (1) x (2) = 1,2 x 100% = 1,2
TOTAL: = 40 + 10 + 75 + 1,2 = 126,2

TOTAL RSM = 184,03 + 17,78 + 126,2 = 328,01

GUARANTEE FUND = 1/3 x (1) = 109,34
TOTAL ASM = 380
ASM TO COVER GF = 280
COVERAGE = 380-328.01=51.99
COVERAGE OF GF = 280-109.34=170.66
3. Calculate the RSM for the following non-life insurer (data in mln):
o Current year
GWP (excl. big risks) = 100
GWP of big risks = 30
GPC (excl. big risks) = 50
GPC of big risks = 25
Claims paid by reinsurers (excl. big risks) = 10
Claims paid by reinsurers of big risks = 5
Change in gross COP (excl. big risks) = 20
Change in gross COP of big risks = 10
Change in COP of reinsurers (excl. big risks) = -10
Change in COP of reinsurers of big risks = -3
o Previous year
GPC (excl. big risks) = 45
GPC of big risks = 20
Claims paid by reinsurers (excl. big risks) = 8
Claims paid by reinsurers of big risks = 5
Change in gross COP (excl. big risks) = 25
Change in gross COP of big risks = 15
Change in COP of reinsurers (excl. big risks) = -5
Change in COP of reinsurers of big risks = -3
o Two years ago
GPC (excl. big risks) = 40
GPC of big risks = 20
Claims paid by reinsurers (excl. big risks) = 10
Claims paid by reinsurers of big risks = 3
Change in gross COP (excl. big risks) = 20
Change in gross COP of big risks = 10
Change in COP of reinsurers (excl. big risks) = -10
Change in COP of reinsurers of big risks = -5
SOLUTION

Premiums method:
1. GWP current year = 100 + 30 x 150% = 145
Division:
2. Up to 61.3 mln x 18% = 11,034
3. Over 61.3 mln x 16% = 13,392
4. Total = (2) + (3) = 24,426
5. Conservation ratio = net claims paid and provisions over past 3 years
/ gross claims paid and provisions over past 3 years (min. 50%) =
(50+25+45+20+40+20+20+10+25+15+20+10-10-5-8-5-10-3-10-3-5-
3-10-5)/(50+25+45+20+40+20+20+10+25+15+20+10)= 74,33%
6. RSM = (4) x (5) = 18,156

Claims method:

1. Gross claims paid over past 3 years =

50+45+40+(25+20+20)x1,5=232,5
2. Change in gross COP over past 3 years =
(20+25+20)+(10+15+10)x1,5=117,5
3. Total cost of claims = (1) + (2) = 350
4. Average = 1/3 x (3) = 116,67
Division:
5. Up to 42,9 mil x 26% = 11,154
6. Over 42,9 mil x 23% = 16,967
7. Conservation ratio = 74,33%
8. RSM = [(5) + (6)]x(7) = 20,902

RSM (max of 2 methods) = 20,902