CAS Exam 6C - OSFI MCT
MCT Gross Capital Available components correct answers - qualifying category A
common shares
- contributed surplus
- retained earnings
- reserves
- accumulated other comprehensive income
- qualifying category B instruments
- qualifying category C instruments
- non controlling interests
MCT Gross Capital Available - components potentially affected by additions/deductions
correct answers - retained earnings
- reserves
- accumulated other comprehensive income
- qualifying category C instruments
Purpose of establishing a supervisory target MCT correct answers - early warning for
management
- threshold for OSFI intervention
- accounts for all risks in MCT ratio + non modeled risks, off B/s risks + margin
Insurance Risk correct answers Risk of loss from the potential for claims (from
policyholders and beneficiaries)
Insurance Risk - subcategories correct answers - Claims liabilities
- Premium liabilities
- Unregistered reinsurers
- self insured retention
- Catastrophes (mostly earthquakes)
Self-insured retention (SIR) correct answers Portion of loss payable by the
policyholder.
Condition for admitting recoverability of SIRs correct answers OSFI must be satisfied of
collectability
Market Risk correct answers Risk of loss from changes in various markets
Credit Risk correct answers Risk of loss from counter-parties' potential (inability or
unwillingness) to fully meet their contractual obligations towards the insurer.
MCT Gross Capital Available components correct answers - qualifying category A
common shares
- contributed surplus
- retained earnings
- reserves
- accumulated other comprehensive income
- qualifying category B instruments
- qualifying category C instruments
- non controlling interests
MCT Gross Capital Available - components potentially affected by additions/deductions
correct answers - retained earnings
- reserves
- accumulated other comprehensive income
- qualifying category C instruments
Purpose of establishing a supervisory target MCT correct answers - early warning for
management
- threshold for OSFI intervention
- accounts for all risks in MCT ratio + non modeled risks, off B/s risks + margin
Insurance Risk correct answers Risk of loss from the potential for claims (from
policyholders and beneficiaries)
Insurance Risk - subcategories correct answers - Claims liabilities
- Premium liabilities
- Unregistered reinsurers
- self insured retention
- Catastrophes (mostly earthquakes)
Self-insured retention (SIR) correct answers Portion of loss payable by the
policyholder.
Condition for admitting recoverability of SIRs correct answers OSFI must be satisfied of
collectability
Market Risk correct answers Risk of loss from changes in various markets
Credit Risk correct answers Risk of loss from counter-parties' potential (inability or
unwillingness) to fully meet their contractual obligations towards the insurer.
