OSFI.MemoAA

Question 1

Identify 4 elements that should be included in the AAR (Appointed Actuary’s Report).

Answer 1

1. OPINION: on whether PolLiabs as determined by AA are fairly represented in insurer’s F/S
2. Detailed commentary
3. Detailed data
4. Detailed calculations

Question 2

Briefly explain what a Fall Letter is and what should the actuary disclose in the AAR.

Answer 2

A letter issued every Fall by the CIA, providing guidance to the AA regarding the AAR

DISCLOSE: deviations from guidance in Fall Letter

Question 3

Can AA’s valuation be different from amounts booked in A/R?

Answer 3

Yes, but if the difference is greater than the AA’s materiality standard, the AAR must provide an explanation

Question 4

Identify the 2 items in an unqualified opinion

Answer 4

1. The policy liabilities on the B/S make appropriate provision for all policy obligations
2. The Annual report fairly represents the results of the valuation

Question 5

AA’s main responsibility regarding data in the AAR?

Answer 5

That the data is RelSuff (reliable & sufficient) for valuation purposes

Question 6

What disclosures (3) are required by NEW AA in next AAR?

Answer 6

• DATES: outgoing AA exit date, incoming AA start date, OSFI notification date
• COMMUNICATION: between incoming AA and outgoing AA
• QUALIFICATIONS: of new AA

Question 7

What is the formula for ‘Loss Ratio’ for after 2022 - ( under IFRS17)

Answer 7

Loss Ratio = claims / insurance revenue