IAI CM1 case studies
IAI CM1 · Put your knowledge to work in context.
CM1 is one of the early subjects in the Institute of Actuaries of India (IAI) actuarial examination series, and the IAI's own site describes the Institute as "a statutory body established under The Actuaries Act 2006 (35 of 2006) for regulation of profession of Actuaries in India." The exam is split evenly between two halves: Actuarial Mathematics and Statistics. The mathematics half builds the core life-contingent toolkit - survival models, life tables, assurance and annuity functions, premiums, reserves and multiple-decrement ideas. The IAI CM1 case studies are 5 cases and about 2,991 words.
1Negative Reserves on a Decreasing Term Block
A life insurer is valuing a block of 15-year decreasing term assurances issued to 45-year-old male non-smokers. The sum assured is ₹10,00,000 at outset and falls by ₹60,000 at the end of each policy year; premiums are level annual and payable throughout the term.
635 words, about 3 min2Competing Decrements in a Pension Scheme
A pension scheme for members aged exactly 60 provides a lump sum of ₹5,00,000 on ill-health retirement, payable at the end of the year of retirement, and ₹2,00,000 on death in service, also at the end of the year. There is no benefit on withdrawal.
595 words, about 3 min3Monthly Premium Conversion on an Endowment Assurance
A 35-year-old male is buying a 25-year endowment assurance with a sum assured of ₹20,00,000. The office quotes an annual premium of ₹54,000, calculated on a gross premium basis at 5% interest using a standard mortality table.
660 words, about 3 min4Credibility Rating for a Group Health Renewal
A group health insurer must renew an employer’s policy covering 500 lives. The manual premium is ₹20,000 per life-year, built on an expected claim cost of ₹12,000 per life-year plus expenses and risk margin.
557 words, about 3 min5Age Confounding in a Smoker Mortality Comparison
An insurer is reviewing mortality in two underwriting classes. Class A (smokers) has 20,000 lives and 120 deaths in the year; Class B (non-smokers) has 18,000 lives and 80 deaths.
544 words, about 3 min