IAI CP1 case studies

IAI CP1 · Put your knowledge to work in context.

CP1 is one of the actuarial examinations administered by the Institute of Actuaries of India (IAI), a statutory body established under The Actuaries Act 2006 (35 of 2006), whose provisions came into force on 10 November 2006 following a Government of India notification issued through the Ministry of Finance, Department of Economic Affairs. The IAI lists CP1 within its Actuarial Examination section, which publishes exam fees, syllabus, results, the list of exam centres, exam announcements, exam policies and guidelines, examination dates, and question papers with solutions. The IAI CP1 case studies are 5 cases and about 4,423 words.

Participating fund bonus decision under a falling yield environment

Sunrise Life's participating fund holds ₹8,200 crore of assets: 62% in government securities with a book yield of 7.1% and an average duration of 9.4 years, 24% in equities and 14% in AA corporate bonds. Over the last 18 months the 10-year G-sec yield has fallen from 7.6% to 6.5%, while the fund's liabilities have a duration of about 14 years.

907 words, about 5 min 2

Commercial-vehicle third-party reserving and pressure to release IBNR

Meridian General has grown its commercial-vehicle third-party liability book from ₹180 crore to ₹540 crore of premium in three years by writing larger fleets. The incurred claims ratio for the latest year is 118%, and the actuarial central estimate of outstanding claims, including IBNR, is ₹6,100 million against held reserves of ₹4,500 million.

877 words, about 4 min 3

Gratuity scheme valuation, sponsor distress and a proposed NPS switch

Zenith Technologies sponsors a funded gratuity scheme covering 14,000 employees. The trust's assets are ₹3,100 million against an Ind AS 19 defined benefit obligation of ₹4,350 million, and 78% of the assets are in equity mutual funds.

888 words, about 4 min 4

Pricing a large group health renewal with thin, aggregated experience

BlueShield Health is quoting for a 9,000-life corporate group with dependants. The broker has supplied only three years of aggregate loss ratios from the incumbent insurer - 71%, 84% and 96% - with no age, gender or claims-category breakdown.

886 words, about 4 min 5

Certifying a portfolio transfer under pressure and with a conflicted interest

You are the appointed actuary of Horizon Life, which proposes to transfer a closed block of 55,000 non-participating annuity policies to a smaller specialist insurer under a regulatory transfer scheme. The transferor would move ₹1,950 crore of assets against liabilities you calculate at ₹2,080 crore; the shortfall is to be met by a five-year letter of comfort from the parent, whose credit rating was cut to BBB last quarter.

865 words, about 4 min