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The Actuary's Free Study Guide for the Old Exam 6
First Edition Published in July-October 2010
Second Edition Published in July 2014
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Click here to download a free PDF copy of the Second Edition of this study guide.
This free study guide is intended to assist students preparing for the old Casualty Actuarial Society (CAS) Exam 6, major components of which have become parts of the new Exams 5B and 7. You are welcome to use these materials at no cost. However, if you also wish to support this effort through a donation, click the "Donate" button above.
Supplementary Materials
Conciseness on Actuarial Essay Exams
Relevant Sections from the Study Guide for the Old Exam 6 Study Guide
Section 1: Basic Concepts Regarding Unpaid Claim Estimation
Section 3: Basic Concepts Regarding Data Used in Estimating Unpaid Claims
Section 5: Basic Concepts Regarding Data Aggregation and Other Data Treatments in Unpaid Claim Estimation
Section 7: Actuarial Reserving Definitions and Principles
Section 9: Actuarial Reserving Considerations
Section 11: Development Triangles*
*Note that Section 11 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 13: Actuarial Triangles Involving Reported Claims, Paid Claims, and Earned Premium
Section 15: Uses of Actuarial Triangles for Claims and Claim Counts to Evaluate an Insurer's Situation
Section 17: Concepts Involved in the Chain Ladder Method
Section 19: Applications of the Chain Ladder Method
Section 23: Concepts Involved in the Expected Claims Method
Section 25: The Expected Claims Method*
*Note that Section 25 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 26: The Bornhuetter-Ferguson and Benktander Methods*
*Note that Section 26 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 27: The Cape Cod / Stanard-Bühlmann Method*
*Note that Section 27 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 28: Frequency-Severity Approaches to Unpaid Claim Estimates - Part 1*
*Note that Section 28 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 29: Frequency-Severity Approaches to Unpaid Claim Estimates - Part 2*
*Note that Section 29 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 32: Frequency-Severity Approaches to Unpaid Claim Estimates - Part 3*
*Note that Section 32 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 33: The Case Outstanding Development Method*
*Note that Section 33 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 34: Estimation of Salvage and Subrogation Recoveries*
*Note that Section 34 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 35: Impact of Reinsurance on Unpaid Claim Estimates*
*Note that Section 35 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 36: The Berquist-Sherman Method*
*Note that Section 36 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 39: Estimation of Unpaid Allocated Loss Adjustment Expenses*
*Note that Section 39 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 40: Retrospective Evaluation of Unpaid Claim Estimates*
*Note that Section 40 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 41: The Classical Method of Estimating Unpaid Unallocated Loss Adjustment Expenses*
*Note that Section 41 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 42: The Kittel and Mango-Allen Refinements to the Classical Method of Estimating Unpaid Unallocated Loss Adjustment Expenses*
*Note that Section 42 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 43: The Conger-Nolibos Method of Estimating Unpaid Unallocated Loss Adjustment Expenses*
*Note that Section 43 is a Microsoft Excel file. Clicking on the link will prompt a download.
Section 57: Calculation of Premium Development to Loss Development Ratios for Retrospectively Rated Insurance Policies
Section 58: Calculation of Cumulative Premium Development to Loss Development Ratios and Premium Assets for Retrospectively Rated Insurance Policies
Section 59: Analysis of the PDLD Approach to Estimating the Premium Asset for Loss-Sensitive Contracts
Section 63: Approaches to Reserving for Workers' Compensation High Deductible Policies*
*Note that Section 63 is a Microsoft Excel file. Clicking on the link will prompt a download.
Inexhaustible Exam-Style Questions
(Macro-enabled Excel workbooks, allowing re-randomization of values)
Question Based on Spring 2011 Exam 7, #1(a)
Question Based on Spring 2011 Exam 7, #2
Question Based on Spring 2011 Exam 7, #3(a)
Question Based on Spring 2011 Exam 7, #4(a)
Question Based on Spring 2011 Exam 7, #5(a)
Question Based on Spring 2011 Exam 7, #6(a) and (b)
Question Based on Spring 2011 Exam 7, #7(a)
Question Based on Spring 2011 Exam 7, #8
Question Based on Spring 2011 Exam 7, #9(a)
Question Based on Spring 2011 Exam 7, #10(a) and (c)
Question Based on Spring 2011 Exam 7, #12(a) and (b)
Question Based on Spring 2011 Exam 7, #13(a)
Question Based on Spring 2011 Exam 7, #17
Question Based on Spring 2011 Exam 7, #19(b)
Question Based on Spring 2011 Exam 7, #21(a)
PDF Study Guides
Study Guide on the International Actuarial Association's "A Global Framework for Insurer Solvency Assessment"
Study Guide on Actuarial Aspects of Internal Models for Solvency II
Study Guide on "Operational Risk in Perspective"
Study Guide on Dependency Modeling
Study Guide on Tails of Copulas
Study Guide on Modeling Financial Series
Study Guide on ERM for Strategic Management
Study Guide on Non-tail Risk Measures
Study Guide on Measuring the Variability of Chain-Ladder Reserve Estimates
Study Guide on Testing the Assumptions of Age-to-Age Factors
Study Guide on the Value of Risk Reduction
Study Guide on the Extreme-Value Theory
Exam-Style Questions Relevant to the New CAS Exam 5B
Exam-Style Questions Relevant to the New CAS Exam 7
Table of Contents
|
Section |
Page |
|
Section 1: Basic Concepts Regarding
Unpaid Claim Estimation |
4 |
|
Section 2: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 1 |
7 |
|
Section 3: Basic
Concepts Regarding Data Used in Estimating Unpaid Claims |
13 |
|
Section 4: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 2 |
16 |
|
Section 5: Basic
Concepts Regarding Data Aggregation and Other Data Treatments in Unpaid Claim
Estimation |
20 |
|
Section 6: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 3 |
23 |
|
Section 7: Actuarial
Reserving Definitions and Principles |
26 |
|
Section 8: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 4 |
29 |
|
Section 9: Actuarial
Reserving Considerations |
34 |
|
Section 10: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 5 |
37 |
|
Section 11: Development
Triangles |
40 |
|
Section 12: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 6 |
41 |
|
Section 13: Actuarial
Triangles Involving Reported Claims, Paid Claims, and Earned Premium |
45 |
|
Section 14: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 7 |
50 |
|
Section 15: Uses of
Actuarial Triangles for Claims and Claim Counts to Evaluate an Insurer's
Situation |
55 |
|
Section 16: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 8 |
58 |
|
Section 17: Concepts
Involved in the Chain Ladder Method |
63 |
|
Section 18: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 9 |
66 |
|
Section 19: Applications
of the Chain Ladder Method |
69 |
|
Section 20: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 10 |
72 |
|
Section 21: Financial
Accounting Standards for Loss Contingencies |
76 |
|
Section 22: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 11 |
79 |
|
Section 23: Concepts
Involved in the Expected Claims Method |
82 |
|
Section 24: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 12 |
85 |
|
Section 25: The
Expected Claims Method |
89 |
|
Section 26: The
Bornhuetter-Ferguson and Benktander Methods |
89 |
|
Section 27: The
Cape Cod / Stanard-Bühlmann Method |
90 |
|
Section 28: Frequency-Severity
Approaches to Unpaid Claim Estimates - Part 1 |
90 |
|
Section 29: Frequency-Severity
Approaches to Unpaid Claim Estimates - Part 2 |
90 |
|
Section 30: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 13 |
91 |
|
Section 31: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 14 |
96 |
|
Section 32: Frequency-Severity
Approaches to Unpaid Claim Estimates - Part 3 |
102 |
|
Section 33: The
Case Outstanding Development Method |
102 |
|
Section 34: Estimation
of Salvage and Subrogation Recoveries |
102 |
|
Section 35: Impact
of Reinsurance on Unpaid Claim Estimates |
102 |
|
Section 36: The
Berquist-Sherman Method |
103 |
|
Section 37: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 15 |
104 |
|
Section 38: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 16 |
110 |
|
Section 39: Estimation
of Unpaid Allocated Loss Adjustment Expenses |
118 |
|
Section 40: Retrospective
Evaluation of Unpaid Claim Estimates |
118 |
|
Section 41: The
Classical Method of Estimating Unpaid Unallocated Loss Adjustment Expenses |
118 |
|
Section 42: The
Kittel and Mango-Allen Refinements to the Classical Method of Estimating
Unpaid Unallocated Loss Adjustment Expenses |
119 |
|
Section 43: The
Conger-Nolibos Method of Estimating Unpaid Unallocated Loss Adjustment
Expenses |
119 |
|
Section 44: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 17 |
120 |
|
Section 45: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 18 |
126 |
|
Section 46: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 19 |
132 |
|
Section 47: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 20 |
137 |
|
Section 48: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 21 |
142 |
|
Section 49: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 22 |
147 |
|
Section 50: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 23 |
151 |
|
Section 51: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 24 |
155 |
|
Section 52: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 25 |
160 |
|
Section 53: Principles
and Criteria of Insurance Accounting |
167 |
|
Section 54: Assorted
Exam-Style Questions for Actuarial Exam 6 – Part 26 |
171 |
|
Section 55: Basic
Principles of Premium Accounting |
178 |
|
Section 56: Intermediate
Principles of Premium Accounting |
182 |
|
Section 57: Calculation
of Premium-Development-to Loss-Development Ratios for Retrospectively Rated
Insurance Policies |
185 |
|
Section 58: Calculation
of Cumulative Premium- Development-to-Loss-Development Ratios and Premium
Assets for Retrospectively Rated Insurance Policies |
188 |
|
Section 59: Analysis
of the PDLD Approach to Estimating the Premium Asset for Loss-Sensitive Contracts |
193 |
|
Section 60: Reinsurance
Pricing Concepts |
197 |
|
Section 61: Reinsurance
Pricing Concepts – Part 2 |
200 |
|
Section 62: Exposure
Rating for Property Excess-of-Loss Reinsurance |
203 |
|
Section 63: Approaches
to Reserving for Workers' Compensation High-Deductible Policies |
203 |
|
Section 64: Characteristics
of Excess Loss Development |
204 |
|
Section 65: Calculation
of Loss Development Factors for Excess Loss Layers |
207 |
|
Section 66: Characteristics
of Excess Loss Development – Part 2 |
210 |
|
Section 67: Reserve
Estimation Using the Extended Link Ratio Family and the Probabilistic Trend
Family of Models |
213 |
|
About Mr.
Stolyarov |
223 |
Gennady Stolyarov II (G. Stolyarov II) is an actuary, science-fiction novelist, independent philosophical essayist, poet, amateur mathematician, composer, and Editor-in-Chief of The Rational Argumentator, a magazine championing the principles of reason, rights, and progress.
In December 2013, Mr. Stolyarov published Death is Wrong, an ambitious children’s book on life extension illustrated by his wife Wendy. Death is Wrong can be found on Amazon in paperback and Kindle formats.
Mr. Stolyarov has contributed articles to the Institute for Ethics and Emerging Technologies (IEET), The Wave Chronicle, Le Quebecois Libre, Brighter Brains Institute, Immortal Life, Enter Stage Right, Rebirth of Reason, The Liberal Institute, and the Ludwig von Mises Institute. Mr. Stolyarov also published his articles on Associated Content (subsequently the Yahoo! Contributor Network) from 2007 until its closure in 2014, in an effort to assist the spread of rational ideas. He held the highest Clout Level (10) possible on the Yahoo! Contributor Network and was one of its Page View Millionaires, with over 3.1 million views.
Mr. Stolyarov holds the professional insurance designations of Associate of the Society of Actuaries (ASA), Associate of the Casualty Actuarial Society (ACAS), Member of the American Academy of Actuaries (MAAA), Chartered Property Casualty Underwriter (CPCU), Associate in Reinsurance (ARe), Associate in Regulation and Compliance (ARC), Associate in Personal Insurance (API), Associate in Insurance Services (AIS), Accredited Insurance Examiner (AIE), and Associate in Insurance Accounting and Finance (AIAF).
Mr. Stolyarov has written a science fiction novel, Eden against the Colossus, a philosophical treatise, A Rational Cosmology, a play, Implied Consent, and a free self-help treatise, The Best Self-Help is Free. You can watch his YouTube Videos. Mr. Stolyarov can be contacted at gennadystolyarovii@gmail.com.
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Learn about Mr. Stolyarov's novel, Eden against the Colossus, here.Read Mr. Stolyarov's comprehensive treatise, A Rational Cosmology, explicating such terms as the universe, matter, space, time, sound, light, life, consciousness, and volition, here.