Detroit Rims Day 2012 1.Company Data: Limited 2.Actuarial Information / Statistics: Limited...
-
Upload
julie-cole -
Category
Documents
-
view
217 -
download
0
description
Transcript of Detroit Rims Day 2012 1.Company Data: Limited 2.Actuarial Information / Statistics: Limited...
Detroit Rims Day 2012
1. Company Data: Limited 2. Actuarial Information / Statistics: Limited 3. Industry / Peer Information: Available 4. Coverage Features - Frequency / Severity
Combinations: High/Low 5. Program Features: Low Retention 6. Industry Segment: Stable 7. Company Type: Public 8. Company Qualitative Information: Limited 9. Financial Rating / Data: Available
Detroit Rims Day 2012
Sample Program Agreements
Different approaches
Different goals
Detroit Rims Day 2012
Timing of Adjustments: annually, Company shall review collateral
collateral will be reviewed periodically
at any time We deem necessary
at the time of each collateral adjustment
Detroit Rims Day 2012
Amount of Collateral:in an amount acceptable to the Company
sufficient to secure Your financial obligations
Detroit Rims Day 2012
Calculation of Collateral:calculated by Usin accordance with Our actuarial standards
Detroit Rims Day 2012
Calculation of Collateral:whether now existing or hereafter arisingstatistically expected development on Losses and ALAE reported to usobligations as You and we may agree
Detroit Rims Day 2012
Calculation of Collateral:based on our actuarial evaluation
of relevant statistical data including
available and credible data of Your losses
Detroit Rims Day 2012
Calculation of Collateral:Losses plus applicable incurred ALAE
times the applicable LDF
times the LCF
Detroit Rims Day 2012
Calculation of Collateral:plus the TPAF billed by Us
plus applicable LBA
Detroit Rims Day 2012
Calculation of Collateral:LDF used to compute the Security:
12 mo post policy – 1.35 Incurred Loss 24 mo post policy – 1.25 Incurred Loss 36 mo post policy – 1.10 Incurred Loss and subsequent
Detroit Rims Day 2012
Calculation of Collateral:required security, by line of coverage,
subtracting actual paid amounts from estimated ultimate loss figures
adding additional estimated loss exposure for the next 12 month
Detroit Rims Day 2012
Calculation of Collateral: subtracting future expected paid amounts
associated with all exposure years as of the end of the next 12 month
prospective exposure period
Detroit Rims Day 2012
Calculation of Collateral:consideration may be given to financial strength metrics to account for credit riskexplicit detail must be provided on the financial metrics and the affect on collateral
Detroit Rims Day 2012
Components of the collateral:incurred losses within the Loss Limits
any other fees, charges, or obligations
accrued interest on any unpaid balances
Detroit Rims Day 2012
Components of collateral:this Agreement and any similar primary casualty insurance policies with Us
costs Company incurs enforcing its rights regulatory or court fine or penalty related to the Applicable Policies
Detroit Rims Day 2012
Form of letter of credit:a clean, irrevocable letter of credit subject to a cross collateral agreement
Detroit Rims Day 2012
Form of letter of credit: negotiation credit (multiple partial draws
permitted) by sight draft without notation
Detroit Rims Day 2012
Form of letter of credit: Company as the beneficiary contain an evergreen clause be issued for a term of at least 12 months by a bank “satisfactory” to Company
Detroit Rims Day 2012
Form of letter of credit: To be “satisfactory,” a bank must be:
rated “C” or better
approved by the NAIC, and
otherwise acceptable to the Company in its sole and unreviewable discretion
Detroit Rims Day 2012
Form of letter of credit:
90 days from receipt of written notice
to provide a replacement Letter of Credit
Detroit Rims Day 2012
Questions ??