Archives for Actuarial Concepts

SOA Exam MFE/3F free course materials and paid for online video courses for MFE exam 2011

1st August 2011 by under Actuarial Concepts, Finance Courses, Free Online courses     

MFE 3F: Financial Economics Segment of Society of Actuaries EXAM M/ 3F of CAS

The following free courses on financetrainingcourse.com cover various topics outlined in Society of Actuaries Learning Outcomes for Exam MFE, the Financial Economics Segment of Exam M and the CAS 3F exam.

As part of your preparation for your final attempt you have been looking for anything that can provide the extra edge for…

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Solvency II: Capital Requirements

18th January 2011 by Admin under Actuarial Concepts     
Solvency II

Solvency II is an EU legislation that sets out the capital requirement rules for direct life and non-life insurance and reinsurance companies which are already established or wish to be established within the European Union. Companies that fall within the scope of the Solvency II Directive and which meet its requirements will benefit from a single license to operate within all EU member states. Enforcement and implementation…

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Gratuity Valuation: IAS 19 Disclosures: Simple Example Continued

14th January 2011 by agnes under Actuarial Concepts     

 Pre-requisite to this post: Review of International Accounting Standard (IAS) 19- Employee Benefits

In order to illustrate the IAS Disclosures that will be prepared for the given simple example let us first assume the following:

Emily is the only employee covered by the plan The Fair Value of Plan assets for the year ended 31-December-2009 and 31-12-2010 are as follows: Year Fair Value of Plan Assets 2009 8,000 2010 10,000 There… Premium Courses Black Derman Toy Model Construction – EXCEL Example$64.99How to utilize results of a Black Derman Toy Model$14.49Building Maturity & Liquidity Profiles for Deposits and Advances$149.00ICAAP – Overview & Core Concepts$59.00

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IAS 19 Disclosures Example: Gratuity Cost and disclosure of Actuarial Assumptions

14th January 2011 by agnes under Actuarial Concepts     

In the previous post we looked at the IAS 19 Disclosure relating to the reconciliation of present value of defined benefit obligations and fair value of assets to the assets (liabilities) recognized in the balance sheet. In this post we illustrate the disclosure related to the expected gratuity expense that will be recognized in the following year. We also look at the disclosure made with regard to the actuarial…

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IAS 19 Disclosures Example: Reconciliation to Assets and Liabilities recognized on the balance sheet

14th January 2011 by agnes under Actuarial Concepts     

In the previous post we looked at IAS 19 Disclosures related to the reconciliation in the present value of defined benefit obligation and fair value of assets during the year. In this post we look at the disclosure showing the reconciliation of the actuarial liability and fair value of assets to the assets and liabilities that are recognized in the balance sheet.

a)      A reconciliation of the present value of…

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IAS 19 Disclosures Example: Reconciliation of Present Value of Defined Benefit Obligation and Fair Value of Assets

14th January 2011 by agnes under Actuarial Concepts     

In this and the following posts we will be looking at some of the disclosures that are made under the IAS 19 requirement. In particular in this post we will look at the disclosure of the company’s accounting policy relating to recognition of actuarial gains and losses, plan description and reconciliation or movement in the present value of defined benefit obligation and fair value of assets:

According to Section…

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Gratuity Valuation – A Simple Example Continued – Sensitivity Analysis

14th January 2011 by Admin under Actuarial Concepts     
Sensitivity Analysis

The results of the gratuity valuation need to be tested for their sensitivity to key actuarial assumptions. Continuing with our simple example, we have carried out a sensitivity analysis on the Discount Rate and Salary Increase assumptions below.

Firstly, we re-calculate the actuarial liability by varying the assumptions one at a time while keeping all other assumptions unchanged and see the impact on the funded status of the plan…

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Gratuity and Pension Actuarial Valuation Process Flow

10th January 2011 by Admin under Actuarial Concepts     

The flowchart below gives a pictorial view of the employee defined benefits (e.g. gratuity, pension) actuarial valuation process:

Step 1: Data Collection (e.g. employee data such as dates of birth and employment, salary, etc.; plan details; fund asset details; prior valuation reports and IAS disclosures; fund accounts including details of the fair value of plan assets at the beginning of period, actual return on plan assets, employer’s contributions…

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Gratuity Valuation – A Simple Example

10th January 2011 by Admin under Actuarial Concepts     
Liability Calculations – Defined Benefit Plan

Let us assume Emily is an employee of LifeCorp Inc. which has a gratuity plan that pays a lump sum benefit upon normal retirement age (r) of 60 years. The lump sum benefit is defined as follows:

Retirement Benefit = Final monthly salary per year of service

The salary is assumed to grow at a rate of 8% per annum. For simplicity let us…

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