FSA courses

CP 341

Advanced Life Reinsurance

2 discussions

Explanation

CP 341: Reinsurance basis and counterparty risk remain after risk transfer

The ceded contract may respond differently from the underlying policies or the risk measure being managed. Counterparty performance and contract interpretation can leave residual risk.

Original practice scenario

In an original mortality scenario, compare recoveries under the treaty’s definitions with the insurer’s actual policy benefits. Identify exclusions, timing and collection exposure. Explain which residual risk the model includes and what requires contract or counterparty review.

Study check

Write the assumptions, the decision being supported and one limitation. Use the current course syllabus for the required terminology and scope; this introductory guide is not a complete course summary.

Reading sources

Official syllabus and resources

ActNet editorial guide · October 1, 2026 · Original illustrative examples.

0 repliesOct 1

Explanation

CP 341: Life reinsurance cash-flow benefit is not automatically capital relief

A treaty changes specified cash flows and risk sharing. Accounting recognition, capital treatment, counterparty exposure and contract conditions require separate evaluation. Do not infer a regulatory benefit from an economic recovery alone.

Original practice scenario

For an original quota-share arrangement, calculate ceded premiums, benefits and allowances before comparing net cash flows. Then list what must be checked for capital treatment in the applicable framework. A cash-flow spreadsheet does not establish eligibility by itself.

Study check

Reading sources

Official syllabus and resources

ActNet editorial guide · October 1, 2026 · Original illustrative examples.

0 repliesOct 1