Life Insurance Applications (LIA) Practice Questions - Life Insurance Applications (LIA) - Actuaries Institute Fellowship Program Exam

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A cohort of 10-year term life policies is underwritten. At initial recognition, the Present Value of Future Cash Inflows (premiums) is AUD 50,000,000, the Present Value of Future Cash Outflows (claims, expenses) is AUD 38,000,000, and the Risk Adjustment for non-financial risk is AUD 4,000,000. Under AASB 17, what is the initial Contractual Service Margin (CSM) for this cohort?

AUD 8,000,000 AUD 12,000,000 AUD 50,000,000 AUD 4,000,000

Correct Answer:

AUD 8,000,000

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