RE: NAIC IRIS Ratios

( Victoria.Lusk@dora.state.co.us )
Tue, 10 Mar 1998 09:32:15 -0700

I cross checked to the most recent NAIC listing (for year end 1996) and
Troxel is correct. The problem is that the normal ranges (and the tests
themselves) are reviewed and revised by the NAIC periodically, so any
source more than a year or two old is likely to be wrong (especially on
#5; the investment yield ratio ranges seem to change quite often).
Keep that in mind if you actually use them, instead of just study them
for the test!

Victoria

>----------
>From: dperry@UNIGARD.COM[SMTP:dperry@UNIGARD.COM]
>Sent: Monday, March 09, 1998 6:15 PM
>To: studygroup8@lists.casact.org
>Subject: NAIC IRIS Ratios
>
>On this exam, we have two different source readings which discuss the NAIC
>IRIS Ratios. One of them is the D'Arcy article, and the other is the Troxel
>and Bouchie article. There are some discrepancies with regard to the "usual
>ranges" of these ratios. For example,
>
>(3) Surplus Aid to Surplus:
>D'Arcy: <25%
>Troxel: <15%
>
>(5) Investment Yield:
>D'Arcy: >5%
>Troxel: between 4.5% and 10%
>
>(9) One Year Reserve Development to Surplus:
>D'Arcy: <25%
>Troxel: <20%
>
>(10) Two Year Reserve Development to Surplus:
>D'Arcy: <25%
>Troxel: <20%
>
>According to the Syllabus, D'Arcy was published 1996, and Troxel was
>published in 1995, so I would be inclined to believe the former rather than
>the latter. However, the D'Arcy paper was part of the Foundations book,
>which was re-released in 1996, and it is possible that the IRIS values were
>not updated for the new release. Do any of you know for sure?
>