Cash Flow Testing / Asset Adequacy analysis
The primary purpose of CFT is to determine if reserves (and associated assets) are adequate to fund the policy requirements under reasonable (but not all) circumstances. Below is an example of the actuarial work we perform, and the output we provide. A testing date of 9/30 is frequently used. This allows us to identify management action that could offset any potential reserve adjustments prior to year-end. We generally are able to use this analysis to support the Actuarial Opinion as of 12/31 with minimal additional work.
Our Cash Flow Testing process includes the following activities:
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A complete report summarizing the interest risk profile of your business and expected cash flows will be provided:
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