ALBERTA MUNICIPAL INSURANCE EXCHANGE

Notes to the Financial Statements

Year ended December 31, 2022, with comparative information for 2021

4. Role of the actuary and auditors:

The actuary is appointed by the advisory board of the Exchange and is responsible for ensuring that the assumptions and methods for the valuation of the policy liabilities are in accordance with accepted actuarial practice, applicable legislation and associated regulations and directives. The actuary is required to provide an opinion on the appropriateness of the policy liabilities at the statement of financial position date to meet all policyholder obligations of the Exchange. The work to form that opinion includes an assessment of the sufficiency and reliability of policy data and an analysis of the ability of the assets to support the policy liabilities. In carrying out this assessment, the actuary makes use of the work of the external auditor with respect to tests of the data used in the valuation. The actuary's report outlines the scope of their work and opinion. The actuary is also required each year to analyze the financial condition of the Exchange and prepare a report for the advisory board.

The external auditors have been appointed by the advisory board of the Exchange pursuant to the Act to conduct an independent and objective audit of the financial statements of the Exchange in accordance with Canadian generally accepted auditing standards and to report thereon to the subscribers. In carrying out their audit, the auditors also make use of the work of the actuary and their report on the Exchange's policy liabilities. The auditors' report outlines the scope of their audit and their opinion.

5. Investments:

The fair values of investments classified as FVTPL are summarized as follows:

Treasury bills are managed as a component of the Exchange's investment portfolio.

The average net annual rate of return for the year ended December 31, 2022 based on the fair value of the Exchange's investment portfolio is negative 2.93% (2021 - 3.90%).

Fair value hierarchy

The Exchange has segregated all financial assets that are measured at fair value into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. The table below analyzes financial instruments carried at fair value by valuation method.