Acronyms Flashcards
1
Q
Contract design stakeholders
A
- A - Actuaries
- L - Lawyers
- P - Providers of benefits
- A - Accountants
- C - Customers
- A - Administrator
- S - Shareholders
2
Q
Contract design factors
A
- A - Administration systems
- M - Marketability
- P - Profitability
- L - Level and form of benefits
- E - Early leaver benefits
- D - Discretionary benefits
- I - Interests and needs of customers
- R - Risk appetite of the parties involved
- E - Expenses vs charges
- C - Competition
- T - Terms and conditions of contract
- F - Financing (capital requirements)
- A - Accounting implications
- C - Consistency with other products
- T - Timing of contributions or premiums
- O - Options and guarantees
- R - Regulatory requirements
- S - Subsidies (cross)
3
Q
Considerations when using past data to set future assumptions
A
- B - Balance of homogenous groups underlying the data may have changed
- E - Economic situation may have changed
- S - Social conditions may have changed
- T - Trends over time, eg medical, demographic
- A - Abnormal fluctuations
- R - Random fluctuations
- C - Changes in regulation
- H - Heterogeneity within the group to which the assumptions will apply
- E - Errors in data
- R - Recording differences (eg in categorisation of smoker)
4
Q
Characteristics of a prime property
A
- C - Comparable properties for rent reviews and valuation
- A - Age, condition and flexibility of use
- L - Location
- L - Lease structure
- S - Size
- T - Tenant quality
5
Q
Practical problems with overseas investments
A
- C - Custodian needed
- A - Additional admin required
- T - Time delays
- W - Expenses incurred / expertise needed
- R - poor Regulation
- P - Political instability
- I - Information harder to obtain (and less of it)
- L - Language difficulties
- L - Liquidity problems
- A - Accounting differences
- R - Restrictions on foreign ownership / repatriation problems
6
Q
Expenses incurred by a product provider
A
- C - Commission
- O - Overheads
- S - Sales / advertising
- T - Terminal, eg paying benefits
- R - Renewal administration, eg collecting premiums / contributions
- A - Asset management
- I - Initial administration, eg setting up new client records
- D - Design of the contract
7
Q
External environment factors
A
- C - Corporate structure (mutual vs. proprietaries)
- R - Regulation and legislation
- E - Environmental issues and climate change
- A - Accounting standards
- T - Tax
- E - Economic outlook (eg interest rates, inflation, growth)
- G - Governance
- R - Risk management requirements
- A - Adequacy of capital and solvency
- N - New business environment
- D - Demographic trends
- L - Lifestyle considerations
- I - International practice
- S - State benefits
- T - Technology
- S - Social and cultural trends
8
Q
Inappropriate advice
A
- C - Complicated products
- R - Rubbish (ie incompetent) advisor
- I - Integrity of advisor lacking, eg due to sales-related payments
- M - Model or parameter errors
- E - Errors in data relating to members
- S - State-encouraged but inappropriate actions
9
Q
Reasons for using ART
A
- D - Diversification
- E - Exploits risk as an opportunity
- S - Solvency improves / source of capital
- C - Cheaper cover than reinsurance
- A - Available when reinsurance may not be
- R - Results smoothed
- T - Tax advantages
- E - Efficient risk management tool
- S - Security of payments improved
10
Q
Reasons for analysis surplus
A
- D - Divergence of actual vs expected (show financial effect /significance of)
- I - Information to management and for accounts
- V - Variance of whole is equal to the sum of the variances from the individual levers
- E - Experience monitoring to feedback into ACC
- R - Reconcile values for successive years
- G - Group into one-off / recurring sources of surplus
- E - Executive remuneration schemes (data for)
- N - New business strain (show effects of)
- C - Check on valuation assumptions and calculations
- E - Extra check on valuation data and process
11
Q
Considerations in assessing different models
A
- F - Fit for purpose
- E - Expertise available in house
- N - Need flexibility
- C - Cost of each option
- E - Expected number of times used
- D - Desired accuracy
12
Q
Economic situations in which cash is attractive
A
G - General economic uncertainty
R - Recession expected
I - Interest rates expected to rise
D - Depreciation of domestic currency expected
13
Q
Factors to consider when setting assumptions
A
- L - Legislation / regulation
- U - Use of the data
- N - Needs of the client
- C - Consistency between assumptions
- H - How financially significant is/are the assumption(s)
14
Q
Main difficulties of overseas investment
A
- M - Mismatching domestic liabilities
- T - Taxation (may not be able to recover withholding taxes paid)
- V - Volatility of currency
15
Q
Aims of a regulator
A
- G - Give confidence in the system
- R - Reduce financial crime
- I - Inefficiencies in the market corrected (and efficient and orderly markets promoted)
- P - Protect consumers
