C4 Flashcards

Question

444 CIA.DCAT 4: REPORTING Qz-5 intro:**Purpose of DCAT report**

Answer 1

444 CIA.DCAT 4: REPORTING Qz-5 intro:**Purpose of DCAT report** 1. COMMUNICATION to Board of Directors: identify risks & ways to reduce risk 2. IN OTHER WORDS: report on the financial condition of insurer & things to improve

Answer 2

445 CIA.DCAT 4: REPORTING Qz-5 intro:**What are the different audiences for a DCAT report (3)** Bmr 1. Board of Directors: prefers an interpretive summary versus a detailed statistical report 2. Management: receives a more detailed report 3. Regulator: focuses on solvency issues

Answer 3

446 *E (2018.Fall 20f.) 0.500 pts* CIA.DCAT 4: REPORTING Qz-5 intro:**When can actuary report that the financial condition of an insurer is satisfactory** * For (BASE scenario): 1. supervisory capital requirements must be met 2. which means MCT \> 150% (ALL YRS) * For (BASE scenario, all PAS): 1. assets \> liabilities (ALL YRS)

Answer 4

447 *E (2018.Spring 19d.) 0.500 pts* CIA.DCAT 4: REPORTING intro:**When can actuary report that the financial condition of an insurer is satisfactory** * For (BASE scenario): 1. supervisory capital requirements must be met 2. which means MCT \> 150% (ALL YRS) * For (BASE scenario, all PAS): 1. assets \> liabilities (ALL YRS)

Answer 5

448 CIA.DCAT AppB: RISK CATEGORIES Qz-6 AppB intro:**What are the P&C Insurer Risk Categories pertaining to DCAT** F-PIP-RIGOR * F: 1. Frequency & severity * PIP: 1. Policy liabilities 2. Inflation 3. Premium * RIGOR: 1. Reinsurance & counter-parties 2. Investment risk 3. Government risk 4. Off-B/S risk 5. Related company risk

Answer 6

449 CIA.DCAT AppB: RISK CATEGORIES Qz-6 AppB:**(B.1) give examples of causes, ripple effects, and management actions for the Frequency & Severity risk category** 1. CAUSE: catastrophe, social inflation 2. RIPPLE EFFECT: post-event inflation, loss of reinsurance 3. MANAGEMENT ACTIONS: raise rates, review reinsurance

Answer 7

450 *E (2013.Fall 29d.) 0.500 pts* CIA.DCAT AppB: RISK CATEGORIES Qz-6 AppB:**(B.2) give examples of causes, ripple effects, and management actions for the Policy Liabilities risk category** 1. CAUSE: inadequate LDFs, class action lawsuits 2. RIPPLE EFFECTS: forced sale or liquidation, rating agency downgrade 3. MANAGEMENT ACTIONS: increase rates, review mix

Answer 8

451 CIA.DCAT AppB: RISK CATEGORIES Qz-6 AppB:**(B.3) give examples of causes, ripple effects, and management actions for the Inflation risk category** 1. CAUSE: (rapid, sustained) increase OR (temporary) increase in (labour, materials) due to catastrophe 2. RIPPLE EFFECTS: increase in operating costing, reinsurance 3. MANAGEMENT ACTIONS: increase rates, review mix

Answer 9

452 CIA.DCAT AppB: RISK CATEGORIES Qz-6 AppB:**(B.4a) give examples of causes, ripple effects, and management actions for the Premium risk category (higher volume than expected)** 1. CAUSE: inadequate rates, withdrawal of competitor 2. RIPPLE EFFECTS: deteriorating LR, increased expenses (new staff, overtime) 3. MANAGEMENT ACTIONS: raise rates, hire more staff

Answer 10

453 *E (2013.Fall 29c.) 0.500 pts* CIA.DCAT AppB: RISK CATEGORIES Qz-6 AppB:**(B.4b) give examples of causes, ripple effects, and management actions for the Premium risk category (lower volume than expected)** 1. CAUSE: rates too high, new competitor 2. RIPPLE EFFECTS: mix shift, increased fixed exp ratio 3. MANAGEMENT ACTIONS: review mix, lower rates

Answer 11

454 CIA.DCAT AppB: RISK CATEGORIES Qz-6 AppB:**(B.5) give examples of causes, ripple effects, and management actions for the Reinsurance & counterparty risk category** 1. CAUSE: reinsurer insolvency, reinsurer dispute 2. RIPPLE EFFECTS: reinsurance rate increase for replacement reinsurer, reduced reimbursement 3. MANAGEMENT ACTIONS: review reinsurance: diversify or change reinsurer

Answer 12

455 CIA.DCAT AppB: RISK CATEGORIES Qz-6 AppB:**(B.6) give examples of causes, ripple effects, and management actions for the Investment risk category** 1. CAUSE: significant change in yield curve, decrease in returns on equity investments 2. RIPPLE EFFECTS: forced sale or liquidation, significant change in cash flows 3. MANAGEMENT ACTIONS: sell assets, change investment strategy

Answer 13

456 CIA.DCAT AppB: RISK CATEGORIES Qz-6 AppB:**(B.7) give examples of causes, ripple effects, and management actions for the Govt risk category** 1. CAUSE: rate freeze/rollback, change in solvency standards requiring increase in capital 2. RIPPLE EFFECTS: LR up, forced sale 3. MANAGEMENT ACTIONS: tighten U/W, review reinsurance and/or mix of business

Answer 14

457 *E (2017.Fall 22c.) 0.750 pts* CIA.DCAT AppB: RISK CATEGORIES Qz-6 AppB:**(B.8a) give examples of causes, ripple effects, and management actions for the Off-B/S risk category** 1. CAUSE: derivative risk, pension underfunding 2. RIPPLE EFFECTS: forced sale or liquidation, significant changes in cash flows 3. MANAGEMENT ACTIONS: reposition derivatives, change pension from defined benefit to defined contribution

Answer 15

458 CIA.DCAT AppB: RISK CATEGORIES Qz-6 AppB:**(B.8b) explain what is meant by 'derivatives' risk** mkt = liq + bas * Components of derivative risk are liquidity risk & basis risk 1. Liquidity risk means: can't unwind contract (when desired or for a low price) 2. Basis risk means: price behavior unexpected; undoes hedging

Answer 16

459 CIA.DCAT AppB: RISK CATEGORIES Qz-6 AppB:**(B.9) give examples of causes, ripple effects, and management actions for the Related company risk category** 1. CAUSE: reduction in parent support, rating agency downgrade at group level 2. RIPPLE EFFECTS: management too focused on group - delays remediation for individual insurer 3. MANAGEMENT ACTIONS: find alternate sources of funding

Answer 17

468 *E (2017.Fall 23b.) 1.000 pts* CIA.DCAT Supp: Extra Exam Problems Qz-5 AppB misc:**For a premium volume adverse scenario, describe a (i) cause, (ii) adverse assumption, (iii) ripple effect (iv) mgmt action** 1. (i) cause: relaxation of U/W standards 2. (ii) adverse assumption: large increase in premium 3. (iii) ripple effect: deteriorating loss ratio 4. (iv) management action: raise rates

Answer 18

479 *E (2017.Fall 22b.) 0.750 pts* CIA.DCAT Supp: Extra Exam Problems Qz-7 AppB misc:**Define social inflation and it's effect on a company** * it is claims inflation resulting from: changes in (likelihood, size) of claims, standards of liability, attitudes of claimants * Increased claims may cause increase in reserves and higher rates

Answer 19

484 *E (2016.Fall 20a.) 0.500 pts* OSFI.STRESS ABC: DEFN, PURPOSE, ROLE (Board of Directors,Mgmt) Qz-1 intro:**Defn of 'stress-testing' (general)** a risk management technique.. * A risk management technique 1. ==\> TO EVALUATE effects on financial condition.. 2. ==\> due to SPECIFIED CHANGES in risk factors.. 3. ==\> corresponding to exceptional but plausible events

Answer 20

485 *E (2017.Fall 24.i) 2.000 pts* OSFI.STRESS ABC: DEFN, PURPOSE, ROLE (Board of Directors,Mgmt) Qz-1 intro:**QUIK-SUMM - purpose of stress-testing (4)** risk, complement, Cap-Liq 1. RISK: * Identify & control risk 2. COMPLEMENT: * Provide a complement to other risk management tools + simulate shocks 3. CAPITAL MANAGEMENT: * Support capital management 4. LIQUIDITY MANAGEMENT: * Improve liquidity management

Answer 21

486 *E (2017.Fall 24b.ii) 0.000 pts* OSFI.STRESS ABC: DEFN, PURPOSE, ROLE (Board of Directors,Mgmt) Qz-1 purpose:**Describe - risk ID, control (regarding purpose of stress-testing)** id concentrations, adjust portfolios 1. Risk ID: * Identify concentrations & interactions of risks 2. Risk CONTROL: * Adjust individual portfolios & overall business strategy

Answer 22

487 *E (2017.Fall 24b.iii) 0.000 pts* OSFI.STRESS ABC: DEFN, PURPOSE, ROLE (Board of Directors,Mgmt) Qz-1 purpose:**Describe - complementing other tools (regarding purpose of stress-testing)** value at risk, simulate shocks.. 1. Test statistical models USED to determine VaR (Value at Risk) 2. Simulate SHOCKS to test model robustness to economic changes

Answer 23

488 *E (2017.Fall 24b.iv) 0.000 pts* OSFI.STRESS ABC: DEFN, PURPOSE, ROLE (Board of Directors,Mgmt) Qz-1 purpose:**Describe - supporting Capital Management (regarding purpose of stress-testing)** severe/compounding events * Identify SEVERE events and/or COMPOUNDING events that impact capital requirements

Answer 24

489 *E (2017.Fall 24b.v) 0.000 pts* OSFI.STRESS ABC: DEFN, PURPOSE, ROLE (Board of Directors,Mgmt) Qz-1 purpose:**Describe - improving Liquidity Management (regarding purpose of stress-testing)** assess liquidity profile.. * ASSESS liquidity profile & adequacy of buffers FOR institutional & market-wide stresses

Answer 25

490 *E (2018.Fall 22a.) 0.500 pts* OSFI.STRESS ABC: DEFN, PURPOSE, ROLE (Board of Directors,Mgmt) Qz-1 purpose:**Describe how stress-testing is a key risk management tool for coverage of overland flooding** * Company won't have historical data 1. ==\> identify flood risks using stress-testing models 2. ==\> estimate capital required to support flood risk in different scenarios 3. ==\> stress-testing could complement publicly available flood data

Answer 26

491 *E (2018.Fall 22b.) 0.500 pts* OSFI.STRESS ABC: DEFN, PURPOSE, ROLE (Board of Directors,Mgmt) Qz-1 role (Board of Directors, Mgmt):**Describe board versus management responsibilities regarding a stress-testing program (3,3)** * Board of Director's responsibilities: 1. Ultimate responsibility for program 2. Ensures implementation of program by management 3. Should be aware of key findings * Management's responsibilities: 1. Implement & manage stress-testing program 2. Identify PAS (Plausible Adverse Scenario) 3. Develop& implement risk mitigation strategies

Answer 27

492 *E (2014.Spring 27b.) 1.500 pts* OSFI.STRESS D: GENERAL CONSIDERATIONS Qz-2 gen:**Rudimentary stress-testing considerations (4)** RUDI 1. RANGE: (range of perspectives, techniques) * Perspectives: consult economists, actuaries, others * Techniques: qualitative, quantitative 2. UPDATES: (update stress-testing framework regularly) * Monitor EFFECTIVENESS of framework with (qualitative, quantitative) measures & UPDATE accordingly * Elements of a framework include: docs, data quality, assumptions,.. 3. DOCS: * Provide written docs of assumptions & fundamental elements of scenarios 4. INFRASTRUCTURE: (should be flexible) * Should allow increase in SENSITIVITY TESTING in times of rapid change * Should accommodate TIME HORIZONS for management action

Answer 28

494 *E (2017.Spring 22.) 0.000 pts* OSFI.STRESS EFG (Glossary): METHODS, FOCUS, SUPERVISION Qz-3 E:**Considerations in scenario selection (3)** allLOBs.non-historical.downturns 1. Scenarios should cover all important BUSINESS & PRODUCT lines 2. Create NON-HISTORICAL scenarios (events that haven't happened but COULD happen) 3. Severe & sustained DOWNTURNS (includes large losses, loss of reputation, legal problems,..)

Answer 29

498 OSFI.STRESS EFG (Glossary): METHODS, FOCUS, SUPERVISION Qz-3 F:**Focus areas in response to financial market turmoil (5)** R(Sec)RCC 1. Risk mitigation 2. S&W (Securitization & Warehousing) 3. Reputation (reputational risk) 4. Credit risk (& Counter-party Risk) 5. Concentration risk

Answer 30

500 OSFI.STRESS EFG (Glossary): METHODS, FOCUS, SUPERVISION Qz-3 G:**OSFI's considerations in assessing stress-test program (4)** 1. APPROPRIATENESS: * Are scenarios appropriate for institution's risk profile 2. VIABILITY: * Are scenarios included that compromise viability 3. FREQUENCY: * Is stress-tesing frequent enough for timely management action 4. SEVERE SHOCKS: * Do scenarios include severe shocks & sustained downturns)

Answer 31

501 *E (2016.Fall 20c.i) 0.500 pts* OSFI.STRESS EFG (Glossary): METHODS, FOCUS, SUPERVISION Qz-3 Glossary:**Describe & contrast scenario with sensitivity testing** complexity & resources * SCENARIO-TESTING: 1. Significant changes to risk factors 2. Observe future state including ripple effects & management actions over a longer time horizon 3. More complex & comprehensive * SENSITIVITY-TESTING: 1. Incremental changes to risk factors 2. Shock is more immediate & time horizon shorter 3. Simpler fewer resources required

Answer 32

502 *E (2017.Fall 1a.) 0.750 pts* McD A: Introduction Qz-1 intro:**Sect 91 (BNA Act): identify FEDERAL areas of exclusive authority (this is not specific to insurance) (6)** 1. Regulation of (trade, commerce) 2. Taxation 3. Banking 4. (bankruptcy, insolvency) 5. Aliens & naturalization 6. Criminal law

Answer 33

503 *E (2017.Fall 1b.i) 0.375 pts* McD A: Introduction Qz-1 intro:**Sect 92 (BNA Act): identify PROVINCIAL areas of exclusive authority (this is not specific to insurance) (4)** 1. Provincial taxes 2. Civil property rights 3. Hiring & supervising provincial employees 4. Operating jails & hospitals

Answer 34

504 McD A: Introduction Qz-1 intro:**Define intra vires, ultra vires** 1. INTRA VIRES: within the powers of a particular Govt 2. ULTRA VIRES: beyond the powers of a particular Govt

Answer 35

505 McD A: Introduction Qz-2 Citizens Ins v Parsons:**Facts (1881)** fire ch5 * Insurer disuptes ON's Fire Insurance Act * The Act required certain statutory conditions for fire policies in ON

Answer 36

506 *E (2012.Fall 2a.i) 1.000 pts* McD A: Introduction Qz-2 Citizens Ins v Parsons:**Issues (Recall: Citizen's - ultra)** regulation of trade, deprive status & capacity 1. ISSUE 1: * Is ON Fire Act ULTRA VIRES? (relates to regulation of trade, which is federal) 2. ISSUE 2 * Insurer claims province can't legislate to deprive federally incorporated insurer of status & capacity

Answer 37

507 *E (2012.Fall 2a.ii) 0.250 pts* McD A: Introduction Qz-2 Citizens Ins v Parsons:**Ruling-JCPC on issue #1 (Judicial Committee of the Privy Concil)** trade regulation is INTER-provincial not intra-provincial * Ruling (Issue 1): 1. ON Fire Act is INTRA VIRES * Reason: 1. Federal government can't regulate an insurer operating in a single province 2. trade means INTER-provincial (not INTRA-provincial)

Answer 38

508 *E (2012.Fall 2a.iii) 0.250 pts* McD A: Introduction Qz-2 Citizens Ins v Parsons:**Ruling-JCPC on issue #2** * Ruling (Issue 2) 1. Status & capacity UNAFFECTED 2. Insurers are all treated equally, regardless of where they were incorporated

Answer 39

509 *E (2018.Fall 2a.i) 0.100 pts* McD A: Introduction Qz-2 Insurance Reference Case:**AG(Can) v AG(AB): Facts (1916)** federal license required..except.. * (1910) The Federal Insurance Act required a Federal license of all insurers.. * ..EXCEPT IF (incorporated by Province) AND (operating solely in Province)

Answer 40

510 *E (2018.Fall 2a.ii) 0.100 pts* McD A: Introduction Qz-2 Insurance Reference Case:**AG(Can) v AG(AB) - Issues** intra-vires? * Is this version of the Federal Insurance Act 'intra vires'?

Answer 41

511 *E (2018.Fall 2a.iii) 0.100 pts* McD A: Introduction Qz-2 Insurance Reference Case:**AG(Can) v AG(AB) - Ruling - JCPC (Judicial Committee of the Privy Council)** ..licensing system.. * Licensing provisions are 'ultra vires': * Regulation of trade/commerce didn't extend to a licensing system of a particular trade * Trespasses on Provincial authority in civil rights 1. (not covered by Federal power to legislate for Peace, Order, Good Government)

Answer 42

512 *E (2018.Fall 2a.iv) 0.100 pts* McD A: Introduction Qz-2 Insurance Reference Case:**AG(Can) v AG(AB) - Implication-Canada** capacity-right 1. A provincial insurer has the capacity, but not the right to operate in another Province * (need permission from other province) 2. Federal insurer has the capacity and the right to operate in another province * These are the 2 ways an insurer can operate in more than 1 province

Answer 43

513 *E (2018.Fall 2a.v) 0.100 pts* McD A: Introduction Qz-2 Insurance Reference Case:**AG(Can) v AG(AB) - Implication-Foreign** 1. Federal government can require a federal license for a foreign insurer 2. (even if the foreign insurer is operating in only 1 province)

Answer 44

514 McD A: Introduction Qz-2 BC Public Auto:**CIC v AG(BC): Facts (3)** public auto 1. BC legislature establishes compulsory public auto insurance plan 1. Legislature refuses license renewal of private insurers 2. Insurers sue

Answer 45

515 McD A: Introduction Qz-2 BC Public Auto:**CIC v AG(BC): Arguments** * Insurers claimed BC legislation is ULTRA VIRES for 2 reasons: 1. It relates to regulation of trade, which is federal 2. Province can't legislate to deprive federally incorporated insurer of status &capacity

Answer 46

516 McD A: Introduction Qz-2 BC Public Auto:**CIC v AG(BC): Rulings (Supreme Court)** * BC legislature acted within its powers (legislation is INTRA VIRES)

Answer 47

517 *E (2014.Spring 1c.i) 0.500 pts* McD A: Introduction Qz-3 supp:**Identify of examples FEDERAL regulation/legislation regarding insurer solvency (5)** CIRC-P 1. CONDITIONS for entering business 2. INVESTMENTS 3. Regular REPORTING 4. CALCULATION of assets & reserves 5. PROTECT policy holders

Answer 48

518 *E (2018.Fall 1ab.) 1.500 pts* McD A: Introduction Qz-1 supp:**Areas & matters under PROVINCIAL insurance legislation/regulation** 1. CONTRACT MATTERS: (ppp-ird) * (policy contents), (policy terms), (premium payment), (insurable interest), (reinstatement), (designation of beneficiaries).. 2. TRANSACTION MATTERS: (AUC) * (Agent licensing), (Unfair practices), (Claims handling)

Answer 49

520 *E (2018.Fall 2b.) 1.000 pts* McD A: Introduction Qz-3 supp:**OSFI licensing requirements for domestic insurers (for Minister of Finance to approve letters patent) (6)** $(plan, record, competence, jobs) & fair treatment by foreign owners 1. Financial resources (must be sufficient) 2. Business plan (detailed & realistic) 3. Business record of applicants (check for past bankrupticies) 4. (character, competence, experience) of management 5. Positive effect on Canadian financial system (jobs, GDP growth) 6. If owned by a foreign parent, OSFI must be satisfied that subsidiary will be treated fairly

Answer 50

521 McD A: Introduction Qz-3 supp:**Identify reasons for insurance regulation in Canada (3)** (Prevent..)-(Prevent..)-(..EcoImpact..) 1. PREVENT insolvencies 2. PREVENT undesirable business practices 3. Consider ECONOMIC IMPACT on Canada

Answer 51

522 *E (2017.Spring 1b.) 0.500 pts* McD A: Introduction Qz-3 supp:**Identify of examples FEDERAL regulation/legislation regarding insurer solvency (5)** CIRC-P 1. CONDITIONS for entering business 2. INVESTMENTS 3. Regular REPORTING 4. CALCULATION of assets & reserves 5. PROTECT policy holders

Answer 52

523 ORSA (I,II,III): INTRODUCTION, SCOPE, ERM Qz-1 intro:**What is the general goal of ORSA** (risk profile)-(capital needs) * Enhance insurers' understanding of the relationship between (risk profile, capital needs)

Answer 53

524 ORSA (I,II,III): INTRODUCTION, SCOPE, ERM Qz-1 intro:**Does OSFI approve an insurer's ORSA** * NO, but OSFI will REVIEW a company's ORSA as part of its assessment of the company

Answer 54

525 ORSA (I,II,III): INTRODUCTION, SCOPE, ERM Qz-1 ERM:**What is the relationship between ERM (Enterprise Risk Management) & ORSA** * (ERM, ORSA) should be WELL-INTEGRATED so that (analysis, results) are consistent between them

Answer 55

526 *E (2015.Fall 23a.) 1.500 pts* ORSA IV: KEY ELEMENTS Qz-2 keys:**Identify ORSA's key elements (5)** RRR(M&R)(I&O) 1. RISK identification & assessment 2. RELATE risk to capital 3. RESPONSIBILITIES of Board of Directors 4. (M&R) MONITORING & REPORTING of risks 5. (I&O) INTERNAL controls & OBJECTIVE review

Answer 56

527 ORSA IV: KEY ELEMENTS Qz-2 keys:**Describe the ORSA key element 'risk identification & assessment'** id & assess materiality.. * Identify & assess the MATERIALITY of forseeable & emerging risks

Answer 57

528 *E (2018.Spring 20c.) 0.500 pts* ORSA IV: KEY ELEMENTS Qz-2 keys:**Describe the ORSA key element 'relating risk to capital'** set ICT..to withstand.. 1. Set ICT (Internal Capital Target) using stress-testing techniques 2. Must WITHSTAND a specified loss without falling below (Supervisery Capital Requirements)

Answer 58

529 ORSA IV: KEY ELEMENTS Qz-2 keys:**Describe the ORSA key element 'responsibilities of Board of Directors' (see paper p8, orange box)** reivew reasonableness & appropriateness.. * REVIEW * Reasonableness & appropriateness * OF * Risk profile & capital requirements * IN * The context of board-approved risk appetite & risk tolerance

Answer 59

530 ORSA IV: KEY ELEMENTS Qz-2 keys:**Describe the ORSA key element 'Monitoring & Reporting'** annual reports to.. * ANNUAL REPORTS to (Board of Directors, Senior Managment) on risk profile & capital management

Answer 60

531 ORSA IV: KEY ELEMENTS Qz-2 keys:**Describe the ORSA key element 'Internal control & Objective review'** review for accuracy..objective reviewer is.. 1. REVIEW for (accuracy, integrity, reasonableness) 2. OBJECTIVE REVIEWER: internal or external auditor OR skilled professional not involved in the ORSA process

Answer 61

532 *E (2015.Fall 23b.) 0.500 pts* ORSA IV: KEY ELEMENTS Qz-2 keys:**Is ORSA process the same for all federal insurers** 1. YES and NO: * Key elements are the same (list them) 2. BUT * Specifics differ by company DEPENDING on risk profile & NSC (Nature/Scale/Complexity) of operations

Answer 62

533 *E (2016.Fall 24e.) 0.500 pts* ORSA IV: KEY ELEMENTS Qz-2 keys:**Should ORSA be used to set ICT (Internal Capital Target)** * YES: * An important part of ORSA is to set ICT (Internal Capital Target) since ICT considers insurer-specific risks

Answer 63

534 ORSA V: INTERACTION OF ORSA with SUPERVISORY REVIEW Qz-3 SupRev:**What is the relative importance of (quantitative, qualitative) aspects of ORSA** * Quantitative & qualitative aspects are equally important

Answer 64

535 ORSA V: INTERACTION OF ORSA with SUPERVISORY REVIEW Qz-3 APPENDIX:**Regarding ORSA key element #2, 'relating risk to capital' , identify possible approaches to calculating ICT (Internal Capital Target) (3)** int.simp.qual 1. COMPLEX INTERNAL MODEL: for complex risks 2. SIMPLE MODEL: with conservative assumptions 3. QUALITATIVE: includes expert judgment for difficut-to-quantify risks

Answer 65

536 *E (2018.Spring 20a.i) 0.250 pts* ORSA V: INTERACTION OF ORSA with SUPERVISORY REVIEW Qz-3 supp:**Describe similarities between DCAT & ORSA (3)** if in doubt, start by listing key principles for both DCAT & ORSA 1. Both are concerned with risk identification & control 2. Both are concerned with capital requirements 3. Both are submitted to BoD (Board of Directors) & regulators

Answer 66

537 *E (2017.Fall 21b.) 1.500 pts* ORSA V: INTERACTION OF ORSA with SUPERVISORY REVIEW supp: **Describe differences between DCAT & ORSA (3)** guidelines. methods.report 1. GUIDELINES: * DCAT: uses CIA SOPs (Statement of Principles) * ORSA: uses OSFI guidelines 2. METHODS: * DCAT: quantitative only * ORSA: qualitative & quantitative 3. REPORT: * DCAT: by AA (Appointed Actuary) * ORSA: management responsibility 4. FORECAST PERIOD * DCAT: 3 years * ORSA: long enough to capture relevant material risks (Ex: 3-5 years)

Answer 67

538 *E (2018.Fall 25c.) 2.000 pts* ORSA V: INTERACTION OF ORSA with SUPERVISORY REVIEW Qz-3 supp:**Identify advantages of ORSA over MCT** ORSA does a lot more than MCT * ORSA: 1. |1] includes ALL material rsks 2. |2] uses stress-testing to set ICT(Internal Capital Target) 3. |3] qualitative (as well as quantitative) 4. |4] admits assessment of internal controls * MCT: doesn't do these things

C4 Flashcards

(91 cards)