CH 0 - 1 Subject CP1 – the big picture

Question 1

The framework of actuarial control Cycle

Answer 1

The General Commercial and Economic Environment – > (Specifying the problem < – > Developing the solution < – > Monitoring the Experience – > Specifying the problem) – > Professionalism

When actuarial task fails it is often due to breakdown in ACC process means not performing well even one task could lead to failure

For example:
Model using assumption is outdated (monitoring has broken down).
Actuaries failed to provide enough documentation (professionalism fails).

Question 2

How does the ACC relate to Subject CP1?

Answer 2

The General Commercial and Economic Environment
- Providers of benefits
- Regulation
- The external environment
- Insurance products
- Asset classes
- Economic influences

Specifying the Problem
- Risk and risk management
- Contract design
- Capital requirements

Developing the Solution
- Modelling
- Data
- Setting assumptions
- Pricing and financing
- Provisioning
- Asset management
- Capital management
- Surplus management
- Accounting and reporting

Monitoring the Experience
- Monitoring
- Analysis of surplus

Professionalism
- Actuarial advice