Lists Flashcards

Question

Key factors in setting assumptions

Answer 1

Use of model Financial significance of assumption Consistency between assumptions Legistaion and regulation Needs of client | UFC was Last Night

Answer 2

Complexity of product Guarantees Options Untested market Overhead costs Lack of historical data | Cool Guys Only watch UCL

Answer 3

React quickly to emerging risks Improve stability and quality of business Avoid surprises Improve growth and returns by exploiting risk opportunities Improve growth and returns through better management and allocation of capital Aggregate risk exposure and interdependencies Integrate risk into business process and strategic decision making Sake holder confidence | RISE MAPS

Answer 4

Spurious Time Adverse Temporary initial Class | STATiC

Answer 5

Accounting practices Marketability Profitability Level and form of benefits Early leavers benefits Discretionary benefits Interest and needs of customers Risk appetite Expenses vs costs Competition Terms and conditions Financiing - capital requirements Admin systems Consistency with other products Timing of premiums Options and guarantees Regulation Susidies | AMPLE DIRECT FACTORS

Answer 6

Taxes Reinsurance Options and guarantees Provisioning base Investment income Contingency margins Cost of capital Experience rating Commision | TROPICa Charges Everyone Commision

Answer 7

Identification Classification Measurement Controls Financing Monitoring

Answer 8

Market Credit Operational Liquidity Business External

Answer 9

Limited range of assets Uncertainty in amount and timing of liabilities Cashlows after options not known Benefits - may include discretionary benefits Cost of strategy | LUCky Brown Cat

Answer 10

Failure of spnsor to pay on time Inaduequate communication General economic mismanagement Takeover of sponsor Decision by sponsor Default by sponsor | FIG Trees Dont Die

Answer 11

Loss of funds due to fraud Incorrect benefit payements Admin costs Decision by parties to whom power has been delegated Inapropriate advice Changes in tax status Fines from regulator | Lazy Idiots Always Die In Cold Forests

Answer 12

Complex products Lack of integrity Use of unsuitable model Errors in data State encouraged bad practices Incompetence | CLUES for Incompetence

Answer 13

Use of reinsurance Withdrawals and lapses Expenses Claims New business volume and mix Options and guarantees | unusally well dressed elephants calmly negotiate guarantees

Answer 14

Independence Moral hazard eliminated as far as possible Sufficient data Max amount of liability insurer can accept Homogeniety of risks Low prob of occuring

Answer 15

Determine approriate control systems for risks Provide better undertsanding of risks Monitor existing control systems Assess interactions between risks Identify new risks Assist with pricing, reserving and determing capital requirements Assess changes to risks | CUM IN PC

Answer 16

Transfer Retain Avoid Mitigate Share | TRAMS

Answer 17

Avoid large loses Access to reinsureres data and expertise Reduces volatility of claims

Answer 18

Intergated risk cover Post loss funding Derivatives Swaps Securitisation | Interesting people dont study science

Answer 19

Unable to obtain other cover Stabilisation of results Greater security of payment Tax advantages More effiecient risk managment source of capital Cheaper cover Management of solvency margins | Unusally selfish people take risks creating costly statues

Answer 20

Claims controls Underwriting Management controls Diversification | CUMD

Answer 21

Business lines Location Target market Reinsurance Investments - class of asset and types within class | BLT requires investment

Answer 22

Protects risk pool Identify unacceptable risks Loadings for extra risks Special terms Claims in line with pricing assumtpions Prevents over insurance Classify risks to reduce heterogeneity Charge appropriately for risk taken | PULS COCC

Answer 23

* Base or socio economic * Medical * Lifestyle * Financial

Answer 24

Published accounts Solvency demonstration Internal accounts Valuing liabilities for transfers Determing discretionary benefits Determining contributions Calculating disconinuance benefits Setting investment strategy Providing info to beneficiaries | Please stay informed lets discuss contributions discontinuance, inv&info

Answer 25

* Data governance * Auditing and accounting * Monitoring liabilties taken on * Management of options and guarantees - liability hedging, asset matching and option elegibiity conditions

Answer 26

Performance vs key objectives Investment strategy and perfomance Progress vs short and long term goals RIsk report Governance arrangements | PIGs Rarely govern

Answer 27

Consistency in accounting treament Avoiding distortions in flow of contributions from sponsor to fund Realistic cost of accruing benefits Disclosure of appropriate info | CARD

Answer 28

Benefits Contribution obligations Expense charges Invetsment strategy and performance Risks involved Treatment of entitilements in event of insolvency | Be careful expensive investments result in insolvency

Answer 29

Assumptions made Actuarial method used Value of liabilities Increase in past due liabilities Investment performance Salary - benefit cost of the directors Changes in surplus or defecit Changes in membership Surplus or defecit | Assuming actuaries value increase in salary changes member defecit

Answer 30

Cushions against adverse experience Hold/meet solvency requirements Meet development expenses Sell products with guaratees Business strategic objectives Meet benefits before sufficient premiums are recieved Invest more freely - mismatches Demonstrate financial strength of business Smooth reported profits | CHESS MIDaS

Answer 31

* Continuation of scheme without further accrual of benefits * Transfer of liabilities to another scheme with same sponsor * Transfer of funds directly to beneficiaries * Transfer of funds to a DC personal pension or new employer’s scheme * Transfer of liabilities to an insurance company to guarantee benefits through purchase of annuities and deferred annuities * Transfer to a central discontinuance fund

Answer 32

Reinsurance Secutisation Equity Bank products Derivatives Internal restructuring Financial reinsurance Subordinate debt

Answer 33

Provide board and senior management of a company with: * aduequecy of its RMP * its current and likely future solvency position

Answer 34

* Identify risks * Identify RMP and controls of risks * Quantify ongoing ability to meet solvency requirements - SCR/MCR and longer term * Analyse quantitative and qualitative elements of its business strategy * Relationship between risk management and financial resources | I Cant Say Bad about Russia

Answer 35

Enable banks to to identify, measure and aggregate all material risk types and calculate capital required to cover these risk

Answer 36

1. Quanitfication of risk exposures and capital requirements 2. Supervisory regime 3. Disclosures to public and regulator

Answer 37

1.Quantitative minimum capital requirement 2.Risk management and supervision 3.Market discipline and disclosure

Answer 38

* Valuation – valuate performance assumptions * Assumptions * Reconcile – when reserving and AoS done separately * Info for management * New business effects * Expenses * Model check * Deviation from expected * Surplus distribution – who gets, how to distribute and how much | VARIaNcE MaDe Surplus

Answer 39

Appropriate identification and measurement of all balance sheet risks Appropriate level of internal capital in relation to banks risk profile Application and further development of suitable risk managment systems | think RMP steps 1/2 combined, 5 then 6

Answer 40

Reduce severity of claims Reduce withdrawals/lapses Change investment strategy Reduce frequency of claims Tax effieciency Control expenses | SWIFTE

Answer 41

Capital needs Business strategic goals Stakeholder, policyholder and shareholder expectations Margins for future adverse experience | CBSM

Answer 42

Expense loading * % of premium or sum assured * % of funds under management * Fixed amount per contract * Fixed amount per claim or percentage of claim * Explicit loading Adjustements * Cross subsidies * Inflation * Competition

Answer 43

* Expectations theory * Liquidity preference theory * Inflation risk premium theory * Market segmentation / prefered habitat theory

Answer 44

Proportional * Quoata share * Surplus Non Proportional * Risk excess of loss * Aggregate excess of loss * Catasrophe excess of loss

Answer 45

* Distribution channel used * Level of competition in market * Approch taken to expense and profit loading * Provider may have a captive market that is not price sensitive

Answer 46

Goal is to allocate all expenses 1. Define the period 2. Check the data 3. Pick an allocation method and be consistent with it

Answer 47

1. Vested interest 2. Financial nature and quantifiable 3. Amount paid must be similar to loss

Answer 48

1. Vested interest in event not occuring 2. Pre funding 3. Pooling of risk

Answer 49

Actual vs expected i.t.o * Claims - Frequency and amount * Volume - New business and lapses * Other cashflows - Investments, Expenses, Commision and Premiums paid * Other factors - tax, inflation and salary growth

Answer 50

Tax Education Regulation Marketing Fashion Political climate Liabilities | TERM FPL

Answer 51

Liabilities Assets External Institutional factors

Answer 52

Active - risk taken by individual managers relative to their benchmarks Sructural - aggregate of all managers benchmarks does not equal benchmark for the fund Strategic - risk that strategic benchmark does not meet liabilities

Answer 53

* Investment style where asset allocations are based on risk contribution to portfolio and expected returns * Split between strategic and active risk

Answer 54

Amount of capital a provider determines is appropriate to hold above its liabilities to cover its risks under adverse outcomes, generally with a certain confidence level over a given time horizon

Lists Flashcards

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