Summary: Chapter headings Flashcards
(30 cards)
1
Q
Chapter 1
A
- Personal financial cycle
- The actuarial product cycle
- Group products
- Endowment assurance
- Features of the product
** Savings or protection( think surrender values as well)- also helps you to know whether longevity or mortality risk is important
** Needs of the consumer
** Capital requirements – Five Issues Surrounding Capital Requirements
** Risks for the insurer-( With mortality risk, sum at risk is NB)
** Variation of products and the needs of customers it meets
** Group version?
2
Q
Chapter 2
A
- Whole life
** Savings or protection( think surrender values as well)- also helps you to know whether longevity or mortality risk is important
** Needs of the consumer
** Capital requirements – Five Issues Surrounding Capital Requirements
** Risks for the insurer-( With mortality risk, sum at risk is NB)
** Variation of products and the needs of customers it meets
** Group version? - Term assurance
** Savings or protection( think surrender values as well)- also helps you to know whether longevity or mortality risk is important
** Needs of the consumer
** Capital requirements – Five Issues Surrounding Capital Requirements
** Risks for the insurer-( With mortality risk, sum at risk is NB)
** Variation of products and the needs of customers it meets
** Group version? - Renewable and convertible term assurance
** Savings or protection( think surrender values as well)- also helps you to know whether longevity or mortality risk is important
** Needs of the consumer
** Capital requirements – Five Issues Surrounding Capital Requirements
** Risks for the insurer-( With mortality risk, sum at risk is NB)
** Variation of products and the needs of customers it meets
** Group version?
3
Q
Chapter 3
A
- Immediate annuity
** Savings or protection( think surrender values as well)- also helps you to know whether longevity or mortality risk is important
** Needs of the consumer
** Capital requirements – Five Issues Surrounding Capital Requirements
** Risks for the insurer-( With mortality risk, sum at risk is NB)
** Variation of products and the needs of customers it meets
** Group version? - Deferred annuity
** Savings or protection( think surrender values as well)- also helps you to know whether longevity or mortality risk is important
** Needs of the consumer
** Capital requirements – Five Issues Surrounding Capital Requirements
** Risks for the insurer-( With mortality risk, sum at risk is NB)
** Variation of products and the needs of customers it meets
** Group version?
4
Q
Chapter 4
A
For without profits, unit linked, index linked, without profits state:
* Features
* Needs of the consumer
* Capital Requirements
* Micro Risks for the insurer
* Risks of the product to the insured
5
Q
Chapter 5
A
- Overview of the income protection product
- Meeting the needs of the policyholder (5)
○ Simplicity(1) vs complexity(3) of the product
t - Product features of the individual IP business
○ General policy conditions
○ Benefit definitions (amounts)
○ Benefit definitions (timing)
○ Claims definitions
○ Other Policy conditions
○ Product variation - With profits and unit-linked designs
- Group IP
- Risks to the insurer
- Capital requirements
6
Q
Chapter 6
A
- Overview of CI
○ Definition and when CI is paid
○ CI vs IP as well as the case on indemnity
○ Standalone, rider or accelerated - Meeting customer needs (6)
○Simplicity(2) vs complexity in the product(4) - Conditions covered
○ Characteristics of insurable conditions (4)
○ Core and Additional conditions
○ Terminal illness
○ Children’s benefit
○ Total and permanent disability - Product variations
○ Tiered benefits
○ Guarantees, reviewability of premiums and benefits
○ New diseases and guaranteed insurability - Product structure
- Group CI
- Risks to the insurer
- Capital requirements
7
Q
Chapter 7
A
- Overview of of the long term care
- Meeting the needs of the customer
- Product features of LTCI
○ Prefunded plans
○ Immediate needs plans - Pre-funded products
○ Product structures
○ Benefits
○ Method of funding
○ Claims definition - Product variations
○ Guaranteed terms
○ Indemnity vs cash benefits
○ Unit linked version - Immediate need solutions
- Risks to the insurer
- Capital requirements
8
Q
Chapter 8
A
- Determining asset shares
○ Components of the asset share
○ Calculating the asset share
○ Asset share developments - Asset shares and surrender values
- Asset shares and bonus distribution
9
Q
Chapter 9 and 10
A
- Possible ways of distributing profits to policyholders
○ Deferring bonus distribution
○Meeting policyholder needs - Distribution of the profits - What constitutes profit to be distributed
- Additions to benefits approach
○Conventional with profits
○Accumulating with profits
Overview
Differences between this and the conventional with profits
Differences between a unit linked and unitised with profits
Charges - Bonus distribution considerations
- Asset share and bonus distributions
- Revalorization method
○Definition
○Profits distributed
○Advantages and disadvantages - Contributions method
○Definition - Choice of the bonus distribution method
- Key principles for profit distribution - ECSEDED
10
Q
Chapter 11 and 12
A
- Propensity of consumers to purchase insurance
- The distribution channels and their effect
- The economic environment
- The legal environment
- The regulatory environment
- The professional guidance
11
Q
Chapter 13 - 15
A
- Reinsurance and other counter parties
- Investment performance
- Shortemism of management
- Kompetion (Marketing risk)
- Actions of board of directors and distributors
- Legal, fiscal and regulatory environment
- Inflation
- Fraud
- Expenses
- Data(policy data)
- Rates of mortality and morbidity
- Options and guarantees
- Withdrawal (Selective withdrawals)
- New business mix and volumes
- Controls of systems failures of administrations
- Aggregations and concentration risk
- Tax
- Selection(ant-selection and moral hazard)
12
Q
Chapter 16
A
- Internal unit linked fund and management box
- Basic equity principle of unit pricing
- Appropriation and expropriation prices
- “Offer basis” and “Bid basis”
- Offer and bid prices
13
Q
Chapter 17
A
- Initial charges and new business strain for unit linked contracts
- Description of the technique of actuarial funding
○Aim of actuarial funding
○Conditions of actuarial funding
14
Q
Chapter 18 - 19
A
- Objectives and requirements of a general model – SCACIER FILES
- Basic features of a life insurance model
- Types of life insurance models
- A life insurance model needs to allow for cashflow and profit projection
- Needs to allow for the cost of setting up the supervisory reserves and required solvency margins
- Needs to allow for options and guarantees -it is likely that a stochastic model will be more appropriate for this
- Needs to allow for the interaction of variables - there needs to be dynamic links
- The internal period( frequency) of cashflow projection should be short enough to give reliable results
- Needs to allow for the interaction of variables - there needs to be dynamic links
- Choosing between a stochastic and a deterministic model
○ Advantages of using a deterministic model
○ Advantages of using a stochastic model
○ Disadvantages of stochastic approach
○ Situations where a deterministic model may be more appropriate
○ Calibrating a stochastic model
- Financial economic or market consistent approach
- Models for pricing
○ Determining the premiums or charging structure
○Profit Criterion
○Marketability
○Capital requirements
○Assessing return on capital - Models for existing business
○ Profitability of existing business - Models for assessing solvency
○Assessing solvency
○ Measuring solvency
○Static vs dynamic solvency
○The need for capital and the role of the estate - Sensitivities in models
○ Sensitivity of model points
○ Sensitivity of parameters
○ Sensitivity when pricing
○ Sensitivity of business in-force
○ Alternative way of allowing for risk
15
Q
Chapter 20
A
- Financial requirements
- Onerousness of guarantees
- Regulation (RESTRICT) and reinsurance
- Consistency with other products
- Extent of cross subsides
- Distribution channel
- Competition
- Risk characteristics
- Admin systems and other expertise
- Marketing
- Profitability
- Sensitivity to profitability
16
Q
Chapter 21
A
- Introduction
- Parameters that needs to be estimated (RIM PINT CREW)
- Assumptions as source of risk
- Basic methodology of setting assumptions
- Pricing life and health and care insurance contracts
- Mortality
- Morbidity
○ Disability incidences and duration for Income protection
○ Claim incidence for critical illness products
○ Claim incidences and amounts for long term care - Investment return
- Expenses and commission
- Dealing with the per policy expenses
- Inflation of expenses
- Persistency -withdrawal
*Margins - Profit requirements
○ Risk discount rate
- Consistency
17
Q
Chapter 22
A
- Valuing Life Insurance Contracts - Liabilities
- Overview
- Reserving basis compared to pricing basis
- Best estimate reserves
- Market-consistent valuations
- Valuing Life Insurance Contracts - Embedded value
- Calculation of the embedded value
- Appraisal Value
- Assumptions
- Allowing for risk
- What is the difference between a best estimate valuation and an embedded value?
- Consistency
- Consistency in setting a valuation basis
- Consistency in setting the embedded value basis
18
Q
Chapter 23
A
- Background
- Gross Premium valuation method
○ Definition
○ Non-unit reserves
○ Negative non-unit reserves
○ Best estimate approach - holding negative reserves
○ Prudent approach while allowing for negative non-unit reserves
○ Features of the gross premium method - Net Premium valuation method
○ Definition
○ Features of the gross premium method - Principles of calculating reserves – DOG RID PRINCIPLES
19
Q
Chapter 24
A
- Market consistent approach
○ Market-consistent methodology
○ Illiquidity premium
○ Risk margin - Solvency Capital requirements
○ Purpose
○ Interplay between reserves and solvency capital requirements
○ Value at Risk approach - Active and passive valuation approaches
○Passive valuation approach
○Active valuation approach
○Combinations
20
Q
Chapter 25
A
- Introduction
- Surrender values for conventional without profits contracts
- Principles for surrender values - PALACE DICE
- Methods of calculation
- Analysis of methods
- Calculation of values
o Choice of method
o Retention of profit
o Determining a basis for the retrospective value
o Determining a basis for the prospective value - Unit linked contracts
21
Q
Chapter 26
A
- Introduction
- Alterations of conventional without profit contracts
- Principles for without profit business – A B SAFE
- Methods for calculation – See how these meet the principles
- Determining a basis for the equating policy values method
o Expected profit from altered without-profits and contracts
o Assumptions
o Selection - Unit linked contracts
22
Q
Chapter 27
A
- Investment guarantees and how to price them
* Examples
* Implications of having guarantees on the insurance company
* Valuing the investment guarantees - Mortality guarantees and how to price them
* Examples
* Implications of placing the guarantees on the insurance company
Don’t forget- There is a difference between the factors affecting mortality options and the assumptions in costing options
- Learn the general workings of the two methods, you seem to mix them up
23
Q
Chapter 28
A
- IP
o Multi-state
o Inception/disabled annuity - CI
o Accelarated
o Standalone
o How to deal with overlaps - LTCI
24
Q
Chapter 29 - 30
A
- Main types of reinsurance contracts
- Reasons for reinsuring FAIL SAFE
- Considerations before reinsuring
25
Chapter 31
* Reasons for underwriting - SAFER
* Managing risks
* The process of underwriting
* Introduction
* Medical evidence
* Other evidence
* Financial underwriting
* Interpretation of the evidence
* Specification of the terms
* Claims underwriting
* Determining the level of underwriting to use
* Factors to be considered in an analysis of appropriate underwriting to use
* Marketing
* Reinsurance terms
* Underwriting group cover
26
Chapter 32
- Data reconciliation checks
- Consistency checks
- Unusual values and spot checks
- Analysis of surplus and embedded value profit
27
Chapter 33
* Asset characteristics
* The principles of investment
* Asset – liability matching requirements
* Developing an appropriate strategy
28
Chapter 34
* Expense control
* Policy retention
* Management of new business mix and volumes
* Management of options
* Systematic risk assessment and management strategies
29
30
Chapter 35
* Reasons for monitoring experience – DIVERGENCE
* Data required
* Analysis of experience
* The analysis of surplus and profit
* Analysis on the embedded value
* Using the results
