1. Actuarial advice Flashcards
Stakeholders in the public sector
- Central and local government departments
- Central banks
- Regulatory bodies
P3RP
What is the actuarial advice given to (Prospective) Policyholders/members?
- Protection of property
- Personal protection against illness, death
- Investment
- Protection against requiring long-term care
- Retirement planning
- Provision of benefits on future events such as death, retirement, withdrawal from scheme, etc.
P3RP
What is the actuarial advice given to Policyholder/member’s dependents?
- Protection of property
- Personal protection against illness, death
- Investment
- Protection against requiring long-term care
- Retirement planning
- Provision of benefits on future events such as death, retirement, withdrawal from scheme, etc.
What is the actuarial advice given to Employers?
- Protection of assets
- Protection against financial loss arising from death or ill health of employees
- Meeting legislative requirements
- Managing the costs of running the business
- Investment of surplus capital
What is the actuarial advice given to Insurance company board of directors?
- Meeting legislative requirements for the management of business
- Investing and managing the assets of the company
- Managing the liabilities of the company
- Determining levels of provisions to hold to meet future liabilities
- Setting premium rates
- Meeting policyholders’ reasonable expectations
- Good corporate governance
- Obtaining appropriate returns
What is the actuarial advice given to Insurance company shareholders?
Appropriate investment return for the risk taken
What is the actuarial advice given to Insurance company creditors?
Certainty that the money owed to them will be paid in full and on time
What is the actuarial advice given to Trustees of benefit schemes?
- Managing the assets of the scheme
- Paying financial benefits when they are due
- Maintaining solvency
What is the actuarial advice given to Sponsors of benefit schemes?
- Providing protection benefits that meet the needs of the members and their dependents
- Providing retirement benefits that meet the needs of the members
- Managing the cost of providing the benefits
- Meeting legislative requirements
What is the actuarial advice given to Employees?
- Provision of protection benefits on death or sickness
- Provision of pension benefits on retirement
- Investment of surplus personal funds
- Provision of work-related benefits (attract/retain staff)
What is the actuarial advice given to Auditors of insurance companies?
- Assessment of provisions
- Ensure that the accounts are true and fair
What is the actuarial advice given to Auditors of the sponsors of benefit schemes?
- Assessment of future liability to pay benefits
What is the actuarial advice given to Investment fund managers?
- Investment strategy (the need to meet liability)
What is the actuarial advice given to Members of investment schemes?
- How to invest in order to meet specific liabilities e.g. savings for retirement
What is the actuarial advice given to Sponsors of capital projects?
- Assessment of the risks underlying the project
- Consideration of potential mitigation techniques
- Evaluation of future cashflows
What is the actuarial advice given to Banks?
- Account holders – disclosure on products
What is the actuarial advice given to Government?
- Setting legislation that impacts the provision of financial products, schemes
- Monitoring the adherence to this legislation
- Funding benefit provision by the state
- Monitoring the funding of benefit provision by the state
What is the actuarial advice given to Regulators?
Ensuring that regulatory requirements are met
How can acturay gather required information
- Company accounts
- Other published information
- Company’s website
- Meeting and less formal discussion with clients
Kind of advice required from actuary
- Factual - Reseach and facts e.g. legislation
- Indicative - opinion without full research
- Recommendations - researched, model forecasts, peer review, recommendations consistent with requirements
What factors should be considered when an actuary is giving advice to a client who makes a decision on the adivice?
- Setting out alternative soliutions - implications for the client and other stakeholders
- Set out and explain implications of each alternative solutions to each stakeholder. Recommend or not
- Set out assumptions made and reasons for making the assumption
- Be aware of who the client is
- Avoid conflicts of interest
- Consider whether other professionals should be involved in giving advice
What should an actuary do if they both give advice and make decision
- Peer review
- Seek opinions from other professionals
- Rationale behind any decision - well documented
- including documentations of alternative solutions
What are the Technical Actuarial Standards (TAS) p-ipf
- TAS 100: Principles for Technical Actuarial Work
- TAS 200: Insurance
- TAS 300: Pensions
- TAS 400: Funeral plan trusts
What is the purpose of Actuarial Quality Framework and whom is it designed for?
- Support effective communication between actuaries and other stakeholders
- Stakeholders include:
1. Clients and employers of actuaries
2. Senior management and members of governing bodies
3. Policy makers and regulators
4. End users - It aims to promote the following drivers of actuarial quality (MACE)
1. Methods - reliability and usefulness of actuarial methods
2. Actuaries - technical skills of actuaries and ethics and professionalism of actuaries
3. Communication - of actuarial information and advice
4. Environment - working environment for actuaries and other factors outside the control of actuaries.
