Acronyms Flashcards
1
Q
Contract design stakeholders
116
A
ALPACAS
Actuaries
Lawyers
Providers of benefits
Accountants
Customers
Administrator
Shareholders
2
Q
Reasons for calculating provisions
A
BAD MEDICS
- Benefit improvements for a benefit scheme
- Accounts and reports (published and internal)
- Discontinuance/surrender benefits
- Mergers and acquisitions
- Excess of assets over liabilities and so whether discretionary benefits can be awarded
- Disclosure of information for beneficiaries
- Investment strategy
- Contribution/premium setting
- Supervisory solvency reports
3
Q
Contract design factors
A
AMPLE DIRECT FACTORS
- Administration systems
- Marketability
-Profitability - Level and form of benefits
- Early leaver benefits
- Discretionary benefits
- Interest and needs of customers
- Risk appetite of the parties involved
- Expenses vs charges
- Competition
- Terms and conditions of contract
- Financing (capital requirements)
- Accounting implications
- Consistency with other products
- Timing and contributions of premiums
- Options and guarantees
- Regulatory requirements
- Subsidies (cross)
4
Q
Considerations when using past data to set assumptions
A
BEST ARCHER
- Balance of homogenous groups underlying the data may have changed
- Economic situation may have changed
- Social conditions may have changed
- Trends over time, e.g., medical, demographic
- Abnormal fluctuations
- Random fluctuations
- Changes in regulation
- Heterogeneity within the group to which the assumptions will apply
- Errors in the data
- Recording differences (e.g. in categorization of smoker)
5
Q
Characteristics of a prime property
A
CALL ST
- Comparable properties for rent review
- Age, condition and flexibility of use
- Location
- Lease structure
- Size
- Tenant quality
6
Q
Common aims of accounting standards (for benefit scheme disclosures)
A
CARD
- Consistency in accounting treatment from year to year
- Avoiding distortions resulting from contribution fluctuations
- Recognising the realistic costs of accruing benefits
- Disclosure of appropriate information
7
Q
Practical problems with overseas investment
A
CATERPILLAR
- Custodian needed
- Additional admin required
- Time delays
- Expenses incurred/expertise needed
- Different/poor regulation
- Political instability
- Information harder to obtain (and less of it)
- Language difficulties
- Liquidity problems
- Accounting differences
- Restrictions on foreign ownership/repatriation problems
8
Q
Main difficulties of overseas investment
A
MTV
- Matching domestic liabilities
- Taxation (may not be able to recover withholding taxes paid)
- Volatility of currency
9
Q
Additional reports accompanying accounts
A
CIRCUS
- Chairperson’s/CEO’s statements
- Investment report
- Remuneration report
- Corporate governance report
- Uncertainty (risk) report
- Strategic report
10
Q
Expenses incurred by product provider
A
COST RAID
- Commission
- Overheads
- Sales/advertising
- Terminal, e.g., paying benefits
- Renewal administration, e.g., collecting premiums/contributions
- Asset management
- Initial administration, e.g., setting-up costs
- Design of the contract
11
Q
External environment factors
A
CREATE GRAND LISTS
- Corporate structure
- Regulation and legislation
- Environmental issues and climate change
- Accounting standards
- Tax
- Economic outlook (e.g. interest rates, inflation, growth)
- Governance
- Risk management requirements
- Adequacy of capital and solvency
- New business environment
- Demographic trends
- Lifestyle considerations
- International practice
- State benefits
- Technology
- Social and cultural trends
12
Q
Inappropriate advice
A
CRIMES
- Complicated products
- Rubbish (Incompetent) advisor
- Integrity of advisor lacking, e.g., due to sales-related payments
- Model or parameter errors
- Errors in data relating to beneficiaries
- State-encouraged but inappropriate actions
13
Q
Benefit scheme info to disclose in accounts
A
DIM CLAIMS
- Directors benefit costs
- Investment return over year
- Membership improvements
- Change in surplus/deficit over year
- Liabilities accruing over year
- Assumptions
- Increase in past service liabilities
- Method
- Surplus/deficit
14
Q
Reasons for analysing surplus
A
DIVERGENCE
- Divergence of actual vs expected
- Information to management and for accounts
- Variance calculations
- Experience monitoring to feedback into ACC
- Reconcile values for successive years
- Group into one-off or recurring sources of surplus
- Executive remuneration schemes (data for)
- New business strain (shows effect of)
- Check on valuation assumptions and calculations
- Extra check on valuation data
15
Q
Considerations in assessing different models
A
FENCED
- Fit for purpose
- Expertise available in house
- Need for flexibility
- Cost of each option
- Expected number of times used
- Desired accuracy
16
Q
Types of actuarial advice
A
FIR
- Factual
- Indicative
- Recommendation
17
Q
Evaluation of risk mitigation options
A
FIRM
- Feasibility and cost
- Impact on frequency/severity/expected value
- Resulting secondary risks
- Mitigation required in response to secondary risk
