CH:0 Actuarial control cycle

Question 1

List 7 steps of the ACC

Answer 1

• Analyse the problem to identify the risk surrounding the problem
• Quantify the financial consequence should the risks identified occur
• Consider and quantify appropriate methods to manage, mitigate and transfer these identified risks.
• Monitor the situation and the risk management procedures implemented in the development
• If the experience is different than expected, modify or change to be a closer fit to the actual experience
• Consider the appropriate economic and commercial environment
• Apply professionalism at all stages.

Question 2

List the 3 stages and 2 inputs to the ACC

Answer 2

Stages:
* Specify the problem
* Develope the solution
* Monitor the experience

Input:
* Professionalism
* General and commercial economic environment

Question 3

List what to consider under specify the problem

(4)

Answer 3

• Set the objectives
• Identify and analyse risks
• Consider how to manage, mitigate and transfer these risks
• Consider stakeholders

Question 4

List what to consider under develop the solution

(9)

Answer 4

• Consider existing models for the problem
• Select the appropriate model or build a new one
• Consider and select assumptions
• Interpret the results of the model
• Consider implications of model results on problem
• Consider implications of model results for all stakeholders
• Determine the solution to the problem
• Consider alternative solutions
• Formalise the solution

Question 5

List what to consider under monitor the experience

(4)

Answer 5

• Monitor regularly to reflect on current experience
• Identify variance and reasons for it
• Identify trends
• Feedback into other stages of the control cycle

Question 6

List what to consider under general and commercial economic environment

(7)

Answer 6

• Understand the environment in which the product is being sold
• Consider the impact decisions will have on the environment
• Include:
• Economic outlook
• Customer needs and trends
• Marketing and competition
• Regulation
• Taxation

Question 7

List what to consider under professionalism

(8)

Answer 7

• Professional conduct standards
• Technical and ethical standards
• Views of all stakeholders
• Act with integrity and detachment from the problem
• Personal situation
• Build a relationship with the client
• Avoid conflicts of interest
• Communicaiton