CH 1: Actuarial Advice Flashcards
Clients (consumers/beneficiaries) (6)
- Policyholders
- Prospective policyholders
- Members of benefit schemes and their dependants
- Employers
- Members of investment schemes
Clients (providers) (2)
- Employers
- Insurance companies
- Trustees of benefit schemes
Clients (owners/managers of providers) (3)
- Board of directors
- Shareholders
- Investment fund managers
Clients (providers of capital) (4)
- Creditors
- Sponsors of capital projects
- Sponsors of benefit schemes
- Banks
Clients (Regulatory position) (2)
- Auditors
- Government
Important things to consider when giving advice (4)
- Identify all stakeholders involved
- Retain a sense of proportion of the interests of certain stakeholders
- Omitting certain stakeholders may distort the context of the advice
- Not all stakeholders directly involved in remunerating the actuary for advice
Interest of current/prospective policyholders (3)
- Personal protection against death and illness
- Protection of property
- Investment
Interests of current/prospective policyholders (3)
- Personal protection against death or illness
- Protection of property
- Investment
Interests of members of benefit schemes and their dependants (1)
- Provision of benefits on future events such as death, retirement, illness and withdrawal
Interests of employers (7)
- Protection against financial loss arising from the death or ill health of employees
- Protection of assets
- Provision of work related benefits that will attract and retain good quality employees
- Meeting legislative requirements
- Managing the costs of running the business
- Quantification of the amount of surplus capital in the business
- Investment of surplus capital
Interests of insurance company board of directors (8)
- Meeting legislative requirements for the management of the business
- Investing and managing the assets of the company
- Managing the liabilities of the company
- Determining the level of provisions to hold to meet future liabilities
- Setting premium rates
- Meeting policyholders’ reasonable expectations
- Good corporate governance
- Obtaining appropriate and adequate reinsurance to protect the business
Interests of insurance company shareholders (1)
- Obtaining a good return on their investment and the return reflects the risk taken
Interests of creditors (1)
- Certainty that monies owed to them will be paid
Interests of trustees of benefit schemes (3)
- Managing the assets of the scheme
- Paying benefits promised under the scheme as they fall due
- Maintaining solvency
Interest of sponsors of benefit schemes (4)
- Providing protection benefits that meet the needs of their members and their dependants
- Providing retirement benefits that meet the needs of their members
- Managing the cost of providing the benefits
- Meeting legislative requirements
Interests of employees (3)
- Provision of protection benefits on death or sickness
- Provision of pension benefits on retirement
- Investment of surplus personal funds
Interests of auditors (1)
- May require advice on assessment of provisions
Interests of sponsors of benefit schemes (1)
- May require advice on the assessment of future liability to pay benefits
Interests of investment fund managers (1)
- May require advice on investment strategy taking into consideration the need to meet future liabilities
Interests of members of investment schemes (1)
- How to invest in order to meet specific liabilities or objectives
Interests of Sponsors of capital projects (3)
- Assessment of the risks underlying the project
- Consideration of potential risk mitigation techniques
- Evaluation of future cashflows
Interests of banks (3)
- Provision of investment and savings products and investment of surplus funds
- Advice to central banks on monetary strategy
- Providing account holders with disclosure info on products
Interests of government (4)
- Setting legislation that impacts on the provision of financial products, schemes, contracts and transactions that provide benefits on future financial events
- Monitoring the adherence to this legislation
- Funding benefit provision by the state
- Monitoring the funding of benefit provision by the state
Interests of regulators (1)
- Ensuring regulatory requirements are met
