Ch 1: Actuarial Advice Flashcards
Possible clients whom actuaries can advise (private sector
INSURANCE COMPANY:
- prospective policyholders
- policyholders
- board of directors
- shareholders
- creditors
- auditors
BENEFIT SCHEMES:
- members and their dependents
- employers
- trustees
- sponsors
- auditors of the sponsors
OTHER:
- employees
- investment fund managers
- members of investment schemes
- sponsors of capital projects
- banks
List public sector stakeholders that an actuary can advise
- Central and local government departments
- Regulatory bodies
- Central banks
List 8 areas in which actuaries can provide advise to the board of directors of an insurance company
- Meeting legislative requirements
- Investment and management of assets
- Managing liabilities
- Determining provisions
- Premium rating
- Meeting policyholders’s reasonable expectations (PRE)
- Good corporate governance
- Reinsurance requirements
List 6 areas in which actuaries can provide advice to prospectice policyholders
- personal protection against death and illness
- protection of property
- investment.
Other examples are: ·
* retirement planning
* protection against requiring long-term home or nursing care
* protection against personal liability claims (e.g. for causing a motor accident)
List 7 areas in which actuaries can provide advice to employers
- Protection against financial loss arising from sickness or death.
- Protection of assets
- Provision of work related benefits that will attract and retain good quality staff
- Meeting legislative requirements
- Managing the costs of running the business
- Quantification of surplus capital
- Investment of surplus capital
List 12 stakeholders involved in a pension scheme
- Members
- Members’ dependents
- Trustees
- Shareholders of the sponsor
- Directors of the sponsor
- Employees of the sponsor (Who are not scheme members)
- Auditors / accountants
- Regulatory bodies
- Government
- Administrators
- Investment fund managers
- Creditors of the sponsor
List 3 areas actuaries can advise Trustees of benfit schemes
- managing the assets of the scheme
- paying the benefits promised under the scheme as they fall due
- maintaining solvency.
List 4 areas in which actuaries can provide advice to the sponsor of a benefit scheme
- 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
List 3 areas actuaries can advise Employees
- provision of protection benefits on death or sickness
- provision of pension benefits on retirement
- investment of surplus personal funds.
Sponsors of Capital Projects
- assessment of the risks underlying the project
- consideration of potential risk mitigation techniques
- evaluation of the future cashflows.
List 4 areas in which actuaries can provide advise to the government
- 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 the legislation
- Funding benefit provision by the state
- Monitoring the funding of benefit provision by the state
List four sources an actuary can use to get information about a client
- Company accounts
- Other published information
- Client’s website
- Meetings and less formal discussions with the client, to help understand the client’s culture
What are the 3 different types of advice an actuary can give?
- Factual - based on research of facts
- Indicative - giving an opinion without fully investigating the issue, such as in response to a direct question
- Recommendations - researched and modeled forecasts, alternative weighted, recommendations made consistent with requirements, work normally peer reviewed
5 principles of the Actuaries’code
- integrity
- competence and care
- impartiality
- compliance
- speaking up
- communication
What are the aims of the TASs
To ensure that the users of actuarial information can have confidence in that information’s relevance, transparency of assumptions, completeness and comprehensibility, including the communication of any uncertainty inherent in the information.
