Chapter 1: Actuarial advice Flashcards
Professional role of an actuary
Actuaries help stakeholders to - IDENTIFY - ANALYSE - MANAGE - and MITIGATE the FINANCIAL RISKS they face.
5 principles of the Actuaries’code
- integrity
- competence and care
- impartiality
- compliance`
- communication
SAP vs APN
- Standard Actuarial Practice is compulsory to follow and failure to do so may result in a disciplinary process
- Actuarial Practice Notes are guidelines and any departures from it must be outlined
Professionalism
The way in which an actuary carries out the work and presents the advice resulting from the use of the skills acquired
Requirements to operate as a professional actuary
- recognises VIEWS of others
- detachment from own circumstances
- acts with INTEGRITY
- good COMMUNICATOR
- gives sound ACTUARIAL ADVICE (due to competence and skills)
- develops a direct, personal and trusting RELATIONSHIP with the client (to suitable solutions)
Knowing the client
- Sufficient BACKGROUND about the client to put the task into context
- know FOR WHOM in the firm the work is being performed
- Aware of any CONFLICTS within the firm
- Aware of COMPLAINTS procedures in place
4 Drivers promoted by the Actuarial Quality Framework
- Methods (reliability and usefulness of actuarial methods)
- Actuaries (technical skills of actuaries and ethics and professionalism of actuaries)
- Communication (communication of actuarial information and advice)
- Environment (working environment for actuaries and other factors outside the control of actuaries)
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
Issues on which actuaries can advise policyholders
- personal protection against death and illness
- protection of property
- investment
Issues on which actuaries can advise members of benefit schemes and their dependants
- provision of benefits on future events such as death, retirement, illness and withdrawal
Issues on which actuaries can advise employers
PROTECTION
- against financial loss arising from the death or ill-health of employees
- assets
PROVISION
- provision of work-related benefits that will attract and retain good quality staff
BUSINESS
- meeting legislative requirements
- managing the costs of running their business
- quantification of the amount of surplus capital in the business
- investment of surplus capital
Issues on which actuaries can advise insurance company creditor
- The certainty that the monies owed to them will be paid
Issues on which actuaries can advise trustees of benefit schemes
- managing the assets of the scheme
- paying the benefits promised under the scheme as they fall due
- maintaining solvency
Issues on which actuaries can advise sponsors of benefits 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
Issues on which actuaries can advise employees
- provision of protection benefits on death
- provision of pension benefits on retirement
- investment of surplus personal funds
