Chapter Tests Flashcards
If an insurer is experiencing severe delays settling its claims, this is most likely to be seen as a failure to:
Put its customers’ needs first.
Chapter reference 1E4
An effective team leader should be able to create a cohesive team and also be:
Highly customer-focused and a good role model.
Chapter reference 2C5
To whom does the UK Corporate Governance Code apply?
UK listed companies only.
Chapter reference 2A3
Tactical information is used by a company to plan its resources, which include[s]:
Time, money and people.
Chapter reference 3D2
A company is looking to list as a public limited company. How much allotted share capital must it have?
£50,000
A UK listed insurer also has a USA stock exchange listing. In addition to UK corporate governance requirements, it will also need to comply with the requirements of the:
Sarbanes-Oxley Act 2002.
Chapter reference 4A2A
A public limited company that has a year end of 31 December must file its accounts by the following:
30 June
Chapter reference 4C2D
If a UK stock market listed business is NOT fully compliant with the UK Corporate Governance Code, it must:
State in its annual report where it is not compliant and provide reasons.
Chapter reference 4A1C
The UK Risk Management Standard sets out the key elements of risk analysis. These include the following, EXCEPT:
Risk mitigation
Chapter reference 4D3D
Who is ultimately responsible within a limited company for ensuring that the required company documents are filed with Companies House?
All of the directors.
Chapter reference 4B1
An individual’s role is to set policy, monitor controls and check adherence to it. Where is this role most likely to fall within the ‘three lines of defence’ model of risk management?
The second line of defence.
Chapter reference 4D1
If a senior manager within internal audit identifies breaches of internal controls, what action is he most likely to take?
Record the breaches and make recommendations to line management.
Chapter reference 5H2
A risk assessment rating framework assesses risks based on:
Impact and probability
Chapter reference 5B1
Under the Solvency II rules, what is a calculation kernel?
The model used in the quantification of capital requirements for all risk categories.
Chapter reference 5D
Which body is currently the UK’s main independent regulator of corporate financial reporting and governance?
Financial Reporting Council.
Chapter reference 7C1
If a public company fails to meet the Financial Reporting Council’s [FRC] Board requirements, which FRC Committee can seek an explanation from the company’s directors?
The Conduct Committee.
Chapter reference 7C1
Under the Companies Act 2006, directors of UK incorporated businesses must not approve financial statements unless they are satisfied they are:
Accurate and fair
Chapter reference 7B4
What is the standards-setting body called that is responsible for developing a single set of global accounting standards?
The IFRS Foundation.
Chapter reference 7A
A UK listed firm prepares its accounts in accordance with the International Financial Reporting Standards. If the directors do NOT believe this provides an accurate picture of the company’s trading position, what must they do?
Depart from the standards and provide detailed disclosures why.
Chapter reference 7B4
Why typically are a number of methods used when projecting claim costs?
To ensure a range of different scenarios are considered.
Chapter reference 8C2
The ‘incurred but not reported’ test is important for insurers because it:
calculates the likely claims costs in a particular financial reporting period.
Chapter reference 8B
Which method is most likely to be used when determining the claims exposure for pollution risks?
Exposure based method
Chapter reference 8C2
For what class of insurance business is it most difficult to estimate claims reserves?
Employers liability
Chapter reference 8A
An insurance company has net assets of £100m; liabilities of £80m and has an earned premium [net of reinsurance] of £60m. What is its solvency ratio?
Solvency ratio = Net assets (total assets - total liabilities) / earned premium net of reinsurance = £100m / £60m = 1.67
Chapter reference 9B1
When looking at a claims ratio, the:
Lower the ratio the more secure the position is.
Chapter reference 9B4
Under Solvency II, UK authorised insurers should be aware that they must meet:
Both the solvency capital requirement and the minimum capital requirement at all times.
Chapter reference 10B2A
What part of the Solvency II requirements does an own risk and solvency assessment [ORSA] fall under?
Pillar II
Chapter reference 10B2B
