CIA.CSOP Flashcards
Briefly describe when an actuarial approximation is ‘appropriate’
An approximation is appropriate if it does any of these without affecting the result:
- reduces cost
- reduces time
- improves control
Approximation should strike a balance between benefit and effort
Identify 4 examples of quality assurance PROCESSES
- Check calculations
- Validate models
- Redo the work
- Peer review
Identify 3 CONSIDERATIONS in determining what quality assurance processes to perform
- Purpose
- Complexity
- Significance of work
- Vulnerability to error
- Expectations of user
- Legislative requirements (for peer review)
Identify 3 items an actuary should consider before using using another person’s work
- Qualifications of the other person
(ACAS or FCAS is good) - Regular communication & info-sharing with the other person
- Awareness by the other person of how the work is being used
Identify the purpose of CIA/CICA Joint Policy Statement (3)
JPS discusses:
- Reliance of auditor & actuary on each other’s work
- Interaction between auditor & actuary
- Disclosure of responsibilities of auditor & actuary
Define ‘enquiring professional’
A professional who relies on the work of another responding professional in the course of their own work
Define ‘responding professional’
A professional whose work is being used by another enquiring professional
Identify management’s responsibility under JPS regarding financial statements
Management has overall responsibility for F/S (may include amounts determined by actuary)
Identify actuary’s responsibility under JPS regarding financial statements
Actuary IS responsible for reliability and sufficiency of data
Identify auditor’s responsibility under JPS regarding financial statements
Auditor IS responsible for integrity of financial statements (financial position, operations, cash flows)
Identify 3 communication requirements for enquiring professional with responding professional
- Notify responder that work is being used
- Notify responder regarding needs
(materiality, subsequent events, timing) - Request confirmation of responder’s appointment, professional standing, observance to standards
Identify 3 communication requirements for responding professional with enquiring professional
- Confirm that work will be done
- Confirm appointment, professional standing, observance of standards
- Notify of any issues in meeting enquiring professional’s needs
Identify & briefly describe 4 types of actuarial reports according to CSOP 1700
- External report
- formal & detailed
- range of appropriate reports is narrow (narrower than for internal reports) - Internal report
- may be formal & detailed OR informal & abbreviated depending on use &
user
- range of appropriate reports is wide (wider than for external reports) - Oral report
- useful to an internal user
- disadvantage (versus internal report) is no written record - Summary report
- a simplified way to communicate actuary’s analysis
- may be part of an external or internal report
Identify 4 items included in an external report according to CSOP 1700
- name of client
- description of work, use, user
- statement that it may not be appropriate for other uses
- statement about whether AAP was used
- assumptions (and justification)
- methods description
- reservations or qualifications (if any)
Identify 3 considerations in estimating claims & premium liabilities
- U/W practices
- claims handling practices
- reinsurance
- data processing systems
- accounting systems
