Important

Question 1

ACC

Answer 1

Specifying the problem
- Setting out clearly the problem from the viewpoint of each stakeholder
- Assessing and analyzing the risks for each stakeholder
- Considering the strategic courses of action available to manage, mitigate or transfer the particular risks in question
- Analyzing the options for the design of solutions to the problem that transfer risk from one set of stakeholders to another

Developing the solution
- Selecting Appropriate Actuarial Models
- Appropriate Assumptions
- Implications on the overall results and for for all Stakeholders
- Determine a Proposed Solution and Alternatives

Monitoring the experience
- Analyzing periodically the actual experience against expected
- Identifying causes of departure from expected experience and determining whether each source is one-off or likely to recur
- Feeding back into the specifying the problem and developing the solution stages of the ACC
- Making sure the model is ‘dynamic’ (i.e. assumptions are consistent) and reflects current experience

General Commercial and Economic Environment
- ESPERIA

Question 2

Principle aims of regulation

Answer 2

• to correct perceived market inefficiencies and to promote efficient and orderly markets
• to protect consumers of financial products
• to maintain confidence in the financial system
• to help reduce financial crime

Question 3

List the main functions of the regulator

Answer 3

SERVICE

Setting sanctions
Enforcing regulations
Reviewing and influencing government policy
Vetting and registering firms and individuals authorised to conduct certain types of busines
Investigating breaches
Checking (supervising) management and conduct of providers
Educating consumers and the public

Question 4

What actions can the regulator take to reduce asymmetries of information?

Answer 4

SPIDER CC

Selling practices regulated (addresses negotiation weakness of and individual)

Price controls imposed (addresses negotiation weakness of and individual)

Insider trading prevented

Disclosure of full information in an understandable form

Educating consumers

Restricting knowledge to publicly available

Consumer cooling off period (the right to cancel a policy without a penalty)

Chinese walls established (virtual barriers to block the exchange of information between departments of a company - reduces conflicts of interests

Also,
Fairness