M92 Flashcards
Solvency Ratio for Insurance companies compares:
Net assets to premium net of reinsurance
In Standard and Poor’s analystical framework which component looks at the insurers potential need for additional capital in the furute?
Financial Flexibility
Lamfalussy 4 level process in solvency II
Aims to improve speed and effectiveness Looks at:
1 ) Framework Principles
2 ) Implementing Measures
3 ) Issuing guidelines on implementation of rules
4 ) Enforcement
Operational, strategic and tactical plans:
Operational - Day to day running of business
Tactical - Tactics to acheive plans - 1 year (Short term)
Strategic - High level overview - 5 years
Under reserving makes the claims ratio look:
Better
What rating looks vulnerable and has characteristics that outweigh strengths?
BB
Regulatory requirements of material outsourcing:
-Clearly Stated duties
-Service provider commits to laws and regs
-Disclosure of events that may impact service provided
-Notice period of termination to allow the firm to make new
arangements
-Audit access
-Effective management
Financial statement that is the best indicator of liquidity:
- Cash flow statement
Income vs Revenue
Revenue = Income a company generates before any expenses are taken out.
Income = Revenues minus costs of doing business, such as depreciation, interest, tax and other expenses.
Accounting equation
Assets = Equity + Liabilities
Sunk Costs
Costs which are the product of a past decision
All companies on the UK stock exchange must prepare their accounts in accordance with:
IFRS
Discounted claims are:
Claims where the amount set aside is reduced by the expected investment income.
