Misc. Flashcards
A shareholders’ liability under a proprietary company is:
Limited to the nominal value of their shares (limited liability)
What are composite companies
Sell both life and pensions and general insurance
What is a proprietary company?
A company owned by its shareholders - most insurers
What is a mutual company?
Policyholder owned - any surplus is reinvested in the company to reduce premiums. Think NFU.
What is a captive company?
1 policy holder only. This is self insurance/ the policy holder is the company owner.
What is the most common company among the large multinational companies and where the
parent company forms a subsidiary company to underwrite certain of its own or its group’s
insurable risks
A captive company
What is a multi national company
They operate in a lot of different companies but still have a home base. All companies in different countries will have their own strategy
What is a global company
See’s the whole world as one market - wants to be a centralised business- the whole world is one market
The chief actuary of an insurance company is usually responsible for
Technical pricing of new and existing products.
Calculation of claims reserves
Calculation of risk based capital requirements.
Assessment of investment risk for funds supporting technical reserves. Plus modeling
Strategic plans cover what period
three and ten years
Tactical plans cover what period
one to three years
Operational plans cover what period
day to day up to 12 months
Which UK companies are required to report whether they are compliant with the UK Corporate
Governance Code?
As it is a a part of the Stock Exchange Listing Rules- anyone who is listed on the london stock exchange
What two things do you need to complete to become a limited company and be registered on companies house?
1- Memodrandum of association
2- Article of association
What is the primary function of financial accounting?
To provide financial information to anyone who has an interest in the company i.e stakeholders
What is management accounting?
Is the concept that information should available to managers to help track financial performance throughout the year and help set corrective action by using critical success factors
What is the difference between financial accounting and management accounting
Financial is set framework for stakeholders and is a regulatory requirement. Management can change to suit purposes and is not a regulatory requirement
Management accounting systems is not just money
Financial statements is based on historical information/ management largely focused on the future
Management statements are not required to be published but if you are a ltd company you have to publish financial statement under companies act
Fianncial statements for larger companies have to be audited to check if true and fair. Management statements are not audited.
What is a solvency margin
the amount of money or assets that a company has after debts are taken away
What do quoted limited companies have to do under the Companies Act 2006 in respect of accounting?
Provide an annual accounts return which must be audited by an independent auditor. Audited accounts are a true reflection of a company’s state to the outside world.
The annual accounts will include financial statements showing:
Income statement (Profit and Loss Account). Same thing
The balance sheet.
Cash flow statements
Narrative reports from the Chief Executive and Directors.
The Company’s plan for the future.
Other legal requirements such as the Director’s remuneration.
What financial document is best to show solvency margins
Balance sheet
What is the best financial document to show if you have made or lost money
Profit of loss
What is a balance sheet
Shows the net financial position as a snapshot by looking at assets, liabilities and equity
What are discounted claims?
claims where the amount set aside is reduced by the
investment income expected to be earned in the future on the investments supporting
the claims.