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CA1 - Professionalism and Environment > Stakeholders > Flashcards

Stakeholders Flashcards

1
Q

Stakeholders

List Stakeholders in Insurance Company

A 
CAPERED PICS
Competitors
Auditors
Pension scheme (Potential/Existing)
Employees
Regulator
Existing/potential Policyholders
Directors
Potential purchasers
Intermediaries
Creditors
Shareholders
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2
Q

Stakeholders

List Stakeholders in DB Scheme

A 
A TACTS GAME
Accountants
Taxpayers
Auditors
Creditors 
Trustees 
Sponsors 
Government
Administrators
Members
Employees
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3
Q

List the External Environment Factors

A 
CREATE GREAT LISTS
Commercial Issues
Regulation and Legislation
Environmental issues
Accounting Standards
Tax
Economic Issues (e.g. inflation/int rates)
Governance
Risk management requirements
Experience from overseas
Adequacy of capital
Trends - demographic
Lifestyle Considerations
Institutional Structure (mutual/proprietary)
Social trends
Tech
State benefits
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4
Q

3 Types of Advice from Actuary

A

Indicative - Giving opinion without fully investigating the issue

Factual - Based on research of facts e.g. legislation

Recommendations - Consistent with requirements after doing research/modelling

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5
Q

Potential Conflicts of Interest

A

RIST
Regulatory authority (notify them if client if acting in way that would prejudice customers)
Independence (should be independent from each side)
Specialists (if their company is specialists they may be working both sides)
TCF (customer/client interests)

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6
Q

Professional jobs require what?

A

PROFECCIN

Professional Manner
Reliability
Others views are valid
Familiarity with clients and needs
Engender trusting - direct and personal relationship
Competence
Conflicts of
Interest - 
No jargon, clear communication
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7
Q

How do you manage C of I

A

DRAW-WCW

Disclosure to both parties
Records of work assignments
Avoid them
Whistle blowing if TCF ignored
Chinese
Walls
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8
Q

3 Parts of Actuarial Control Cycle

A

Specify Problem
Monitor
Develop Solution

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9
Q

What do Statutory roles involve?

A

SCALPER

Statement of A/L
Compliance with professional guidance
Assets and Liability valn with legisln
Liability valuation in context of assets
Provision for liabilities
Ensuring premiums/contributions sufficient to meet future commitments considering free assets
Records should be accurate and kept for liability valuation

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10
Q

Expand on 1st part of ACC

A

ASS RAM SCART

Analyse
Stakeholders (the risks of them)
Set out clearly the problem from each point of view

Risk
Assesment and
Managing (it gives clear assessment of them)

Sub
Cycle to determine price of plans
Alternate
Risk
Tranfer - analysis for design of plans transferring risk from one stakeholder to another
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11
Q

Expand on 2nd part of ACC

A

I DESPAIRS

Interpret results of modelling
Determine proposed solution to problem
Examine if the actuarial models used can be adapted
Select the most appropriate model or new one
Proposal formalise
Alternative solution considerations and effects
Implication of model…
Results on overall problem
Stakeholder implications from results

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12
Q

Expand on the 3rd part of the ACC

A

F-RUIDE

Feedback into problem spec and soln dev stage
Reccurence of departures from target outcome
Updating the..
Investigation
Departures of the target outcome of models are identified
Experience is monitored and investigation updated for that

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13
Q

What are the principal aims of regulation?

A

ICE MOP

Inefficiency in markets (correct perceived)
Confidence maintaining in financial system
Efficient market promotion

Maintain confidence in financial system
Orderly rake promotion
Prevent and reduce financial crime

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14
Q

What are the 5 types of regulation?

A

MUSSV

Mixed regimes
Unregulated 
Self regulation
Statutory
Voluntary cods of conduct
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15
Q

Advantages of self regulation?

A

RIC

Rapid response to changes in market needs is possible theoretically
Implemented by people with greatest knowledge of market who have great incentive for optimal cost benefit ratio
Cooperation with self regulator more likely than government bureaucracy

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16
Q

Main problems with self regulator

A

3CiL

3rd parties views are less likely to be taken into account rather than industry point of view
Closeness of regulator to industry
Inhibit new entrants is possible
Low public confidence even if regime operating efficiently and effectively

17
Q

Advantages of statutory regulation?

A

COE
Confidence is higher from public
Open to less abuse than alternatives
Economies of scale may be achieved by grouping activities by function and not type of business

18
Q

Disadvantages of statutory regulation

A

CIRCE
Costly
Inflexible
Rules that are unnecessary costly and do t achieve aims may be implemented by outsiders
Crap
Efficiency, attempts to improve market efficiency by government

19
Q

What ae the 5 type of financial products (contracts)?

A

DRIP I

Derivatives
Reinsurance contracts
Investment schemes
Pension schemes
Insurance contracts
20
Q

What are the types of needs?

A

FLEC
Future, relate to future aspirations
Logical, determined by analysis and prioritisation
Emotional, what customer thinks/wants to be necessary rather than needs
Current, has an immediate effect on circumstances

21
Q

What types of things can benefits be? E.g. When ae they paid

A

PIFfy

Paid on events predictable/unpredictable in time
Immediate consumption
From accumulation of disposable income and capital

22
Q

How can we summarise a consumers logical needs?

A

PUA

Protection eg. Against death
Unknown, accumulation for unknown purpose out of remaining income or capital eg. Take advantage of tax regime
Known, accumulation for known purpose eg. Retirement income

23
Q

Which people can provide benefits for individuals?

A

FISE

Financial institutions or other corporations
Individuals
State
Employers or groups of them

24
Q

What ways can the state play a role in benefit provision, which of them are financial?

A

REDRESS

Regulate to encourage/compel provision by or on behalf of some of population, F
Educate/require education about importance of providing for the future, F
Direct provision
Regulation of provision from other providers
Encourage provision
Security, ensure promises made are kept to through regulation of bodies providing benefits, F
Some or all of the population provided with benefits, F

25
Q

Give examples of the state providing benefits?

A 
Pensions
Statutory sick pay
Protection for dependants on death
Savings plans eg NSandI
State bank
Gilts
26
Q

Why would an employers provide benefits?

A

PERD

Pooling of expenses and expertise
Encouragement or compulsion from state
Retain and attract good staff
Dependants, desire to look after employee and dependants above state benefits level

27
Q

How can employers play a role In providing benefits?

A

ECOS
Educate
Compel or encourage
Orderly financing of benefits for employees
Schemes, like pension schemes, provide facility for provision of benefits

28
Q

How can employees be rewarded in providing benefits to them?

A

Consider their contribution to the drivers of profitability that are relevant to them

29
Q

How does a flexible benefit system meet needs of different employees?

A

gMACC

Groups, different groups of people select benefits relevant to them
Menu of different benefits offered
Changing benefits is possible as circumstances change
Cost of changes and new benefits is small to the employer

30
Q

What 3 ways can an employer finance a flexi benefit scheme?

A

Employer alone
Employer and employee, subject to legislation
Employers grouped together,usually same industry, be careful about defined benefits due to problems in bankruptcy

31
Q

What ways can an individual provide benefit provision?

A

SPACE

Savings, for example salary
Pooling finances with a group e.g. Religious organisations
Accumulation of property
Continuing care retirement communities
Equity release schemes
32
Q

What are the 2 types of equity release?

A

Home reversion plan

Lifetime mortgage

CA1 - Professionalism and Environment (5 decks)

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