Actuarial Practice and Stakeholders

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Questions and Answers

Which of the following is NOT an aspect an actuary advises on for insurance company management?

Maintaining good corporate governance

Setting promotional strategies (correct)

Managing the company's liabilities

Meeting legislative requirements

Shareholders are primarily concerned with the certainty of receiving the money owed to them.

False

What is the primary concern of creditors in an insurance company?

The certainty of receiving the money owed to them.

Trustees of benefit schemes need advice on maintaining ________.

solvency Signup and view all the answers

Match the type of stakeholder with their main concern:

Shareholders = Achieving a good return on investment Creditors = Certainty of receiving money owed Trustees = Paying benefits as promised Sponsors = Managing the cost of benefits Signup and view all the answers

What is one role of actuaries when advising the government?

Set legislation affecting financial products Signup and view all the answers

Actuaries do not have any role in monitoring compliance with government legislation.

False Signup and view all the answers

What is one way actuaries support regulators?

Ensuring regulatory requirements are met Signup and view all the answers

Actuaries can assist the government by _____ funding benefit provision by the state.

monitoring Signup and view all the answers

Match the following actuarial responsibilities with their descriptions:

Setting the legislation = Advising on laws affecting financial products Monitoring compliance = Ensuring adherence to legislation Funding benefit provision = Assessing financial resources for state benefits Supporting regulators = Facilitating adherence to regulatory requirements Signup and view all the answers

Which of the following is NOT a type of actuarial advice?

Advisory Signup and view all the answers

Actuarial advice should be based on assumptions relevant to the client's circumstances.

True Signup and view all the answers

What is the primary focus of the 'Client-Centric Approach' in providing actuarial advice?

The client's needs and preferences should guide the chosen solution. Signup and view all the answers

Failure to adhere to professional conduct can lead to and .

penalties, disqualification Signup and view all the answers

Match the type of actuarial advice with its description:

Indicative = Thoroughly researched, modelled, and considering alternative solutions. Factual = Based on research. Recommendations = A high-level opinion without exhaustive investigation. Signup and view all the answers

Which of the following are stakeholders that actuaries can advise in the private sector? (Select all that apply)

Policyholders Signup and view all the answers

Actuaries only provide advice to clients in the private sector.

False Signup and view all the answers

Name one type of organization that actuaries can advise in the public sector.

Central banks Signup and view all the answers

In the private sector, actuaries may advise __________ and their dependents.

members of benefit schemes Signup and view all the answers

Match the following stakeholders with their description:

Policyholders = Individuals covered by an insurance policy Trustees of benefit schemes = Individuals responsible for managing benefit schemes Employers = Organizations providing employment to individuals Investment fund managers = Professionals managing investment portfolios Signup and view all the answers

Which of the following areas can actuaries advise existing and prospective policyholders on?

Personal protection against death and illness Signup and view all the answers

Actuaries only advise employers on managing business costs and do not provide advice on employee benefits.

False Signup and view all the answers

What type of advice do actuaries provide to members of benefit schemes regarding future events?

Benefits related to death, retirement, illness, and withdrawal Signup and view all the answers

Actuaries advise employers on protecting against financial loss from employee or .

death, illness Signup and view all the answers

Match the following advice provided by actuaries with the appropriate stakeholder:

Personal protection against death = Existing and prospective policyholders Providing work-related benefits = Employers Benefits for future events = Members of benefit schemes Investing surplus capital = Employers Signup and view all the answers

Which of the following is considered a significant stakeholder in an insurance company takeover?

Shareholders of Company A Signup and view all the answers

The primary concern of the government in an insurance company takeover is the security of existing policyholders.

False Signup and view all the answers

Name one less significant stakeholder affected by an insurance company takeover.

Financial providers Signup and view all the answers

The board of directors of the ________ company has a vested interest in the outcomes of an insurance company takeover.

combined Signup and view all the answers

Match the following stakeholders with their respective concerns regarding the takeover:

Auditors = Accuracy of financial reports Government = Market competition levels Employees of Company B = Job security Regulator = Security of existing policyholders Signup and view all the answers

Who is considered a primary stakeholder in an investment policy for a pension scheme?

Dependants of the scheme members Signup and view all the answers

Employees not part of the pension scheme have no potential interest in the investment policy outcomes.

False Signup and view all the answers

Name one impact of actuary advice on the employer's financial responsibilities.

Level of taxes on company profits Signup and view all the answers

Fund managers are responsible for _________ in accordance with the investment policy.

implementing the policy Signup and view all the answers

Match the following stakeholder groups with their primary interests:

Employers = Pension scheme funding Scheme members = Retirement benefits Creditors = Financial stability of the sponsoring employer Regulatory authorities = Compliance and monitoring Signup and view all the answers

What is a key consideration for actuaries when advising clients?

Ensuring advice meets the needs of all stakeholders. Signup and view all the answers

Subjective attitudes of clients towards risk are irrelevant to actuarial advice.

False Signup and view all the answers

Why is it important for actuaries to seek factual information about their clients?

To provide accurate and relevant advice based on the client's specific circumstances. Signup and view all the answers

Actuaries may advise on the ______ of benefit schemes.

sustainability Signup and view all the answers

Match the stakeholders with their primary concern when receiving actuarial advice:

Shareholders = Profitability and return on investment Policyholders = Fair and competitive insurance premiums Regulators = Compliance with laws and regulations Trustees of benefit schemes = Long-term sustainability of the scheme Signup and view all the answers

Which of the following factors might an actuary advising an insurance company's board of directors regarding a business expansion impact?

The level of benefits received by policyholders Signup and view all the answers

It is only necessary for actuaries to consider the interests of stakeholders who pay for their advice.

False Signup and view all the answers

What is the importance of identifying all stakeholders when providing actuarial advice?

Identifying all stakeholders is crucial because it helps the actuary understand the potential impact of their advice on each party involved and make informed decisions about their recommendations. This ensures the actuary's advice is comprehensive and takes into account all relevant perspectives. Signup and view all the answers

In many situations, the advice provided by the actuary to a client will affect other ______.

stakeholders Signup and view all the answers

Match the following stakeholder categories with their primary interests:

Policyholders = Receiving adequate benefits and reasonable premiums Shareholders = Maximizing returns on investment Regulators = Ensuring the financial stability of the insurance company Creditors = The solvency of the company and repayment of debts Benefit scheme sponsors = Managing the cost of providing benefits and ensuring sufficient funds for future obligations Signup and view all the answers

What is one of the key areas where actuaries provide advice to employees?

Provision of protection benefits on death or sickness Signup and view all the answers

Investment fund managers do not require actuarial advice for assessing liability obligations.

False Signup and view all the answers

What kind of assessment might benefit scheme auditors require from actuaries?

Assessment of future liabilities for benefit payments. Signup and view all the answers

Actuaries may advise banks on the provision of investment and savings products, as well as the management of surplus ________.

funds Signup and view all the answers

Match the following stakeholders with their primary advice needs:

Employees = Provision of protection benefits Investors = Investment strategy Insurance Auditors = Assessment of provisions Benefit Scheme Auditors = Future liabilities evaluation Signup and view all the answers

Study Notes

Insurance Company Board of Directors

Actuaries may advise on aspects such as:
- meeting legislative requirements for the management of the business
- investing and managing the assets of the company
- managing the liabilities of the company
- determining the levels of provisions to hold to meet future liabilities
- setting premium rates
- meeting policyholders' reasonable expectations
- good corporate governance
- obtaining appropriate and adequate reinsurance to protect the business

Insurance Company Creditors

In this case, the main issue of interest is likely to be the certainty that the monies owed to them will be paid.

Trustees of Benefit Schemes

Trustees are likely to require advice on:
- declaring additional bonuses as expected for with-profit policies
- managing the assets of the scheme
- paying the benefits promised under the scheme as they fall due
- maintaining solvency

Sponsors of Benefit Schemes

The interests and functions that actuaries can provide advice on include:
- providing protection benefits that meet the needs of the members and their dependents
- providing retirement benefits that meet the needs of the members
- managing the cost of providing the benefits
- meeting legislative requirements

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Description

This quiz explores the various roles and responsibilities of actuaries in advising insurance companies, government bodies, and other stakeholders. It covers key aspects such as stakeholder concerns, types of actuarial advice, and the importance of a client-centric approach. Test your knowledge on the significance of actuarial input in the financial and insurance sectors.

Actuarial Practice and Stakeholders

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Podcast

Questions and Answers

Which of the following is NOT an aspect an actuary advises on for insurance company management?

Shareholders are primarily concerned with the certainty of receiving the money owed to them.

What is the primary concern of creditors in an insurance company?

Trustees of benefit schemes need advice on maintaining ________.

Match the type of stakeholder with their main concern:

What is one role of actuaries when advising the government?

Actuaries do not have any role in monitoring compliance with government legislation.

What is one way actuaries support regulators?

Actuaries can assist the government by _____ funding benefit provision by the state.

Match the following actuarial responsibilities with their descriptions:

Which of the following is NOT a type of actuarial advice?

Actuarial advice should be based on assumptions relevant to the client's circumstances.

What is the primary focus of the 'Client-Centric Approach' in providing actuarial advice?

Failure to adhere to professional conduct can lead to __________ and __________.

Match the type of actuarial advice with its description:

Which of the following are stakeholders that actuaries can advise in the private sector? (Select all that apply)

Actuaries only provide advice to clients in the private sector.

Name one type of organization that actuaries can advise in the public sector.

In the private sector, actuaries may advise __________ and their dependents.

Match the following stakeholders with their description:

Which of the following areas can actuaries advise existing and prospective policyholders on?

Actuaries only advise employers on managing business costs and do not provide advice on employee benefits.

What type of advice do actuaries provide to members of benefit schemes regarding future events?

Actuaries advise employers on protecting against financial loss from employee ________ or ________.

Match the following advice provided by actuaries with the appropriate stakeholder:

Which of the following is considered a significant stakeholder in an insurance company takeover?

The primary concern of the government in an insurance company takeover is the security of existing policyholders.

Name one less significant stakeholder affected by an insurance company takeover.

The board of directors of the ________ company has a vested interest in the outcomes of an insurance company takeover.

Match the following stakeholders with their respective concerns regarding the takeover:

Who is considered a primary stakeholder in an investment policy for a pension scheme?

Employees not part of the pension scheme have no potential interest in the investment policy outcomes.

Name one impact of actuary advice on the employer's financial responsibilities.

Fund managers are responsible for _________ in accordance with the investment policy.

Match the following stakeholder groups with their primary interests:

What is a key consideration for actuaries when advising clients?

Subjective attitudes of clients towards risk are irrelevant to actuarial advice.

Why is it important for actuaries to seek factual information about their clients?

Actuaries may advise on the ______ of benefit schemes.

Match the stakeholders with their primary concern when receiving actuarial advice:

Which of the following factors might an actuary advising an insurance company's board of directors regarding a business expansion impact?

It is only necessary for actuaries to consider the interests of stakeholders who pay for their advice.

What is the importance of identifying all stakeholders when providing actuarial advice?

In many situations, the advice provided by the actuary to a client will affect other ______.

Match the following stakeholder categories with their primary interests:

What is one of the key areas where actuaries provide advice to employees?

Investment fund managers do not require actuarial advice for assessing liability obligations.

What kind of assessment might benefit scheme auditors require from actuaries?

Actuaries may advise banks on the provision of investment and savings products, as well as the management of surplus ________.

Match the following stakeholders with their primary advice needs:

Study Notes

Insurance Company Board of Directors

Insurance Company Creditors

Trustees of Benefit Schemes

Sponsors of Benefit Schemes

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