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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Understand financial strength of insurance companies | 10% | - Rating agencies and financial assessments - Reserving and risk capital - Capital adequacy requirements |
| Topic 2: Understand roles and functions within insurance organisations | 8% | - Professional roles and responsibilities - Key departments and their interactions |
| Topic 3: Understand the structure of the insurance industry | 10% | - Market distribution channels - Regulatory framework and bodies - Main sectors and participants |
| Topic 4: Understand insurance business management | 12% | - Business objectives and strategy - Underwriting and claims processes - Operational activities and controls |
| Topic 5: Analyse business performance using financial ratios | 10% | - Profitability and efficiency ratios - Solvency and liquidity measures - Interpretation and limitations of ratios |
| Topic 6: Understand corporate governance principles | 12% | - Governance structures and responsibilities - Compliance and ethical requirements - Risk management frameworks |
| Topic 7: Case studies integrating all learning outcomes | 10% | |
| Topic 8: Understand accounting principles and application | 18% | - Income, expenditure and profit measurement - Asset and liability recognition - Basic accounting concepts and standards |
| Topic 9: Understand insurance company accounts and standards | 10% | - Solvency and capital reporting - Statutory and regulatory reporting - Specific accounting rules for insurers |
1. It has been deemed essential that the Information Technology (IT) department have a broad role, working closely with the business. If the IT department are to fulfil its role within the company, it must
A) report directly to the internal audit function.
B) operate entirely independently from day-to-day operations.
C) outsource all non-core functions.
D) make a proactive contribution to the development of business strategy.
2. The financial accounts differ to the management accounts that are produced internally within the insurer. This is because the financial accounts are?
A) produced to a higher standard of accuracy
B) subject to statutory regulation and prescribed formats
C) primarily used for making pricing decisions
D) record the financial impact of events whereas management accounts provides forecasts
3. An individual's role is to set policy, monitor controls and check adherence to it. Where is this role most likely to fall within the 'three lines of defence' model of risk management?
A) The second line of defence.
B) The external auditor's remit.
C) The first line of defence.
D) The third line of defence.
4. Under the Solvency II rules, what is a calculation kernel?
A) A register of all IT hardware assets.
B) The process for calculating a broker's commission.
C) The external auditor's primary testing tool.
D) The model used in the quantification of capital requirements for all risk categories.
5. In the context of management information systems, a control cycle is best described as the
A) comparison against a plan and production of reports by exception.
B) training program for new IT staff.
C) full automation of the underwriting process.
D) process of encrypting sensitive client data.
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: D | Question # 3 Answer: A | Question # 4 Answer: D | Question # 5 Answer: A |
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