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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Understand financial strength of insurance companies | 10% | - Reserving and risk capital - Capital adequacy requirements - Rating agencies and financial assessments |
| Topic 2: Understand accounting principles and application | 18% | - Basic accounting concepts and standards - Income, expenditure and profit measurement - Asset and liability recognition |
| Topic 3: Understand corporate governance principles | 12% | - Compliance and ethical requirements - Governance structures and responsibilities - Risk management frameworks |
| Topic 4: Understand insurance company accounts and standards | 10% | - Solvency and capital reporting - Specific accounting rules for insurers - Statutory and regulatory reporting |
| Topic 5: Understand insurance business management | 12% | - Operational activities and controls - Underwriting and claims processes - Business objectives and strategy |
| Topic 6: Understand roles and functions within insurance organisations | 8% | - Key departments and their interactions - Professional roles and responsibilities |
| Topic 7: Analyse business performance using financial ratios | 10% | - Solvency and liquidity measures - Profitability and efficiency ratios - Interpretation and limitations of ratios |
| Topic 8: Understand the structure of the insurance industry | 10% | - Regulatory framework and bodies - Main sectors and participants - Market distribution channels |
| Topic 9: Case studies integrating all learning outcomes | 10% |
1. A public limited company which has a year end of 31 December must file their accounts by the following:
A) 31 December.
B) 31 March.
C) 30 June.
D) 30 September.
2. Under the activity-based costing system used by the insurer, a department regarded as a profit centre will...?
A) be solely responsible for its investment income.
B) not be allocated any costs.
C) be exempt from internal budgetary control.
D) be invoiced by a central department on a cost per unit basis.
3. An insurance company uses the double-entry accounting principle for recording insurance transactions to reflect that it has
A) paid a claim and reduced its asset base.
B) revalued its fixed assets.
C) created a new liability that reduces equity.
D) earned an amount of income which is balanced by an increase in cash.
4. If a company were to outsource specialist-claims handling services and extend the current 30 day period of credit given to brokers was extended to 90 days then what would be the consequence?
A) The solvency margin will immediately increase
B) Premium income will accelerate
C) The combined operating ratio will improve
D) Financial resources will be impaired
5. 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 first line of defence.
C) The external auditor's remit.
D) The third line of defence.
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: D | Question # 3 Answer: D | Question # 4 Answer: D | Question # 5 Answer: A |
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