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| Section | Weight | Objectives |
|---|---|---|
| Understand financial strength of insurance companies | 10% | - Reserving and risk capital - Capital adequacy requirements - Rating agencies and financial assessments |
| Understand roles and functions within insurance organisations | 8% | - Professional roles and responsibilities - Key departments and their interactions |
| Understand corporate governance principles | 12% | - Governance structures and responsibilities - Risk management frameworks - Compliance and ethical requirements |
| Understand insurance company accounts and standards | 10% | - Solvency and capital reporting - Specific accounting rules for insurers - Statutory and regulatory reporting |
| Case studies integrating all learning outcomes | 10% | |
| Analyse business performance using financial ratios | 10% | - Profitability and efficiency ratios - Interpretation and limitations of ratios - Solvency and liquidity measures |
| Understand accounting principles and application | 18% | - Income, expenditure and profit measurement - Basic accounting concepts and standards - Asset and liability recognition |
| Understand the structure of the insurance industry | 10% | - Market distribution channels - Main sectors and participants - Regulatory framework and bodies |
| Understand insurance business management | 12% | - Operational activities and controls - Business objectives and strategy - Underwriting and claims processes |
1. Where, if at all, in the annual report accounts, must a statement appear from the London based chairman of the retail group?
A) In the notes to the accounts
B) In the auditor's statement
C) It is not required
D) In the directors' report
2. When looking at the financial strength of an insurance company, a rating agency's methodology takes into account the company's capital adequacy which represents its
A) the number of policies in force.
B) quality and level of capital required to run the business.
C) its total gross premium income only.
D) the market share in its chosen lines.
3. An insurer's Articles of Association must include
A) the premium rates for its top-selling products.
B) the regulations for the running of the insurer's internal affairs.
C) the audited financial statements.
D) the minutes of the last board meeting.
4. The balanced scorecard approach to measuring organisation performance has four perspectives. What are the four perspectives recommended by this approach?
A) Financial; internal business processes; learning & growth; customer.
B) Planning; organising; leading; controlling.
C) Regulatory; solvency; liquidity; profitability.
D) Shareholder; policyholder; employee; supplier.
5. The term 'unearned premium' in UK's accounts will be shown as
A) a liability.
B) an asset.
C) a note to the accounts only.
D) shareholder equity.
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: B | Question # 3 Answer: B | Question # 4 Answer: A | Question # 5 Answer: A |
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Insurance Legal and Regulatory (IF1) Exam
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