Hi, Hope everyone have a great holiday. can anyone help me with the following questions: From Practice questions: Q1: suggest conditions that GI might have to adhere to before it is allowed to write insurance business... By looking at the answer, i am wondering is the answer relate to any section of chapter 4? and also why not mentioning sufficient capital is required in the answer? Q3. part (ii) one of the disadvantage of statutory minimum margin approach is "direct companies use same calculations as pure reinsurers" . what is it mean ? so pure reinsurer derive the statutory min margin by % of premium or incurred ? I dont think so .. Q3 (iii) policyholder protect: by looking at the answer, i am wondering which part of material in chapter 4 mentioning FSCS with such detailed (eg 100% of future claims incurred before the wind up from compulsory types of insurance etc... Is SA3 question always beyond the reading material ? or it is just practice questions ? thank you so much
Q1: This is covered more by Subject SP7, rather than Subject SA3 Chapter 4. Sufficient capital is a valid extra point, although it might already be covered by 'solvency margin' or 'assets' or even 'investment policy', depending on what was meant exactly by each of these. Q3 (ii): Before Solvency II and the ICAS regime in the UK, this was indeed the method used by the UK regulator to assess solvency. Pure reinsurers followed the same calculation as insurers. Q3 (iii): This level of detail is not covered explicitly by Chapter 4. You should expect exam questions to often (but not always) go beyond the material in the Core Reading and Course Notes. See p23 of the Study Guide. Also see Chapter 13, and the bottom of Chapter 17 page 4.
