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October 2009 Q1

N

Nutan

Member
Hi all,

I was wondering if anyone would know if the following question from the Oct 2009 paper is something that would be covered by the current syllabus? I know mergers and takeovers, and issues to consider is part of the syllabus but I am not sure about the situation of presenting a report to the High Court for approval. I am hoping someone will tell me that I don't have to worry about this!

Thx in advance.

You are the Actuarial Function Holder of a medium sized UK health and care insurer writing critical illness, income protection and private medical insurance business. It has been decided that the portfolio of in-force critical illness business will be transferred to another health and care insurer. An application has been made to the High Court for approval of an insurance business transfer scheme.

You are required to prepare a report as part of the submission to the High Court for approval.

Outline the information that you would include in your report. [23]
 
Unfortunately, this type of questions can still come up in the exam. SA1 is an application paper which tests the students understanding of different situations that could arise in practice.

The question as suggested tested the understanding of CI, IP and PMI of the candidates but more importantly the ability to deal with unusual situations. For a question like this, you probably would need a very high level skills of who your audiences are, what they should know to what extent, the tone of such report and the significance and the usage of the report.

In practice, you are very likely to have some advice from legal department or take reference of other similar reports.

I don't think they are going to use high court again. But say, they may change the question slightly and suggest something like:

Outline the information you would include in the public and private submissions to the FSA in order to satisfy the Pillar 3 reporting requirement.

Again, you have the understanding of HC products. You have the understanding of what Solvency II is, briefly. You also understand the current regulatory reporting requirement. You have also learnt about risks and other stakeholder management. Then it seems reasonable that the institute could set a question like that, which is a practical question that you might face.

Good luck to you!!!
 
Thanks very much for your reply.

The question did throw me at first but having attempted it now and looked at the answer I can see what you are saying - it does cover things that you should reasonably be able to think of :)
 
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