E
E123
Member
I honestly don't even know where to start with this question especially on part (iii).
On part (ii) looking at the answers there's plenty of things that an insurer would consider for the discount rate being introduced but why would an industry body include all those things in a response to the government? The government are unlikely to care if reinsurance costs for insurers are going to change, they will only really care that the insured is paid a fair amount and if costs insurers more (or less) then so be it. Some points might be fair enough to include like questions about how it will be calculated and how often it is reviewed, but then there's other points in the answers that are bizarre. One point is there might be a change in the risk of reinsurance default, I don't even see why that would be the case, never mind why an industry body would include it in a response to the government?
Part (iii) is just outrageous, even looking at the answers I have no idea how any students would come up with them. Would have been a hard question for 5 marks if it asked for impact on insurers who sell the product, never mind about captives. I don't think I even understand why captives would be that worried about it, surely captives don't sell personal accident products to individuals and so won't be that affected? Maybe if they sell Employer's Liability to a parent company but the question says its specifically personal accident products. The Examiners report says that part (iii) was very poorly answered, not really surprising - maybe an indicator that the question is a bit stupid?
Of the 14 marks for the 2 parts I think I would have done well to get 2. It's so frustrating that there are these questions that are so left-field that can have so many marks and then the actual answers given are only half relevant. I don't know, am I way less prepared than I thought or is this question just bizarre?
On part (ii) looking at the answers there's plenty of things that an insurer would consider for the discount rate being introduced but why would an industry body include all those things in a response to the government? The government are unlikely to care if reinsurance costs for insurers are going to change, they will only really care that the insured is paid a fair amount and if costs insurers more (or less) then so be it. Some points might be fair enough to include like questions about how it will be calculated and how often it is reviewed, but then there's other points in the answers that are bizarre. One point is there might be a change in the risk of reinsurance default, I don't even see why that would be the case, never mind why an industry body would include it in a response to the government?
Part (iii) is just outrageous, even looking at the answers I have no idea how any students would come up with them. Would have been a hard question for 5 marks if it asked for impact on insurers who sell the product, never mind about captives. I don't think I even understand why captives would be that worried about it, surely captives don't sell personal accident products to individuals and so won't be that affected? Maybe if they sell Employer's Liability to a parent company but the question says its specifically personal accident products. The Examiners report says that part (iii) was very poorly answered, not really surprising - maybe an indicator that the question is a bit stupid?
Of the 14 marks for the 2 parts I think I would have done well to get 2. It's so frustrating that there are these questions that are so left-field that can have so many marks and then the actual answers given are only half relevant. I don't know, am I way less prepared than I thought or is this question just bizarre?