Preview Questions Actuary | Role Specific Skill

Question 1: Which of the following is not a key area of focus under the Solvency II Pillar III requirements?

Which action should you take?

Choose only one option

Minimum reserves for the company's liabilities

Public disclosure of the insurance company's assets and liabilities

Reporting of quantitative and qualitative risks to supervisory authorities

Disclosure of governance arrangements and risk management strategies

Question 2: How do you account for "Moral Hazard" in insurance pricing, and what statistical techniques are used to quantify its impact on premium levels?

Which action should you take?

Choose only one option

Moral hazard is irrelevant and should not be considered in pricing models

Moral hazard is addressed solely through deductibles and co-payments

Moral hazard refers to the tendency of insured individuals to take on more risk, and its impact is quantified using claim frequency and severity adjustments

Moral hazard only applies to commercial lines insurance, not personal lines

Question 3: In the UK, the Solvency II framework is implemented and monitored by which regulatory authority?

Which action should you take?

Choose only one option

The Bank of England

The Prudential Regulation Authority (PRA)

The Department for Business, Energy & Industrial Strategy (BEIS)

The Financial Conduct Authority (FCA)

Question 4: In a stress testing scenario for an insurance company, what type of data is typically used to simulate adverse conditions?

Which action should you take?

Choose only one option

Data on the average claims experience

Historical data on past catastrophic events

Data based on current market conditions

Scenario data based on hypothetical extreme market events

Question 5: When conducting a pension plan stress test, which factor would most likely be evaluated for its effect on funding levels?

Which action should you take?

Choose only one option

Impact of future salary growth assumptions

Changes in mortality assumptions

All of the above

Changes in inflation rates

Question 6: What is the primary objective when conducting a value-at-risk (VaR) analysis for a financial institution?

Which action should you take?

Choose only one option

To measure the potential loss under adverse market conditions

To calculate the interest rate risk in the portfolio

To determine the expected growth of the portfolio over a given period

To calculate the average return of the portfolio