Regulation Flashcards
7 cards from real Actuary Certification practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulation flashcards as text
A credentialed actuary signs a Statement of Actuarial Opinion (SAO) for a property-casualty insurer. What does the actuary opine on in the SAO?
Answer: Whether loss and loss adjustment expense reserves are fairly stated in accordance with accepted actuarial standards
The SAO for a P&C insurer requires the appointed actuary to opine on whether the carried reserves for unpaid claims and claim adjustment expenses make a reasonable provision for the obligations.
Under ERISA, which type of employee benefit plan is subject to minimum funding standards?
Answer: Defined benefit pension plans only
ERISA's minimum funding standards apply to defined benefit pension plans, requiring employers to contribute enough to keep plans adequately funded.
The NAIC's Own Risk and Solvency Assessment (ORSA) requirement applies to which insurers?
Answer: Insurers with annual written premiums exceeding $500 million, or part of an insurance group exceeding $1 billion
ORSA requirements generally apply to insurers with premium thresholds of $500 million individually or $1 billion as part of a group, requiring them to assess their own risk and capital adequacy.
In actuarial practice, 'adverse development' on prior accident year reserves most directly indicates:
Answer: That the insurer underestimated its ultimate loss liabilities for those prior years
Adverse development means actual losses have emerged higher than previously reserved, indicating the prior reserve estimates were insufficient.
Which standard requires an actuary performing actuarial services for a client to be free of conflicts of interest or to disclose them?
Answer: Precept 7 of the Code of Professional Conduct
Precept 7 of the Code of Professional Conduct requires actuaries to disclose any known conflicts of interest that may exist or arise in the performance of actuarial services.
Under Solvency II (the EU framework), which pillar addresses internal governance, risk management systems, and the ORSA?
Answer: Pillar 2 — Supervisory review process and governance
Solvency II Pillar 2 covers qualitative requirements including internal governance, risk management systems, and the Own Risk and Solvency Assessment (ORSA).
An appointed actuary for a life insurer must hold which minimum professional designation to sign the actuarial opinion under the Standard Valuation Law?
Answer: Member of the American Academy of Actuaries (MAAA) with relevant life qualifications
The SVL requires the appointed actuary to be a member of the American Academy of Actuaries and meet specific qualification standards for life insurance valuation.