Module 2 Test
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- The followings are all insurance investment regulation objectives:
- Avoidance of improper control over other companies
- Encourage investments designed to achieve social objectives
- Enhanced insurance company solvency
- Higher yields on assets
- Sufficient insurance company liquidity
- The followings are forms of governmental supervision:
- Examination of an insurance company
- Regulation of capital and surplus
- Regulation of reserves
- Valuation of assets
- (Not underwriting processes)
- Disability Income Insurance is most likely to be adversely affected (i.e., experience increased costs) by increasing inflation, rising unemployment and declining interest rates.
- Public-Mandatory System is related to cost control and lower administration costs.
- With respect to the context of actuarial work, these components are considered part of the economic and social environments:
- Cultural factors
- Demographic structure and trends
- Work and employment patterns
- (Not political and judicial decisions)
- You have been asked to help design a Web site to sell insurance over the Internet. The module assumes that underwriting, issuance and administration would be cheaper on the Web site.
- According to the module, a pandemic with effects similar to the 1918 influenza pandemic could be expected to cause:
- Excess mortality that can be easily predicted by analyzing the means predicted by current mortality models.
- Short term only claims increases for health insurers.
- (Not reuslting in significant relative short-term increases to mortality and morbidity rates for the working population in developed countries)
- (Not resulting in health insurers to have larger relative losses than life insurers.)
There are many factors that influence the economic and business environment and create opportunities for actuarial expertise. Each of the following is an example of a potential economic influence on the North American business environment. According to the module, all of the examples reflect today�s actual business environment:
- Lapse rates are influenced by the attractiveness of alternative investments.
- Higher inflation generally relates to an increase in investment opportunities.
- There will be more mergers and acquisitions during a recessionary phase of the economic cycle.
- A prolonged poor performance in the stock market will influence the sales of variable insurance products.