Faculty of ActuariesInstitute of Actuaries
EXAMINATIONS5 September 2001 (am)
Subject 303 — General Insurance
Time allowed: Three hours
INSTRUCTIONS TO THE CANDIDATE
1.
You have 15 minutes at the start of the examination in which to read thequestions. You are strongly encouraged to use this time for reading onlybut notes may be made. You then have three hours to complete the paper.You must not start writing your answers in the booklet until instructed todo so by the supervisor.
Write your surname in full, the initials of your other names and yourCandidate’s Number on the front of the answer booklet.Mark allocations are shown in brackets.
Attempt all 10 questions, beginning your answer to each question on aseparate sheet.
AT THE END OF THE EXAMINATION
Hand in BOTH your answer booklet and this question paper.
2.3.4.5.
In addition to this paper you should have availableActuarial Tables and an electronic calculator.
303—S2001
? Faculty of Actuaries? Institute of Actuaries
1
A general insurance company is considering writing property damage insurancecover.
State the main types of property likely to be insured.
[3]
2
Describe briefly the areas of risk and uncertainty for a general insurancecompany writing a small heterogeneous book of business. [10]
3
A general insurance company is wishing to review its reinsurance arrangements.State the factors that may influence its decision.[7]
4
Explain briefly what is meant by:(a)discovery period(b)facultative reinsurance(c)IBNER(d) moral hazard
[6]
5
(i)(ii)
Explain what is meant by EML.[2]
Write down the maximum EML that can be insured, and not go beyond
the maximum reinsurance cover, if the only reinsurance the company hasavailable is a surplus treaty with N lines of cover and a maximumretention of R.[1]An insurer (C) takes on a risk with EML of $10m. C has a risk excess ofloss contract $5m xs $1m with reinsurer A which applies before a surplustreaty with reinsurer B. The surplus treaty provides a maximumretention of $3m and 4 lines with the minimum always being ceded.Determine how much A, B and C each pay if a claim for $9m occurs.[4]
[Total 7]
(iii)
6
(i) (ii)
Describe two distinct methods used to account for general insurancebusiness.
[3]
Describe the four accounting concepts which are widely used in preparingthe financial accounts of a general insurance company.[5]
[Total 8]
303 S2001—2
7
(i) (ii) (iii)
State the prime objective regarding the investment of assets of a generalinsurance company.[2]List the factors which influence a general insurance company’sinvestment policy.
[3]
Describe briefly the ways a supervisory authority could influence theinvestment policy of a general insurer.[4]
[Total 9]
8
You are the actuary for a general insurance company that writes only ten-yearnew home warranty business, in a country where all homes must be built to a setof minimum standards. The warranty is purchased by the builder beforeconstruction commences, on behalf of the purchaser for a single up-front
premium — the purchaser of the home then becomes the policyholder on legalcompletion. The policy covers new homes from the date first occupied againstthe cost of major damage resulting from building defects where the cost of
repairs exceeds $2,000 (at 1/4/2001 prices — linked to the house re-building costindex), and the builder is no longer in business. New IT systems are beingdeveloped for all parts of the business. As part of the design process you havebeen asked to specify your data requirements.
State the items of data you are likely to require for reserving and pricingpurposes.
[12]
9
You are the actuary for a general insurance company which was established fiveyears ago. Since then it has written only third party motor insurance.(i)
Describe, with reasons, the extent to which the basic chain ladder methodmay be relied upon for assessing the required level of outstanding claimsreserves. [10]Describe the additional steps you might take to assess the required levelof reserves.[3]
[Total 13]
(ii)
10
You are the actuary for a general insurance company writing only commerciallines business. You have recently been asked by one of the underwriters toassist with a request from the owner of a small Christmas tree farm for
insurance cover against all major insurable risks in respect of that business.(i)(ii)(iii)
Describe the main insurance products the farm is likely to need and theassociated perils covered by each product.[8]List the rating factors you would use in premium rating each part of thecover in (i).[7]Describe the main characteristics of claims likely to arise under eachelement of cover. [10]
[Total 25]
303 S2001—3
精算师考试试题(13)
