CAA CAA Actuarial Practice & Regulation 3

Question 1

An actuary who fails to maintain their continuing professional development (CPD) requirements may face which consequence?

Accepted Answer

Loss of good standing with their professional body and potential disciplinary action

Answer

Automatic promotion to Fellow

Answer

No consequence, as CPD is voluntary

Answer

Only a nominal fine with no impact on practice rights

Question 2

What is a 'Scope of Work' document in an actuarial engagement?

Accepted Answer

A formal agreement defining the objectives, methods, data, and deliverables of an actuarial assignment

Answer

A list of the actuary's academic credentials

Answer

A government-required filing summarizing reserves

Answer

An invoice for actuarial services rendered

Question 3

Under US generally accepted actuarial principles (GAAP), actuaries must select assumptions that are:

Accepted Answer

Reasonable and appropriate given the purpose of the analysis and relevant experience

Answer

Always the most conservative possible

Answer

Identical to the prior year's assumptions regardless of experience

Answer

Mandated solely by tax regulations

Question 4

What is the purpose of the 'Actuarial Memorandum' accompanying a US statutory valuation?

Accepted Answer

To document the methods, assumptions, and data used so that another actuary can understand and evaluate the work

Answer

To market the insurer's products to brokers

Answer

To summarize the company's investment strategy

Answer

To provide a customer-facing summary of policyholder benefits

Question 5

Which of the following is an example of a 'principal' in an actuarial engagement?

Accepted Answer

An entity such as a company or board that retains or employs the actuary and relies on the actuarial work product

Answer

A junior analyst who assists the actuary

Answer

A regulatory examiner who reviews the filing

Answer

The actuarial professional body granting credentials

Question 6

What does 'adverse deviation' refer to in actuarial reserving?

Accepted Answer

A deviation in which actual results are worse than expected, causing reserves to be inadequate

Answer

A deviation in which actual results turn out more favorable than expected

Answer

A calculation error identified during peer review

Answer

A regulatory penalty for late filing