CAA Actuarial Practice & Regulation Flashcards
6 cards from real CAA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CAA Actuarial Practice & Regulation flashcards as text
What does 'materiality' mean when an actuary is deciding whether to disclose a limitation in their work?
Answer: Whether the item could reasonably be expected to influence the decisions of users of the actuarial work product
Materiality in actuarial communication refers to whether a limitation or issue could reasonably influence the decisions of those relying on the actuarial report.
Which of the following best describes the role of a 'Signing Actuary' on a US insurance company's annual statement?
Answer: A qualified actuary who takes professional responsibility for the actuarial opinion on reserve adequacy
The Signing Actuary (Appointed Actuary) is a qualified professional who takes professional responsibility for the actuarial opinion certifying that reserves are adequate.
What is the key distinction between 'best estimate' reserves and 'reserve margins' in actuarial reserving?
Answer: Best estimate reserves represent the mean expected outcome; reserve margins add a layer of prudence above the best estimate
Best estimate reserves represent the actuary's central (mean) expectation of future liabilities, while reserve margins add prudential buffers to provide additional security above that estimate.
Under the US National Association of Insurance Commissioners (NAIC) framework, what does the 'Risk-Based Capital' (RBC) system primarily assess?
Answer: The minimum capital an insurer must hold relative to the risks it faces
The NAIC Risk-Based Capital system determines the minimum capital requirement for an insurer based on the specific risks inherent in its business, ensuring solvency protection.
What is meant by 'loss development' in property and casualty actuarial reserving?
Answer: The change in reported claim amounts over time as additional information becomes available
Loss development describes how reported claim totals change as new information emerges, requiring actuaries to project ultimate losses from immature data.
Which ASOP specifically governs the selection of economic assumptions for measuring pension obligations?
Answer: ASOP No. 27
ASOP No. 27 (Selection of Economic Assumptions for Measuring Pension Obligations) provides guidance on choosing discount rates, inflation, and salary scale assumptions.