RIMS Regulatory Compliance & Ethical Standards 3

Question 1

The Dodd-Frank Wall Street Reform and Consumer Protection Act created which entity to oversee systemic risk in the financial sector?

Accepted Answer

Financial Stability Oversight Council (FSOC)

Answer

The Financial Stability Oversight Council (FSOC) was created by Dodd-Frank to identify and respond to systemic risks to U.S. financial stability.

Question 2

In insurance regulation, the McCarran-Ferguson Act grants primary regulatory authority over insurance to:

Accepted Answer

Individual state governments

Answer

The McCarran-Ferguson Act of 1945 affirms that regulating the insurance industry is the responsibility of individual states.

Question 3

Which RIMS ethical principle requires risk management professionals to maintain and improve their knowledge and skills?

Accepted Answer

Competence

Answer

The competence principle requires risk professionals to continuously develop their expertise to serve their organizations effectively.

Question 4

An organization's enterprise risk management (ERM) program must comply with Sarbanes-Oxley primarily because SOX requires:

Accepted Answer

Public companies to disclose material risks and maintain effective internal controls

Answer

SOX requires public companies to disclose material risks in their annual reports and maintain adequate internal controls over financial reporting.

Question 5

A risk manager working with an insurance broker discovers the broker receives undisclosed compensation from an insurer. This BEST represents a violation of:

Accepted Answer

Fiduciary duty and disclosure requirements

Answer

Undisclosed broker compensation violates fiduciary duty and transparency requirements, as brokers must disclose all compensation arrangements to their clients.

(RIMS) Risk and Insurance Management Society Certification Practice Test

(RIMS) Risk and Insurance Management Society Certification Practice Test

RIMS Regulatory Compliance & Ethical Standards 3