ARM 54 Chapter 2 Exam with complete
solutions 2024
COSO ydefinition yof yrisk y- yANSWER✓✓-The ypossibility ythat yan yevent ywill
yoccur yand yadversely yaffect yand yorganization's yobjectives.
COSO yEnterprise yRisk yManagement-Intergraded yFramework yTwo ytypes yof
ymonitoring y- yANSWER✓✓-The yfirst ytype yis yongoing yregular ymonitoring yby
yan yorganization's ymanagement. yThe ysecond ytype yis yperiodic yevaluation,
yoften yby yinternal yauditors. yInternal yauditors ycan yidentify yareas ywhere
ycontrol yactivities yare ydeficient yand ymake yrecommendations yto yimprove
ythem.
Solvency yII yaims yto yachieve yconsistency yacross yEurope yin ythese yAreas y-
yANSWER✓✓-•Market yconsistent ybalance ysheets
•Risk-based ycapital
•Own yrisk yand ysolvency yassessment y(ORSA)
•Senior ymanagement yaccountability y
•Supervisory yassessment
Solvency yII ythree ysupport ypillars y- yANSWER✓✓-•Pillar y1- yThis ypillar ycovers
yall ythe yfinancial yrequirements yand yaims yto yensure yfirms yare yadequately
ycapitalized ywith yrisk-based ycapital. yIt yincludes ythe yuse yof yinternal ymodels
ythat, ysubject yto ystringent ystandards yand yprior ysupervisory yapproval, yenable
ya yfirm yto ycalculate yits yregulatory ycapital yrequirements yusing yits yown
yinternal ymodeling.
•Pillar2- yThis ypillar yimposes yhigher ystandards yof yrisk ymanagement yand
ygovernance ywithin yan yorganization yand ygives ysupervisors ygreater ypowers yto
ychallenge ytheir yfirms yon yrisk ymanagement yissues. yThe yORSA yrequires ya
yfirm yto yundertake yits yown yforward-looking yself-assessment yof yits yrisks,
ycorresponding ycapital yrequirements, yand yadequacy yof ycapital yresources. y
•Pillar y3- yPillar y3 ythis ypillar yaims yfor ygreater ylevels yof ytransparency yfor yall
ysupervisors yand ythe ypublic. yThere yis ya yprivate yannual yreport yby yinsurers yto
ysupervisors yand ya ypublic ysolvency yand yfinancial ycondition yreport ythat
yincreases ythe yrequired ylevel yof ydisclosure.
Risk yManagement ystandard y- yANSWER✓✓-a ydocument ypublished yby ya
yrecognized yauthority ythat yincludes yprinciples, ycriteria, yand ybest ypractices
yfor yrisk ymanagement.
solutions 2024
COSO ydefinition yof yrisk y- yANSWER✓✓-The ypossibility ythat yan yevent ywill
yoccur yand yadversely yaffect yand yorganization's yobjectives.
COSO yEnterprise yRisk yManagement-Intergraded yFramework yTwo ytypes yof
ymonitoring y- yANSWER✓✓-The yfirst ytype yis yongoing yregular ymonitoring yby
yan yorganization's ymanagement. yThe ysecond ytype yis yperiodic yevaluation,
yoften yby yinternal yauditors. yInternal yauditors ycan yidentify yareas ywhere
ycontrol yactivities yare ydeficient yand ymake yrecommendations yto yimprove
ythem.
Solvency yII yaims yto yachieve yconsistency yacross yEurope yin ythese yAreas y-
yANSWER✓✓-•Market yconsistent ybalance ysheets
•Risk-based ycapital
•Own yrisk yand ysolvency yassessment y(ORSA)
•Senior ymanagement yaccountability y
•Supervisory yassessment
Solvency yII ythree ysupport ypillars y- yANSWER✓✓-•Pillar y1- yThis ypillar ycovers
yall ythe yfinancial yrequirements yand yaims yto yensure yfirms yare yadequately
ycapitalized ywith yrisk-based ycapital. yIt yincludes ythe yuse yof yinternal ymodels
ythat, ysubject yto ystringent ystandards yand yprior ysupervisory yapproval, yenable
ya yfirm yto ycalculate yits yregulatory ycapital yrequirements yusing yits yown
yinternal ymodeling.
•Pillar2- yThis ypillar yimposes yhigher ystandards yof yrisk ymanagement yand
ygovernance ywithin yan yorganization yand ygives ysupervisors ygreater ypowers yto
ychallenge ytheir yfirms yon yrisk ymanagement yissues. yThe yORSA yrequires ya
yfirm yto yundertake yits yown yforward-looking yself-assessment yof yits yrisks,
ycorresponding ycapital yrequirements, yand yadequacy yof ycapital yresources. y
•Pillar y3- yPillar y3 ythis ypillar yaims yfor ygreater ylevels yof ytransparency yfor yall
ysupervisors yand ythe ypublic. yThere yis ya yprivate yannual yreport yby yinsurers yto
ysupervisors yand ya ypublic ysolvency yand yfinancial ycondition yreport ythat
yincreases ythe yrequired ylevel yof ydisclosure.
Risk yManagement ystandard y- yANSWER✓✓-a ydocument ypublished yby ya
yrecognized yauthority ythat yincludes yprinciples, ycriteria, yand ybest ypractices
yfor yrisk ymanagement.
