LOMA 371 Exam Questions with Correct Answers

LOMA 371 Exam Questions with Correct Answers Product development - Answer-The pricess companies use to create new products or modify existing products Technical design (product design) - Answer-The phase in the product development process in which a product's financial structure is created Risk appetite - Answer-The amount and type of risk that an organization is prepared to seek in the pursuit of profits or other strategic objectives First Mover Strategy - Answer-A company attempts to be the first to enter a new market or the first to enter a current market with an innovative product Fast follower strategy - Answer-A company quickly imitates and improves a competitor's innovation or is the first to introduce a similar product into an expanded market Bid data - Answer-A large amount of info gathered from various sources in various formats and at a rapid speed Actuarial control cycle - Answer-Define the need Design the solution Monitor the results Insurance actuaries - Answer-Build models and projections to design insurance products Risk actuaries - Answer-Specialize in risk management. Involves in a company's ERM processes Appointed actuaries - Answer-Prepare actuarial reports for insurers and review the assumptions behind proposed products Finance and investment actuaries - Answer-Work with bonds, stocks, real estate and other investments Pension actuaries - Answer-Calculate and certify the contributions needed to fund a pension plan and test the assumed valuations/models Resource and environment actuaries - Answer-Study the effects of various environmental risks, such as climate change on the financial and business world and then help develop appropriate responses Actuarial opinion and memorandum (AOM) - Answer-A formal asset liability management report, consisted of two documents: Actuarial opinion Actuarial memorandum Actuarial opinion - Answer-Brief and simply states that the company's reserves are adequate for the anticipated cash flows arising from the insurer's contractual obligations, given the assets supporting them. All insurers must submit an actuarial opinion to regulatory authorities with their Annual Statement Actuarial memorandum - Answer-A lengthy formal report containing documentation supporting the conclusion expressed in the actuarial opinion Principles based reserving (PBR) - Answer-Actuarial assumptions and reserve levels change as the economic environment and other risk factors change Statutory capital - Answer-The legal minimum standard of capital that an insurer must maintain in order to be considered solvent by regulatory authorities Rating agency capital - Answer-The minimum standard of capital that an insurer must maintain in order to receive a favorable quality rating from a specific rating agency Economic capital (internal capital) - Answer-An estimate of the amount of capital that a financial institution calculates to internally manage its own risks contingency risks (C-risks) - Answer-Four officially recognized categories of risk that regulators have identified as being crucial to an insurer's short flows and that directly affect an insurer's capital adequacy