Management accounts enable an insurer to manage its key operations. How are these LEAST likely to be used by an insurer?
To determine asset valuations.
What is the difference between hard and soft leakage?
Hard leakage is easier to identify.
The FCA regulates the conduct of all authorised firms and supervises firms based on a:
three pillar system.
Who has an overall responsibility for controlling costs for motor engineers, loss adjusters and solicitors?
Claims manager.
What does a profit and loss account show?
Transactions carried out by a company during the financial year.
What does the balance sheet of an insurance company show
The assets and liabilities of the company.
Who has day-to-day control for the management of the claims process and strategy within an insurer?
The claims manager.
What does a claims manager consider when measuring leakage?
What was actually paid and what should have been paid.
When supervising authorised firms, the FCA’s supervision:
varies depending on the level of risk of each firm.
Under the Financial Services Act 2012, which body is responsible for regulating the market conduct of authorised firms?
The FCA.
The three operational areas that a claims manager will typically be responsible for are:
strategy, cost, staff.
Which Act requires the PRA to consider financial stability in its regulation of authorised persons?
The Financial Services Act 2012.
When dealing with claims, an insurer will look to minimise its costs. It will achieve this by:
minimising its leakage levels.
In the context of managing the claims process, what is leakage?
An overspend in settlement of a claim that can be avoided.
When determining a strategy for its claims management, senior management will want to focus on:
clear claims procedures, including reserving practices.
An authorised firm is looking to grow its business aggressively. If this was considered to be a high risk by the FCA, under which part of the FCA’s ‘three pillar’ system would this be identified?
The Firm Systematic Framework.
Which department of an insurance company has the largest outflow of money?
Claims department.
The terms of which Act require a company to produce annual accounts?
The Companies Act 1985.
