Organisation : Actuarial Society of South Africa
Exam : F103 Exam
Document Type : Sample Question Paper
Category or Subject : General Insurance Fellowship Principles
Website : http://www.actuarialsociety.org.za/StudentZone/PastExamPapers/F103GeneralInsuranceFellowshipPrinciples.aspx
Download Model Question Paper :
F103 June 2016 : https://www.southafricain.com/uploads/2678-F103-June2016.pdf
F103 November 2015 : https://www.southafricain.com/uploads/2678-F103Nov2015.pdf
103 May 2015 : https://www.southafricain.com/uploads/2678-F103May2015.pdf
Actuarial General Insurance Principles Question Paper
Time allowed : 3 hours
Instructions To The Candidate
1. Enter all the candidate and examination details as requested on the front of EACH OF your answer booklets.
Related : Actuarial Society Insurance Fellowship Principles Sample Question Paper : www.southafricain.com/2181.html
2. You have 15 minutes at the start of the examination in which to read the questions. You are strongly encouraged to use this time for reading only, but notes may be made. You then have three hours to complete the paper.
3. You must not start writing your answers in the booklet until instructed to do so by the supervisor.
4. Mark allocations are shown in brackets.
5. Attempt all seven (7) questions, beginning your answer to each question IN A SEPARATE BOOKLET.
6. Candidates should show calculations where this is appropriate.
Sample Questions
Question 1
i. In the context of reinsurance define what is meant by a “working layer” and outline briefly any type(s) of reinsurance commission which may be paid to a direct writer with such cover. [3]
D&A is a general insurer which has reinsurance treaties which operate in the order given below :
** 25% Quota Share treaty with Reinsurer A.
** Surplus with Reinsurer B, which has the following conditions:
** A maximum of 4 lines of cover.
** A maximum retention limit of $50m.
** D&A must retain at least $10m on each risk reinsured.
** Risk Excess of Loss with Reinsurer C, providing cover of $5m in excess of $2m.
ii. Determine the amounts (a) – (g) in the above table. [8]
Question 2 :
You are the actuary for a large established insurance company selling commercial comprehensive motor insurance policies covering property damage and third party liability. The company has a large database of its individual claims data, as well as relevant exposure measures, for the past 20 years.
You have been asked to investigate different excess of loss reinsurance structures on the book of business which must include a stability clause, aggregate deductible and a per occurrence limit.
i. Define “stability clause”, “aggregate deductible” and “per-occurrence limit” and explain the effect that each will have on the expected cost of claims to an excess of loss layer. [5]
ii. Outline briefly how you could use a frequency-severity simulation model to estimate the next three years’ reinsurance risk premium under different reinsurance structures using the information from the company’s database. [8]
Question 3 :
A large corporate insurer provides an insurance licence to a number of underwriting managing agents in exchange for a management fee. Due to changes to the regulatory framework the insurance company now has to collect and store all of the details of the agents’ individual policyholders as well as detailed claims information on a monthly basis. Previously only summary (bordereau) information was collected for financial reporting purposes.
i. Describe the potential difficulties that the insurer faces in collecting the data on the new collections basis, given that each agent operates as a separate entity. [6]