MDI-02 INSURANCE BUSINESS ENVIRONMENT

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1 MDI MDI-02 INSURANCE BUSINESS ENVIRONMENT SYLLABUS

2 Syllabus MDI-02: INSURANCE BUSINESS ENVIRONMENT The objective of this module is to place the student s insurance knowledge in the context of the wider business environment. This module is designed to address the topics of the structure and management of and functions within an insurance business, corporate governance and accounting practices and financial analysis relevant to insurance organisations. On completion of this module, students should be able to: outline the structure and management of insurance businesses. apply the main aspects of corporate governance. explain the common functions within insurance organisations. demonstrate the main accounting principles and the practices of insurance company accounts. use financial ratios to assess businesses and their financial strength. METHOD OF ASSESSMENT A 3-hour examination that involves 20 compulsory short answer questions. KNOWLEDGE RATING GUIDE In relation to the syllabus below and the knowledge rating guide; learning outcomes which are categorised as K, U or A. Learning outcomes categorised as K are knowledge-based and indicate that students are required to recall factual information. Learning outcomes which are categorised as U are understanding-based and indicate that students are required to link pieces of information together in a cause-and-effect relationship. Learning outcomes which are categorised as A are Application or Analysis-based and indicate that students are required to apply their knowledge and/or understanding to a given set of circumstances or analyse the knowledge / understanding. Assessment of any topic from this module in the examination will be based on these knowledge ratings. IMPORTANT NOTES Candidates should note that the examination will test the module syllabus alone. The syllabus will be based on Irish law and practice. The examination sessions will test the legal position as of March FEEDBACK If you have any comments on this module, its syllabus or the material contained therein, The Insurance Institute of Ireland would appreciate your feedback. Please contact us on studentservices@iii.ie The Insurance Institute of Ireland 2014

relevant to insurance organisations. On completion of this module, students should be able to: outline the structure and management of insurance businesses.

3 MDI-02 INSURANCE BUSINESS ENVIRONMENT SYLLABUS CHAPTER 1: STRUCTURE OF THE INSURANCE INDUSTRY A C Describe the different types of insurance company (including Lloyd s), the U distribution channels used to transact insurance business and the operation of the international insurance market. D & E Explain the importance of the customer, the different types of stakeholders U and their interests in the business. F & G Analyse structural trends and industry factors (including company growth, A mergers, acquisitions and outsourcing). CHAPTER 2: MANAGEMENT OF INSURANCE BUSINESSES ROLES AND RESPONSIBILITIES A & B Describe the role and responsibilities of the Board of Directors and senior U executive officers in running businesses. C & D Describe the key roles and responsibilities of the manager, supervisor and U non-managerial staff. CHAPTER 3: MANAGEMENT OF INSURANCE BUSINESSES PLANNING AND CONTROL A & B Explain the importance of business planning and the role of budgetary planning U and control. C & D Outline the decision making process and explain the importance and use of U & K management information and management reporting. CHAPTER 4: MAIN ASPECTS OF CORPORATE GOVERNANCE A Describe the corporate governance framework applicable to Insurers in Ireland. U B Describe the process of incorporating a business and explain the purpose and U contents of the Memorandum and Articles of Association. C Explain the purpose and structure of the annual report and accounts. U D Describe the three lines of defence principle operational management, risk U management and audit. E1 State the importance of accurate record keeping and reporting to fulfil regulatory U requirements and best practice. E2 4 Explain the importance of the management and protection of confidential data. K

D & E Explain the importance of the customer, the different types of stakeholders U and their interests in the business.

4 CHAPTER 5: COMMON FUNCTIONS WITHIN INSURANCE ORGANISATIONS A & B Explain the role and significance of the common functions within the U insurance business including strategy and planning, underwriting (including delegated authority), claims, risk management, compliance, actuarial, solvency and capital modelling, marketing, investment, legal /regulatory, finance, IT, internal audit, HR and facilities management. CHAPTER 6: ACCOUNTING PRINCIPLES AND PRACTICES A & B Explain the purpose and function of financial accounting and distinguish U between it and management accounting. C Describe the users of financial information and their information requirements. U D & E Explain and apply the basic financial concepts and the accounting equation U & A (including receipts and payments). F I Outline the construction of and interpret a balance sheet and a profit and loss U account and insurance intermediary accounts and insurance company accounts. J Explain the uses, format and presentation of cash flow statements. U K Explain the principles of management accounting. U L Interpret management accounts. A CHAPTER 7: ACCOUNTING STANDARDS AND INSURANCE COMPANY ACCOUNTS A C Explain and outline the main accounting standards that affect insurance U company accounts. CHAPTER 8: : CLAIMS RESERVING A Explain the importance of accurate reserving. U B Define incurred but not reported (IBNR) and outline its role in and impact on K & U insurance company accounts. C Explain the reserving methods used by insurance companies. U

and facilities management. CHAPTER 6: ACCOUNTING PRINCIPLES AND PRACTICES A & B Explain the purpose and function of financial accounting and distinguish U between it and management accounting.

5 CHAPTER 9: FINANCIAL RATIOS A Explain the general financial ratios and their uses and benefits (including U & A profitability, productivity, liquidity, activity and gearing ratios) and interpret accounts using these ratios. B & C Explain the insurance ratios and their uses and benefits (including security, U & A solvency, liquidity, profitability and claims ratios) and interpret insurance company accounts using these ratios. CHAPTER 10: FINANCIAL STRENGTH OF INSURANCE COMPANIES A Explain the role of rating agencies and the rating process used to determine U the financial strength of insurance companies. B Outline the regulatory solvency requirements (including the impact of the EU U Solvency Directives and the Central Bank of Ireland s requirements in this regard) and the means by which these instruments assess the financial strength of insurance companies.

B & C Explain the insurance ratios and their uses and benefits (including security, U & A solvency, liquidity, profitability and claims ratios) and interpret insurance company CHAPTER 10: FINANCIAL

MDI-05 LIABILITY INSURANCE. With reference to Irish law and practice

MDI-05 LIABILITY INSURANCE. With reference to Irish law and practice MDI-05 LIABILITY INSURANCE With reference to Irish law and practice SYLLABUS 2015 10 LIABILITY INSURANCE On completion of this MDI-05 module, students should be able to: Outline the nature of the civil