SA3 Exam October 2009

[calstate]

I guess we can post now.

So how was it?

Unfortuntely I did not have a copy of the Insurance Law Handbook to study from, which would have helped with the solicitors' PI material on question 2, and also with the regulatory aspects on takeovers on question 1.

The only easy part was the claculation on the lottery question.

Better start preparing for April 2010.

 

[obri600]

The only easy part was the claculation on the lottery question.

Really?! How did you calculate the likelihood of matching 4 out of 5 numbers?

Overall I thought this was a much harder paper compared with last couple of sittings, particularly question 1. They didn't give you much of a steer for Q1 (i) on risks and issues for takeover of managing agency and I struggled with regulation aspects in the later parts. I struggled to generate enough relevant points for this question.

Also, I haven't come across contingency business or prize indemnity insurance before.

 

[calstate]

Lottery

For all 5 the number of ways is 50C5 - number of combinations of 5 from 50. order not important =2,118,760. So probability of top prize is 1/2,118,760

For 4 from 5.

Out of the 2,118,760 outcomes, there are:

5 ways of choosing any 4 from 5. We still need a fifth number. We have 46 numbers left but it can not be the number that will give you the top prize, so we have 45 (non-winning)numbers to fill the fifth spot. That is 5 * 45 ways of the 2,118,760. Probability is 225/2,118,760.

Then multiply first and second probabilities by 100,000 and 1,000 respectivley to get the expected losses.

Finally divide out by the amount of "premium" net of coverholder commission.

I hope this was right.

Totally agree with not given enough direction on questions worth high marks. Also agree did not know about takeover legislation.

 

[mnemonic]

Agree it was a difficult exam. I think the regulation for combined managing agency was all to do with chapter 6, and approved persons, meeting capital requirements, filing returns etc. Unfortunately I didn't think about any of this until after the exam. I also forgot to define ICA for Q2 in terms of confidence of 99.5%! Probably crucial.

Overall I thought there was a lot of time pressure and I didn't have enough time to finish the paper.

I can't actually remember a lot of it, when do they come up on the website?

I'm worried about having to redo it (which I am 99.5% confident of - sorry I can only inject humour now) as there's all the new syllabus coming in.

 

[mnemonic]

So paper's out on the website...yes I remember it now. 22 marks for the first part of Q1 - "any specific aspects that could materially impact these risks" kinda got me.

Had no idea what contingency insurance was.

Rest of the questions rubbish for me, expect features of prof ind insurance, which was fine....

Q2 part ii, I only concentrated on the issues they mentioned rather than general differences between each - did anyone else interpret it this way?

Part iii was difficult to generate enough points. Forgot all about CRR.

 

[calstate]

I would not worry about the 99.5%. They have asked this question before and is in fact on the mock exam for 2010 and they did not mention it. The solution was general and they did not want any calculations.

Q2 part ii) I considered the method of calculationg each of the reserves and then looked at aspects that would cause them to be different.

Q2 part iii) Still not sure as to what they were after. The preamble mentioned capitalisation and then the question was asking for capital requirements.........

The questions were too open ended, but as usual there is a specific answer that the examiners are looking for. I think they come up with an answer and then frame a question around it. Oftentimes, they perhaps don't realise that the question thay have framed has different reasonable approaches that can be made.

 

[calstate]

As far as the question including regulatory aspects, I too thought about "fit and proper persons" etc but thought that as managing agents they would have already known the requirements and I focused on the actual takeover options, e.g. tender, buying shares on the open market.

It is fitting that this exam had a lottery question on it.

 

[clutch]

aah, the plight of us poor students who ARE NOT IN THE UK MARKET!!!

All those questions on Lloyds managing agencies - come on, I don't deal with this everyday And why call it a "solicitor" when it is basically a "lawyer" everywhere else in the world. (I luckily knew that, not that it really matters).

I know some stuff about capital modelling in my country (not even in Europe) so I could generate some ideas around ICA/ICG, but they are fairly generic relating to modeling issues of the various risks.

All in all, pretty sure I died. Can't understand why it feels so out of line with the other SA's sometimes. It feels as if people write SA2 and pass all the time. But SA3? Some people with 8 years experience write it 10 times and yet you get 24yr olds passing it first attempt? Is the scope that wide?

Anybody know what a range for pass % for a SA may be?

 

[avanbuiten]

Anybody know what a range for pass % for a SA may be?

40-50%

 

[Grizzly]

The questions were too open ended, but as usual there is a specific answer that the examiners are looking for. I think they come up with an answer and then frame a question around it.

Totally agree. I came out of the exam confident, but now reading the messages i'm not so sure. So easy to write a correct answer to the wrong question!

Attempt 6 at SA3.... do you reckon examiners take pity on a student getting several succesive FA's? Maybe doing another SA exam is an easy way round this!!

So anyone figure out whats contingency business?

 

[Grizzly]

aah, the plight of us poor students who ARE NOT IN THE UK MARKET!!!

All those questions on Lloyds managing agencies - come on, I don't deal with this everyday

i don't think that matters, very few UK GI students work in Lloyd's. And almost no actuaries get involved with Solicitor's PI in any debth!

 

[calstate]

Totally agree. I came out of the exam confident, but now reading the messages i'm not so sure. So easy to write a correct answer to the wrong question!

All business is contingent on some event occurring or not occuring. Since this question was to do with Lloyd's I assumed it was the special one off, unusual risks, that have a low chance of claim being made but high severity if they do occur, that Lloyd's are known for.

Why are the solutions not posted yet? Surely it is not because they are waiting to put in a couple of paragraphs here and there saying "most students scorred poorly on this question". Once we see the solutions we will know if we scored poorly or not. They can put these comments in at a later time to help students that are using the exam papers to prepare for future SA3 papers.

I am very frustrated.

 

[mnemonic]

calstate, if you came out of the exam confident then try and hang on to that - we can't change what we wrote and can only wait. but hopefully you have done well and your original assessment was correct!

i think they don't put the answers up on the internet until the results are out - they used to put them before but not sure why they don't do it anymore.

these forums have very different views, and i think it's really good that people can express how they feel about how they've done, what they think about the paper etc, you just have to remember that everyone will see things differently. when i first started reading the paper, i thought it seemed quite straightforward but the more i delved into it and started answering, i realised i had misinterpreted things that's why i found it difficult. there were a couple of questions where i thought there were too many marks and not enough points to think of under exam conditions.

try to make the most of the time before the next study session (but hopefully you won't be doing any more study for SA3!!!) good luck.

 

[fiend]

It was a pretty typical sa3 exam. I think I did well on the second question but no idea if I got enough points, in total or relevant ones, for the big two parts of question one.

Good luck to everyone. I really don't want to sit any more exams now!!!

 

[calstate]

I just checked for the date our examination results are published.

Two days before Christmas.

Is that really bad timing?