ST9: CMP Upgrade 2013/14 Page 1

Subject ST9
CMP Upgrade 2013/14

CMP Upgrade

This CMP Upgrade lists all significant changes to the Core Reading and the ActEd
material since last year so that you can manually amend your 2013 study material to
make it suitable for study for the 2014 exams. It includes replacement pages and
additional pages where appropriate. Alternatively, you can buy a full replacement set of
up-to-date Course Notes at a significantly reduced price if you have previously bought
the full price Course Notes in this subject. Please see our 2014 Student Brochure for
more details.

This CMP Upgrade contains:

All changes to the Syllabus objectives, Core Reading and additional reading.
Changes to the ActEd Course Notes, Series X Assignments and Question and
Answer Bank that will make them suitable for study for the 2014 exams.

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1 Changes to the Syllabus objectives and Core Reading

1.1 Syllabus objectives

There were no changes to the ST9 syllabus.

1.2 Additional reading

The IAA Practice Note has been replaced by a new version, the IAA Note.

The content of the note is unchanged, but the new version has been reformatted and the
ActEd notes now reflect the new page references.

The old version can still be used. The new version can be downloaded from:
www.actuaries.org.uk/erm/IAA_PracticeNote_2009.pdf

1.3 Core Reading

Chapter 1

The following additional required reading has been added from the IAA Note:

Appendix 3, ERM Implementation Case Studies, pages 77 81

Chapter 3

The following additional required reading has been added from the IAA Note:

Section 6, Key Feature 5 and 6.1, page 39

Section 8, Key Feature 7 only, page 57

The following Core Reading has been inserted in Section 3:

Under Pillar 2 of Solvency II, each insurance company will be required to carry
out an Own Risk and Solvency Assessment (ORSA).

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The ORSA requires each insurer:

to identify the risks to which it is exposed,
to identify the risk management processes and controls in place, and
to quantify its ongoing ability to continue to meet its solvency capital
requirements (both MCR and SCR)

Own Risk and Solvency Assessments have also been introduced in other
jurisdictions, including the USA.

Chapter 5

The following reading from the IAA Note (previously optional reading) is now required
reading:

Appendix 6, Topics and structure of a typical risk management policy, pages 87 90

Chapter 9

In Section 2, a new risk is added to the Core Reading list of risks:

The phrase conduct risk is sometimes used to encompass those risks that relate
directly to the relationship between a company and its customers. It can
therefore encompass elements such as operational failures (eg poor control of
distribution and/or servicing), information asymmetries, keeping pace with
regulatory requirements and customer needs, market conditions, product
development activities and strategic objectives.

Chapter 28

The following term has been added to the list of principal terms:

Own Risk and Solvency Assessment (ORSA)

The Own Risk and Solvency Assessment (ORSA) is part of the proposed
Solvency II framework, with similar versions having been introduced in other
jurisdictions, including the USA. The ORSA requires each insurer to identify all
the risks to which it is exposed, to identify the risk management processes and
controls in place, and to quantify its ongoing ability to continue to meet its
solvency capital requirements.

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2 Changes to the ActEd Course

Chapter 3

References to the FSA have been updated throughout the CMP to reflect the change in
UK regulators:

FCA and PRA

The Financial Conduct Authority (FCA) regulates the financial services industry in the
UK. Their aim is to protect consumers, ensure the industry remains stable and promote
healthy competition between financial services providers.

The Prudential Regulation Authority (PRA) is a part of the Bank of England and is
responsible for the prudential regulation and supervision of banks, building societies,
credit unions, insurers and major investment firms. It sets standards and supervises
financial institutions at the level of the individual firm.

Chapter 13

On page 17, the formula for the squared GARCH process has been corrected to read:

max( p ,q ) q
X t2 0
i i X t2i jVt j Vt
i 1 j 1

Q&A Bank

No material changes have been made to the questions or solutions contained in the 2013
Q&A Bank.

X Assignments

No material changes have been made to the X Assignments.

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3 Other tuition services

In addition to this CMP Upgrade you might find the following services helpful with
your study.

3.1 Study Material

We offer the following study material in Subject ST9:

Mock Exam and Additional Mock Pack
Flashcards
ASET (ActEd Solutions with Exam Technique) and Mini-ASET.

For further details on ActEds study materials, please refer to the 2014 Student
Brochure, which is available from the ActEd website at www.acted.co.uk.

3.2 Tutorials

We offer the following tutorials in Subject ST9:

a set of Regular Tutorials (lasting three full days)
a Block Tutorial (lasting three full days)
online Tutorials.

For further details on ActEds tutorials, please refer to our latest Tuition Bulletin, which
is available from the ActEd website at www.acted.co.uk.

3.3 Marking

You can have your attempts at any of our assignments or mock exams marked by
ActEd. When marking your scripts, we aim to provide specific advice to improve your
chances of success in the exam and to return your scripts as quickly as possible.

For further details on ActEds marking services, please refer to the 2014 Student
Brochure, which is available from the ActEd website at www.acted.co.uk.

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4 Feedback on the study material

ActEd is always pleased to get feedback from students about any aspect of our study
programmes. Please let us know if you have any specific comments (eg about certain
sections of the notes or particular questions) or general suggestions about how we can
improve the study material. We will incorporate as many of your suggestions as we can
when we update the course material each year.

If you have any comments on this course please send them by email to ST9@bpp.com
or by fax to 01235 550085.

IFE: 2014 Examinations The Actuarial Education Company