CAS Exam 6C Fall 2018, Question 22
Study guide: Exam 6C
A property and casualty insurance company has recently started writing an overland flood insurance coverage for personal property. The management of the company designs a stress testing program.
Part a (0.5 points)
Explain how stress testing can be a key risk management tool for the insurance company's flood program.
Part b (0.5 points)
Briefly describe two responsibilities of senior management in a property and casualty insurance company's stress testing program.
Part c (1.5 points)
With respect to a stress testing program:
- i. Identify two areas of focus when designing the program.
- ii. Briefly describe each area identified in part i. above.
- iii. For each area of focus identified in part i. above, provide an example of how it applies to flood insurance.
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