Actuarial Notes

IAA Risk Book: Materiality, Proportionality and Similar Terms

By Ralph Blanchard · International Actuarial Association · 2023

Study guide: Exam GI-201

A chapter of the IAA Risk Book, developed and approved by the Insurance Regulation Committee of the International Actuarial Association (version 2.0, April 2023). It addresses the concepts of proportionality, materiality, cost-benefit and risk-focused, which allow exceptions to set templates and processes, by outlining their current definitions and discussing issues with their use and possible pitfalls.

On the syllabus

Introducing the IAA Risk Book

1 Introduction

2 Proportionality

  • 2.1 Definition
  • 2.2 Discussion
  • 2.3 Potential Pitfalls

3 Materiality

  • 3.1 Definition
  • 3.2 Discussion
  • 3.3 Potential Pitfalls

4 Cost-Benefit

  • 4.1 Definition
  • 4.2 Discussion
  • 4.3 Potential Pitfalls

5 Risk-Focused (and Risk-Based)

  • 5.1 Definition
  • 5.2 Discussion
  • 5.3 Potential Pitfalls

6 Commonalities and Differences

7 Concluding Comments

Sources