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WorksheetsISC 2022
Total questions: 25
Worksheet time: 13mins
Which of the following is NOT the benefits of risk-based approach?
Enable a consistent supervisory intervention measures for all financial institutions
Facilitate identification of higher risk areas for effective and consistent risk assessment process
Allow efficient allocation of resources
Ensure measures to prevent and mitigate risk commensurate to the risk identified
Identify the correct order in implementing supervisory process cycle.
I. Report the supervisory assessment to the Central Bank's Management and communicate the supervisory risk assessment and issues to the FI
II. Conduct off-site monitoring and on-site reviews based on supervisory strategy
III. Perform thorough analysis to understand the institution's activities and operations and determine supervisory planning
IV. Follow-up on institution's response to each supervisory issues and update Central Bank's management of the remediation progress
V. Assess the institution's composite risk rating and assessment
II, III, I, IV and V
III, II, V, I and IV
I,III,II,V and IV
IV, I,V, II and III
What are the analysis that need to be conducted as the starting point for all supervisory activities? (Participants may choose more than one answer)
Knowledge of Business
Business Model Analysis
Stress Testing
Control Assessment
Which of the following statements are true? (Participants may choose more than one answer)
Institutional Supervisory Planning should consider the key areas which will affect the institution’s safety and soundness and financial stability
Institutional Supervisory Planning only includes planning for off-site monitoring
Examples of on-site assessment includes engagement with insurers, walkthroughs and system validation
Moderation session is held to challenge the supervisory assessment
What are the factors that would affect the inherent risk rating of a significant activity:
I. The profile of the portfolio
II. The size of the portfolio
III. The features of the products
IV. The internal controls applied
I and II
I and III
I,II and III
All of the above
Which of the following statements are TRUE? (Participants may choose more than one answer)
Supervisors will assume both the on-site and off-site roles to provide a holistic view of the institutions under their purview.
The frequency and depth of on-site reviews depends on the size, complexity and risk profile of the institution.
Off-site monitoring only involves gathering relevant information and performing analysis, without engagement with the Board and Senior Management of the Financial Institution.
All on-site activities must be full-scope reviews.
Which of the following is NOT one of the purposes of Rating Panel?
Finalise the FI's CRR for the first time
Confirm any change of CRR
Confirm numerous changes in CRR components due to economic environment
Brief Senior Management of the CRR assessment of a foreign reinsurers
Which document should supervisors use to communicate any supervisory concerns to FIs? (select all that apply)
I. Interim Supervisory Letter
II. Management Letter
III. CRR Letter
IV. Reprimand Letter
I, II and III
II and III
I, III and IV
All of the above
Which of the following is part of the review areas for Culture Assessment?
I. Tone from the Top
II. Echo from Below
III. CRR Letter
IV. Reprimand Letter
I,II and III
II and III
I, III and IV
All of the above
Which of the following best describes 'timely communication' to FIs?
CRR Letter issued 25 days after the Board Communication
Management Letter issued 60 days after the branch visit's exit meeting
Interim Supervisory Letter issued 45 days after exit meeting
Which of the following is NOT the importance of conducting Track 2 assessment?
To determine the level of reliance that supervisors could place upon the risk management control functions
A forward looking tool to assess the possibility of RMCF affecting the FI’s risk profile in the future
Understand the overall quality of RMCF over non-SA areas that would have impact on the FI
To determine the Composite Risk Rating of the FI
Based on the following information, what is the most appropriate rating for Capital?
Weak
Acceptable
Marginal
Strong
'The insurer's underwriting processes is conducted using a centralised platform with authority limit of the approver embedded into the system. Under SuRF, where should you reflect this observation?
Inherent Operational Risk
Technology Risk
Operational Management
Risk Management
Which of the following is TRUE about Risk Management Control Functions?
Outstanding claims monitoring is the responsibility of Risk Management
Operational Management is part of RMCF since it is part of the day-to-day operations
Compliance function alone has the responsibility to ensure the FI’s compliance with regulatory and legal requirements
Board has the discretion to delegate some functions to Senior Management, but the ultimate overall responsibility over the FI still lies with the Board
Business Model Analysis involves reviewing the following areas except:
Supervisory issues and recommendations
Sustainability of strategy
Business environment
Viability of business model
Ace Insurance has just obtained its insurance licence and has recently been assessed by the respective supervisors for its technology risk, culture, and composite risk rating. These ratings have yet been confirmed. At which platforms shall the supervisory ratings and assessment of Ace Insurance be moderated? (select all that apply)
CRR Briefing
CRR Briefing with AG/DG
TRA Briefing
Rating Panel
Please identify the CORRECT statement
I. Risk assessment ratings in the 'Risk Matrix' must be supported by relevant slides or review notes to capture detailed assessment and analysis
II. Risk-based supervision allows the same level or amount of supervisory attention for all financial institutions and in all aspects of operations at all times
III. Risk-based supervision facilitates the identification of higher risk areas for effective risk assessment process
IV. Risk-based supervision allows for a robust and flexible supervisory approach, with dynamic and continuous risk assessment
I and III
I and IV
I, III and IV
All of the above
Upon receiving the remediation plan from FIs to address supervisory concerns and recommendations, supervisors are expected to:
Confirm the remediation plan
Thank the FIs for their effort
Validate and challenge the plan
Conduct peer comparisons on the appropriateness of the plan
The purpose of Internal Control Questionnaire in the Manual for Examination of Insurance Institutions (the Blue Manual) is to:
Provide a checklist of what supervisors should check during on-site examination
Be the audit programme for supervisors to perform compliance checking during on-site examination
Guide supervisors in assessing adequacy of internal controls
Provide the criteria in assessing the inherent risk of the significant activities
Supervisor proposed an upgrade to CRR rating and panel agrees to the proposal. In this circumstances, which moderation type that affirms the CRR rating of the FI?
Rating Panel
TRA Briefing
No need to convene any moderation. Just issued Circular Resolution via email to Director for approval
CRR Briefing chaired by AG
Which of the following is FALSE about Reporting and Intervention stage in the Supervisory Process cycle?
I. Exit Meeting is held with Board members to communicate supervisory findings and recommendations
II. CRR Assessment does not consider the outcome from thematic reviews if the thematic reviews were conducted early in the CRR cycle as the issues will have become obsolete
III. Supervisory Letter on CRR Assessment will be addressed to Board and Senior Management for their timely remediation
IV. CRR Moderation session is intended to challenge and confirm the ratings proposed by the supervisory team
I, II and III
I, II and IV
I, III and IV
All of the above
Which types of review, upon completion, require supervisors to communicate their concerns and recommendations to the FIs? (select all that apply)
Branch audit
CRR review
Thematic review
Engagement with CEO
Please identify the CORRECT statement
SAs which are assigned with lower materiality can be key drivers of the institution's Overall Net Risk (ONR)
Direction of Net Risk' of Significant Activities (SA) can be determined solely through economic outlook of the SA
One of the components of RMCF includes Operational Management
The terms 'upgrade', 'downgrade' and 'recalibration' are not applicable for assignment of 'Direction of Net Risk'
What is the purpose of CRR Letter?
Communicate significant supervisory issues and recommendations following any supervisory review
Communicate CRR Assessment, issues and recommendations
Communicate less significant supervisory issues following any supervisory review
Communicate Issues highlighted in Interim Supervisory Letter and Management Letter
Which of the following is FALSE about SuRF?
SuRF is dynamic and forward looking
Under SuRF, the assessment of an institution is based on a thorough understanding of the institution, its industry and its environment
SuRF provides a systematic checklist template to facilitate supervisors to assess the safety and soundness of licensed financial institutions
SuRF is universally applicable across all types of institutions which BNM supervises
