FCIP F560 study guide
FCIP F560 · Work through your exam, one topic at a time.
FCIP F560 is one of the fellowship-level examinations in the insurance professional designation track, aimed at people who already understand day-to-day insurance operations and now need to think like the managers and officers who run an insurer. Candidates typically include underwriters, claims specialists, accountants, actuaries in training, and operations supervisors moving toward leadership roles, as well as reinsurance and broking staff who need to read an insurer from the inside. The FCIP F560 study guide has 9 sections and about 2,960 words.
01Insurance Operations and Organizational Structure
Every insurer, whatever its legal form, runs a set of interlocking functions: product development, marketing and distribution, underwriting, policy administration, claims, actuarial, finance and accounting, investment, reinsurance, legal/compliance, and internal audit. The classic way to test this domain is to ask which function owns a decision.
380 words, about 2 min02Underwriting and Risk Selection
Underwriting answers three questions: is this risk acceptable, on what terms, and at what price? The flow runs from submission and information gathering through evaluation against guidelines, classification, pricing, and finally acceptance, modification (exclusions, deductibles, sublimits), or declination.
351 words, about 2 min03Claims Handling and Loss Adjustment
Claims handling moves through notice/first report, verification of coverage, investigation, damage evaluation, negotiation, settlement or denial, payment, and subrogation or salvage recovery. The adjuster's first duty is coverage analysis: policy in force, insured and claimant status, covered peril, exclusions, conditions (notice, proof of loss, cooperation), and limits or deductibles.
312 words, about 2 min04Reinsurance and Risk Transfer
Reinsurers supply capacity, surplus relief, catastrophe protection, and underwriting expertise, and they stabilize results by smoothing large or volatile losses. The ceding company retains a retention and transfers the excess.
315 words, about 2 min05Financial Statements, Accounting, and Reporting
Insurers report a balance sheet, income statement, and cash flow statement, plus statutory filings. The statutory balance sheet is conservative: admitted assets exclude items of low liquidity or doubtful collectibility, and liabilities include unearned premium reserves and loss reserves.
323 words, about 2 min06Ratemaking, Loss Reserving, and Actuarial Concepts
Rates must be adequate, not excessive, and not unfairly discriminatory. The pure premium method builds a rate from loss cost plus a loading for expenses, profit, and contingencies; the loss ratio method adjusts current rates by the ratio of actual to expected loss ratios.
320 words, about 2 min07Insurance Regulation and Compliance
Insurance is regulated primarily by the states, coordinated through the NAIC, which develops model laws, the annual statement blanks, and the risk-based capital formula. The McCarran-Ferguson Act preserves state primacy, though federal antitrust and other laws apply where states do not regulate.
307 words, about 2 min08Strategic Management, Leadership, and Ethics
Strategy links mission, risk appetite, and resource allocation. Tools a candidate should recognize include SWOT analysis, Porter's five forces, value chain analysis, and the growth-share matrix.
320 words, about 2 min09Enterprise Risk Management and Capital Management
ERM identifies, assesses, prioritizes, and manages risks across the enterprise. The COSO framework organizes this around governance and culture, strategy and objective-setting, performance, review and revision, and information, communication, and reporting.
332 words, about 2 min