Free Practice Questions for GAQM ISO-31000-CLA Exam

Enhanced risk management emphasizes the continual improvement of risk management capabilities1. This means that risk management is regularly reviewed and updated to ensure its relevance, adequacy, and effectiveness.

According to ISO/IEC Guide73 (2009), clause B., causes are “elements which alone or in combination have potential to give rise to risk”. Health, safety, environment, finance andchemical breakdown are examples of causes that can create risks for an organization or an individual 1. Insurance is not a cause but a method of transferring or mitigating some types of risks 1.

Risk management is a strategic management process2. Risk management helps organizations to align their objectives, strategies, and actions with their external and internal environment.

according to page 15 of source 3, the development of a risk management strategy takes into account the organization's resources and internal support. These resources include factors such as human, capital, and technological resources; organizational structure, culture, and governance; communication and consultation mechanisms; and support from senior management and leadership. These inputs have an impact on the feasibility and effectiveness of the risk management strategy.

A train crash and its consequences is an example of risk aggregation, which is the combined effect of multiple risks on an organisation’s objectives3. Risk aggregation can result in losses that are greater than the sum of individual losses.

According to 3, a captive insurance company is “a wholly owned subsidiary insurer that provides risk mitigation services for its parent company or related entities”. It can act as a reinsurer by accepting risks from other insurers or captives 1. It can also access reinsurance markets to transfer some of its own risks 1. It can sometimes offer greater cover than is available in the insurance market by tailoring its policies to suit its parent’s needs 3. It does not have to be located in the same country as its parent company; in fact, many captives are domiciledoffshore for tax or regulatory reasons 4.

Risk management is a process with inputs, activities, and outcomes1. The inputs are the organization’s context and risk criteria. The activities are risk identification, analysis, evaluation, and treatment. The outcomes are improved decision making, performance, and resilience.

 Risk treatment is the risk process step to manage, control, or remediate risk1. Risk treatment involves selecting and implementing options to modify or control risks.

A review of the goals and objectives of the risk strategy is part of defining the success measures for the organization’s risk strategy1. This helps to ensure that the risk strategy aligns with the organization’s purpose, vision, mission and values.