LFMU syllabus changes for 2020

The new LFMU syllabus is now available on the SOA’s new LFM page. As we saw this year with LPM and LAM, the changes are pretty significant. However, I would rate the changes as slightly less drastic than LPM and certainly less drastic than LAM, which essentially involved a total replacement of LRM. 

In this blog post, I’ve detailed the changes into 3 main categories:

  1. New readings — these are readings that are totally new to LFM, although a handful were previously on other exam syllabi
  2. Retained readings — these are readings that were also on the previous 2019 LFVU syllabus, but some were modified
  3. Dropped readings — these are readings that were on the 2019 LFVU syllabus but did not get retained at all on LFMU

The good news is that virtually all of the pre-existing US statutory material in the SVILAC book was retained. We’ve also been working already on some of the new SVILAC volume 2 chapters that were added. Therefore, all of the very first section (A) in our online course will be ready very quickly in November. If you are ready to start now, this will give you a lot of material to work with as we “repave” the road ahead of you.

I will post more details on what to expect with our course updates in the coming days, so please stay tuned to this blog and let me know if you have any questions. 

New readings (about 900 pages)

The new LFM syllabus lists page ranges for many readings. We are showing the page range in parentheses for each below. “All” simply means the entire reading is on syllabus. Please be aware that the study notes sold by the SOA and also the published references linked to on the syllabus will contain the entire paper for each, so it’s very important to be aware of the on-syllabus page ranges so you don’t study off-syllabus material. We will provide more page range guidance in our detailed study manual and course materials to help you navigate the many page ranges within the readings.

  • Impacts of AG 48, Financial Reporter, Dec 2015 (All)
  • New chapters added from the SVILAC book (these all come from volume 2, which is a separate book from SVILAC volume 1)
    • Ch. 23: PBR for Life Products (Excluding 23.1)
    • Ch. 24: PBR for Variable Annuities (All)
    • Ch. 29 Risk-Based Capital (All)
  • Interactive Principle-Based Reserves Model (All)
  • LFM-844-20: Life Principle-Based Reserves Under VM-20, AAA Practice Note (required questions are listed on the first page of this study note)
  • PBA Corner, Financial Reporter, Jun 2016 (All)
  • Reporting and Disclosure Requirements Under VM-31: Reporting Requirements for Business Subject to PBR Financial Reporter, Sep 2017 (All)
  • LFM-841-20: A Closer Look at How Insurers Will Have to Change their Accounting and Disclosures for Long-Duration Contracts, E&Y, Nov 2018 (All)
  • LFM-142-20: In Depth – Detailing the New Accounting for Long-Duration Contracts of Insurers (All)
  • Targeted Improvements Interactive Model (All)
  • GAAP Ch. 18: Other Topics: Deferred Taxes and Fair Value Reporting (Excluding 18.2, 18.4 & 18.6)
  • LFM-840-20: A Comprehensive Guide – Derivatives and Hedging, E&Y, 2019 (Sections 1.1-1.7, 3.1-3.3, 4.1-4.3, 9.1-9.5, Appendices A and C1.1-1.4)
  • LFM-810-20 Practice Note on FAS 157 and 159 (Questions 1-12 & 27-29)
  • GAAP Ch. 15: Accounting for Business Combinations (Exclude 15.7.3-15.7.8 & 15.10.5-15.15)
  • LFM-846-20: Company Tax – Introductory Study Note (All)
  • LFM-845-20: LIME Ch. 1 and 2 (All)
  • LFM-801-20: NAIC Standard Non-forfeiture Law for Life Insurances (Sections 1-4, 5c, 6-9)
  • LFM-842-20: NAIC Standard Non-forfeiture Law for Individual Deferred Annuities (All)
  • LFM-843-20: NAIC Life Insurance Illustrations Model Regulation (All)
  • Economic Capital for Life Insurance Companies, SOA Research Paper, Oct 2016 (excluding sections 5 & 7)
  • Economic Capital A Case Study to Analyze Longevity Risk, Risk & Rewards, Aug 2010 (All)
  • LFM-148-20: The Theory of Risk Capital in Financial Firms (All)
  • LFM-144-20: The Modernization of Insurance Company Solvency Regulation in the US (Excluding sections 7 & 9)
  • Tailoring Global Capital Standards, The Actuary, 2017 (All)
  • LFM-847-20: Life Insurance Regulatory Framework, OSFI, 2012 (All)
  • Understanding VM-20 Results, 2017 (excluding Section 4)
  • LFM-146-20: The Next Chapter – Creating an understanding of Special Purpose Vehicles (All)
  • LFM-147-20: A.M. Best’s – Compendium of Publications (All)

Retained readings (about 870 pages)

The following readings were retained and NOT modified in any way:

  • SVILAC Ch. 1 (Exclude 1.1-1.9)
  • SVILAC Ch. 2 (Section 2.2)
  • SVILAC Ch. 3: NAIC Annual Statement (All)
  • SVILAC Ch. 4: Standard Valuation Law (All)
  • SVILAC Ch. 5: The Valuation Manual (All)
  • SVILAC Ch. 10: Valuation Assumptions (Excluding 10.1.3 & 10.3.8)
  • SVILAC Ch. 11: Valuation Methodologies (Excluding 11.3.9-11.3.11)
  • SVILAC Ch. 12: Whole Life (All)
  • SVILAC Ch. 13: Term Life Insurance (All)
  • SVILAC Ch. 14: Universal Life (Excluding 14.4.8,14.4.9,14.5.0 & 14.6.2-14.6.6)
  • SVILAC Ch. 18: Fixed Deferred Annuities (Excluding 18.7.4 & 18.8)
  • SVILAC Ch. 20: Indexed Deferred Annuities (All)
  • SVILAC Ch. 21: Immediate Annuities (All)
  • SVILAC Ch. 22: Miscellaneous Reserves (Excluding 22.3-22.4)
  • LFM-822-16: Study Note on Actuarial Guidelines AG 38 and 48 (excluding pp. 6-8)
  • LFM-145-20: Global Insurance Regulatory Issues: Implications for U.S. Policy and Regulation (Excluding pp. 20-29)
    • Only the study note ID changed (was previously LFV-828). No content changes.
  • LFM-800-07: Ch 8 (pp. 12-16)
  • ASOP 52 – Principle-Based Reserves for Life Products under the NAIC Valuation Manual on PBR for Life Products (Section 3)
  • LFM-800-07 Ch 12 (pp.1-15 & 32-33)
  • LFM-832 & LFM-836: AG 49 (IUL Illustrations) (All)
  • LFM-813-13: U.S. Insurance Regulation Solvency Framework and Current Topics (All)
  • A Multi-Stakeholder Approach to Capital Adequacy, Conning Research, Actuarial Practice Forum (All)
  • LFM-136-16: Chapter 11 of Life Insurance Products and Finance, Atkinson & Dallas (pp. 499-502)
  • LFM-141-18: IFRS 17 Insurance Contracts – IFRS Standards Effects Analysis (sections 1, 2, 4 & 6.1-2 only)
  • Embedded Value: Practice and Theory, Actuarial Practice Forum, Mar 2009 (All)
  • LFM-106-07: Chapter 4 of Insurance Industry Mergers & Acquisitions (sections 4.1-4.6)
  • LFM-137-16: EVARAROC vs MCEV Earnings – A Unification Approach, Kraus, 2011 (All)
  • LFM-138-16: Prudential Financial Stockholder’s Equity and Operating Leverage, HBR, 2008 (All)
  • Model Audit Rule, American Academy of Actuaries Practice Note, 2010 (All)

All of the SVILAC and GAAP book modifications shown below involved reductions to the page ranges that were the previous LFV syllabus. In particular, the GAAP book reductions were very significant as the exam committee is trying to remove content that will become obsolete under Targeted Improvements. We will provide more guidance on navigating through these chapters in our detailed study manual and other course materials.

  • SVILAC Ch. 16: Indexed Universal Life (Exclude 16.4.2-16.4.3)
  • SVILAC Ch. 19: Variable Deferred Annuities (Excluding 19.4)
  • GAAP Ch. 3: Expenses and Capitalization (Excluding 3.7.3, 3.11.4.5 & 3.12)
  • GAAP Ch. 4: Traditional Life Insurance (Exclude 4.4-4.14)
  • GAAP Ch. 6: Universal Life Insurance (Excluding 6.7-6.7.1.6, 6.7.3-6.7.6.3 & 6.10-6.13.2)
  • GAAP Ch. 7: Deferred Annuities (Excluding 7.4.1d, 7.6, 7.8, 7.10 & 7.11)
  • GAAP Ch. 9: Annuities in Payment Status (Excluding 9.5)
  • GAAP Ch. 17: Reinsurance (Sections 17.4-17.6 excluding 17.5.1, 17.6.1, 17.6.3.4 & 17.6.3.5)
  • GAAP Ch. 13: Investment Accounting (Excluding 13.7 & 13.12)
  • LFM-143-20: Fundamentals of the Principle-Based Approach to Statutory Reserves for Life Insurance, Jul 2019 (All)
    • This replaces LFV-833-18 on the previous syllabus and also has updated content

Dropped readings (about 1070 pages)

  • ULSG AG 38 Valuation Research Report
  • LFV-812: A Discussion of AG 43 for VAs
  • LFV-831: AG 43 for VAs
  • Determining Margins for Uncertainty Under a Principle-Based Framework
  • LFV-829 Ch. 2 and 7
  • Negative GAAP Term Insurance Reserves
  • GAAP Ch. 8
  • GAAP Ch. 14
  • LFV-819: Derivative Accounting and Hedging
  • LFV-100: SFAS 133
  • An Approach for Measurement of the FV of Insurance Contracts
  • Fair Value Accounting: Trouble-Maker or Life-Saver?
  • ASOP 10
  • LFV-821: Insurance Contract Modifications or Exchanges
  • LFV-835 & LFV-839: Targeted Improvements to Long-Duration Contracts
  • LFV-837: Proposed Changes to US GAAP
  • LFV-825: The long and winding road
  • Tiller reinsurance textbook (all chapters dropped)
  • LFV-827: Financial Reinsurance to Address GAAP Earnings Volatility
  • ASOP 11
  • Strategic Management of Life Insurance Company Surplus
  • LFV-818: Introduction to Source of Earnings Analysis
  • LFV-815: Swiss Re: Understanding Profitability in Life Insurance
  • Stochastic Analysis of Long-Term Contracts
  • Economic Capital for Life Insurance Companies, 2008
  • LFV-807: Market Value Margins
  • LFV-133: Cluster Analysis: A Spatial Approach to Actuarial Modeling
  • Model Efficiency Study Results
  • LFV-820 Transamerica Term Life – Understanding Post-Level Experience
  • LFV-804: The NAIC AOMR
  • LFV-816: Swiss Re: Regulatory Issues in Insurance
  • LFV-834: Regulatory Capital Considerations for U.S. Life Insurance
  • LFV-823: ORSA Guidance Manual
  • LFV-828: Global Insurance Regulatory Issues
  • ASOP 41
  • LFV-102: Actuarial Review of Reserves
  • Actuarial Aspects of SOX
  • Responsibilities of the Actuary for SOX
  • ASOP 21
  • LFV-824: Model Risk Mitigation and Cost Reduction Through Effective Documentation