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Today we posted an initial study schedule whose primary purpose is to show you which of the currently existing LP lessons are relevant to the LPM exam. This allows anyone currently using the course to continue studying what we have available right this instant (which is just moments after the new LPM syllabus became public!). 🙂

Very soon we will begin posting new LPM lessons and will evolve the study schedule accordingly. As always, please email Eddie with any questions!

The new LPM syllabus has been posted on the SOA’s website. Even though there are significant changes from LP, we have already been burning the midnight oil to give you as much as possible to work with.

We’ve listed the changes below, but I think it’s important to understand that LPM is fundamentally a different exam than LP. The syllabus is much more different than similar. Only about a third of the new LPM syllabus contains readings that were on LP. Major LP books like LIME, Hardy, CIT, and more are now gone. The new readings are a mix of brand new readings and readings that were previously on other exam syllabi like LFV.

One of the most notable and interesting changes is that LPM now has a significant asset/investment component. This will possibly make the exam more quantitative, but I think also more interesting to study. It will also give you a more complete perspective of an insurer’s balance sheet and asset/liability interactions. I have also personally covered much of these materials on past exams, going back nearly a decade. I have already developed a number of new lessons for asset material that have been tailored to the new LPM exam, complete with examples and quizzes that will frame the material in more of a LPM context—something that I think is very important when studying for the exam.

We will soon post more details on how and when we will be transitioning our existing LP course into the new LPM course. Here’s a breakdown of how things changed. Warning: long lists ahead!

New readings added to LPM (about 995 pages):

• LPM-165-19: Life Products and Features
• LPM-166-19: Annuity Product and Features
• LPM-142-16: Malcolm Life Enhances Its Variable Annuities, 2010
• LPM-150-19: Tax Reform Impacts on Life Insurance Pricing and Profitability, 2018
• LPM-148-19: Ch. 9 of Life Insurance Products and Finance, Atkinson and Dallas
• Experience Study Calculations, Oct 2016 sections 2-4, 11, 12, 15, 17 & 18 (excluding 18.2, 18.8 & 18.9)
• Table Development, Feb 2018 Excl Appendices C, D, F, G & H
• Credibility Theory Practices, 2009 Excl. Appendices and formula derivations
• LPM-152-19: Lapse Supported Insurance Analysis
• Long-Term Care Insurance: The SOA Pricing Project, 2016
• Predictive Modeling for Life Insurance: Ways Life Insurers Can Participate in the Business Analytics Revolution, Product Matters, 2018
• ASOP 54: Pricing of Life and Annuity Products, Jun 2018
• Post Level Term Experience Results pp. 21-44
• LPM-151-19: Transamerica Term Life: Understanding Post-Level Experience
• Industry-Wide Report Analyzes Post-Level Term Lapse and Mortality Experience, The Actuary, 2014
• Term Conversions: Pricing and Reserving, Product Matters, Mar 2017
• Report on the Conversion Experience Study for the Level Premium Term Plans, 2015 pp. 6-9, 39-40 & Appendix B
• LPM-158-19: A Ticking Clock: New York’s Pending Non-Guaranteed Elements Rule for Life Insurance and Annuity Products
• LPM-159-19: New York State Department of Financial Services 11 NYCRR 48 (Insurance Regulation 210) pp. 4-9
• Macro-Pricing, Product Development Monograph pp. 1-41
• Pricing Surface, Product Matters, 2017
• Report on Pricing Using Market Consistent Embedded Value (MCEV), Jun 2012 Excl. Appendix 2
• LPM-155-19: Understanding Profitability in Life Insurance
• Earnings Emergence Insurance Accounting under Multiple Financial Reporting Bases, 2015 pp. 4-6, 10-24 & 45-53
• LPM-154-19: Introduction to Source of Earnings Analysis
• LPM-153-19: Life in-force Management: Improving Consumer Value and Long-Term Profitability
• LPM-157-19: Diversification of Longevity and Mortality Risk
• LPM-156-19: The Impact of Stochastic Volatility on Pricing, Hedging and Hedge Efficiency of Withdrawal Benefit Guarantees in Variable Annuities (Note: Candidates not responsible for mathematical derivations or detailed results, but should understand concepts and methodology)
• Interesting Challenges for Insurers, Product Matters, Jun 2012
• Life, Health & Annuity Reinsurance, Tiller and Tiller, 4th ed., 2015 Ch. 4
• Life, Health & Annuity Reinsurance, Tiller and Tiller, 4th ed., 2015 Ch. 5
• Life, Health & Annuity Reinsurance, Tiller and Tiller, 4th ed., 2015 Ch. 6
• Life, Health & Annuity Reinsurance, Tiller and Tiller, 4th ed., 2015 Ch. 7
• Life, Health & Annuity Reinsurance, Tiller and Tiller, 4th ed., 2015 Ch. 9 pp. 269-280
• Life, Health & Annuity Reinsurance, Tiller and Tiller, 4th ed., 2015 Ch. 17
• LPM-160-19: Strategic Reinsurance and Insurance: The Increasing Trend of Customized Solutions pp. 14, 14-15 & 18-31
• Managing Investment Portfolios Ch. 3: Managing Institutional Investor Portfolios Section 4.1
• Managing Investment Portfolios Ch. 5: Asset Allocation (sections 2-4) Sections 2-4
• Managing Investment Portfolios Ch. 6: Fixed-Income Portfolio Management (sections 1-5) Sections 1-5
• Managing Investment Portfolios Ch. 12: Evaluating Portfolio Performance (section 4) Section 4
• Handbook of Fixed Income Securities Ch. 6: Bond Pricing, Yield Measures and Total Return (pp. 102-120) pp. 102-120
• LPM-162-19: Liquidity Risk Management: Best Risk Management Practices
• LPM-163-19: Managing your Advisor: A Guide to Getting the Most Out of the Portfolio Management Process
• Managing Investment Portfolios Ch. 8: Alternative Investments (section 3) Section 3
• Handbook of Fixed Income Securities Ch. 9: U.S. Treasury Securities (pp. 194-205) pp. 194-205
• Handbook of Fixed Income Securities Ch. 10: Agency Debt Securities (pp. 207-220) pp. 207-220
• Handbook of Fixed Income Securities Ch. 11: Municipal Bonds (pp. 225-230 & 234-246) pp. 225-230, 234-246
• Handbook of Fixed Income Securities Ch. 12: Corporate Bonds (pp. 259-287, excluding exhibits 12-1 & 12-2) pp. 259-287 (excl. Ex 12-1 and 12-2)
• Handbook of Fixed Income Securities Ch. 16: Private Money Market Instruments (pp. 337-340 & 345-351) pp. 337-340, 345-351
• Handbook of Fixed Income Securities Ch. 17: Floating-Rate Securities
• Handbook of Fixed Income Securities Ch. 24: An Overview of Mortgages and the Mortgage Market
• Handbook of Fixed Income Securities Ch. 25: Agency Mortgage-Backed Securities
• Handbook of Fixed Income Securities Ch. 26: Agency Collateralized Mortgage Obligations
• Handbook of Fixed Income Securities Ch. 62: Interest-Rate Swaps and Swaptions
• Handbook of Fixed Income Securities Ch. 66: Credit Derivatives (pp. 1541-1559) pp. 1541-1559
• LPM-164-19: Derivatives Markets Ch. 7 Sections 7.2-7.5 & 7A
• LPM-164-19: Derivatives Markets Ch. 8 Sections 8.3-8.6
• LPM-161-19: High-Yield Bond Market Primer

Readings that were on LP but modified on LPM

• Impact of VM-20 on Life Insurance Product Development, SOA Research, Nov 2016, pp. 1-31 (excluding discussion of 20-year term)
  • Syllabus now excludes the 20-year term material
• Modeling of Policyholder Behavior for Life and Annuity Products, SOA, 2014 pp. 6, 9-16 & 19-73
  • Page range expanded
• LPM-149-19: Life Insurance Products and Finance Ch. 11 pp. 499-502
  • Page range reduced
• LPM-113-09: Economics of Insurance: How Insurers Create Value for Shareholders pp. 4-31
  • Page range reduced

Readings that were on LP and DID get carried to LPM in whole (about 535 pages):

• Term Conversions – A Reinsurer’s Perspective
• Quantification of Natural Hedges in LTCI Combo Products
• Understanding the Volatility of Experience and Pricing Assumptions in LTCI
• Life Insurance Acceleration Riders
• LP-136: Marketing for Actuaries Ch. 4: Distribution Systems
• LP-134: Digital Distribution in Insurance
• LP-147: Life Insurance – Focusing on the Consumer
• LP-107
• Term Mortality and Lapses
• Evolving Strategies to Improve Inforce Post-Level Term Profitability
• Level Term Lapse Rates Lessons Learned
• Mortality Table Slope
• Ending the Mortality Table
• Report on Premium Persistency – Flexible Premium UL
• LP-110: Policyholder Dividends
• ASOP 2: Non-Guaranteed Elements
• VA Guaranteed Living Benefits Utilization
• Proposed ASOP on Setting Assumptions
• Predictive Modeling – Underwriting
• The Use of Predictive Analytics in the Development of Experience Studies
• Relationship of IRR to ROI on a Level Term Life Insurance Policy
• Risk Based Pricing
• LP-113: Creating Shareholder Value – Lesson 1
• LP-113: Creating Shareholder Value – Lesson 2
• Transition to a High Interest rate Environment
• Pricing Response to Life Settlements
• LP-133: Testing for Adverse Selection in Life Settlements
• LP-121: Nonforfeiture Practices
• Impact of VM-20 on Life Insurance Product Development – Phase 1

Readings that were on LP that did NOT get carried to LPM (about 1540 pages)

• LIPF Ch. 2: Overview of Product Development
• LP-139: The Connection Between Military & Business Strategies
• LP-105
  • However, the new LPM-165 and LPM-166 are rewrites of this study note
• LP-102: Equity Indexed Annuities
• LP-131: Deconstructing Long-Term Care Insurance
• LP-127: Critical Illness Product Design
• LP-126: Critical Illness Pricing
• The Art and Science of Life Insurance Distribution (all chapters dropped)
• The Interstate Compact
• LP-124: Role of Actuary in Product Roll Out
• LP-140: Life Insurance Product Development Innovation and Optimization
• Expected Mortality – Fully Underwritten Policies in Canada
• Lapse Experience Study for 10-Year Term Insurance
• Post-Level Term Lapse and Mortality Experience
• Lapse Experience Under Lapse-Supported Products
• Lapse Experience Under Universal Life Level Cost of Insurance Policies
• LP-132: Lapsed-Based Insurance
• Best Estimates Assumptions for Expenses
• LP-116: Variable Annuities
• Application of Predictive Modeling – VA Policyholder Behavior
• ASOP 23: Data Quality
• How to Clean and Validate Experience Data
• LP-130: Life Insurance Underwriting in the United States
• Automated Life Underwriting: Phase 2
• LP-114: Life Insurance Costing
• Life Insurance Products and Finance (all chapters dropped)
• LP-141: Introduction to Reinsurance
• LP-143: Using Transparency to Thaw the Securitization Market
• LP-138: IAIS Global Insurance Market Report
• LP-144: Capital, Cash, Shareholder Value and Active In-Force Management
• What’s Backing Your Life Insurance Guarantee?
• Is This Correction Good For Life Insurance
• Investment Guarantees (all chapters dropped)
• Stochastic Modeling text book (all sections dropped)
• LP-122: SNL for Life
• LP-123: SNL for Annuities
• LP-125: NAIC Life Insurance Model Regulation
• LP-128: CLHIA – Guideline Illustrations
• LP-145 and LP-146: Actuarial Guideline 49
• 2018 Generally Recognized Expense Table (GRET)
• Regulatory Risk and North American Insurance Organizations
• Impact of VM-20 on Life Insurance Product Development – Phase 2
• Life Insurance & Modified Endowments (all chapters dropped)
• Canadian Insurance Taxation (all chapters dropped)

Solutions for every problem on the fall 2018 exam are now posted on the SOA Exams tab of the online seminar. As with past sittings, I’ve done my best to provide as much instructional value as possible with my solutions. I’ve also addressed several issues in the SOA model solutions where appropriate. If you have additional questions on any past exam, please post those to the course forum for that exam.

The Analysis of Past Exams spreadsheet in the Supplementary Materials section has been updated to include the fall 2018 exam. 

The purpose of the spreadsheet is to break down every relevant exam question going back to the early 2000s. By my most recent count, there are over 500 individual sub-questions (over 80 hours in point value) still on syllabus. This is way more than the average person can (or should) work, but one way to use it is to look for problems from specific readings (e.g. calculation type problems).

Just be careful with your time. Sometimes I see people spend weeks and weeks working the older DP exams. While there are certainly many relevant questions in those older exams, the problem is that you will end up spending many hours practicing a fairly small percentage of the current syllabus. 

Another pitfall to avoid: Do not use this spreadsheet as a prediction tool for future exams. The testing frequency of past readings is highly biased toward readings that have been on the syllabus the longest. Some readings have been on the ILA syllabi for over a decade, while MANY others have been added only in the last 1–2 years. 

A better use of your time: I would save at least the most recent two exams to work in their entirety if you can — especially under exam conditions. These are still 100% on syllabus making them a valuable exam prep resource, especially if you use them to sharpen exam-day skills. Use older exams for topic-specific practice as you have time, but be sure to continue studying the entire current syllabus. Assume anything on the current syllabus will be tested with equal probability.

Also, please remember that I have solutions for many, many past problems posted on the SOA Exams tab of the online seminar. I will be posting solutions to the fall 2018 exam later this month as well.

When studying for actuarial exams on top of work and personal responsibilities, it is very easy to neglect your physical health by not exercising. This is a big mistake. As Wendy Suzuki explains in her TED Talk, “The Brain-Changing Benefits of Exercise,” when you exercise it literally changes your brain for the better. Your focus improves immediately, and it even causes your brain to grow new brain cells over time. Given the highly cerebral nature of most actuarial exam topics, mixing regular exercise into your study routine is, well, a no-brainer. 🙂

Registration for all spring 2019 SOA exams is now open on the SOA’s site. Please don’t forget to register for the exam. The deadline is March 25, 2019.

Here are a few links to previous blog posts you might want to check out as you are starting your studying for spring 2019.

• The value of note-taking when studying
• Understanding the difference between recall and recognition
• Tips for juggling work responsibilities with studying
• Tips for running your first FSA exam “marathon”
• Tips for formatting written solutions
• Tips for deciding how much precision to show in numerical answers
• How to avoid making the exam harder than it already is

Good luck, and please let us know if you have any other questions.

There are two equally important skills needed to get a passing score on any FSA exam: recognition and recall. The highly comprehensive video lessons we include in the online seminar are intended to help you as much as possible with recognition, and the memory aids we include (Flashcards, condensed outlines, etc.) are intended to aid in recall.

Many FSA exam questions require you to recognize key concepts. This requires a conceptual understanding that you hopefully established during the initial learning phase of the online seminar while going through all of our video lessons. The more concepts you understand, the easier it is to see through all of the technical “window dressing” in FSA exam problems and get down to the underlying core concept being tested. 

But it is very important not to let your mind “trick” itself into thinking it can recall, when it’s merely recognizing.

Recall is a different skill: it’s the ability to produce information from a list or a source reading based the question asked. Questions like:

• List the characteristics of…
• Describe step X of process Z

In other words, recall requires memorization, but it’s easy to be fooled into thinking you’ve memorized something when in fact you are simply recognizing it on a flashcard or outline. To mitigate this pitfall, I highly recommend the following strategies:

• Use active recall as much as possible. When possible, physically write out detail and answers to flashcard questions. If this is too slow or impractical, try saying the answer to a flashcard out loud. By writing or speaking the answer, it forces your mind to truly build those neural connections between keywords and list detail. 
• Create images (even very simple ones) to associate with lists. The human mind is significantly better at remembering pictures than words alone. 
• Try to associate emotions and sounds with lists and keywords. Like images, the human mind is more likely to remember sounds and emotions than just words on a page
• Flag or use our Flashcards app to tag/identify cards you consistently struggle with. Review these cards more often than others.
• Create other mnemonics and memory devices as you have time
• Find a study buddy or someone else to quiz you on flashcards so that you have to speak the answer

It’s also important not to obsess too much about memorization and recall because many, many FSA questions require concept recognition and synthesis across multiple readings. Even in the final month, it’s not too late to continue making the those conceptual connections by continuing to consume the video lessons and reference the detailed study manual and source material. Continue writing margin notes, etc. during this phase as well to stay as active as possible.

It’s also important to remember that you will not be able to memorize every possible detail. There is simply too much on the syllabus for that. The good news is that you can fall far short of perfect and still pass the exam and even get a 10. Just continue doing your best to balance recall and recognition right down to the final week, and stay positive!

As you probably know, you will get a 15-minute read-through time before each exam session (both morning and afternoon for 5-hour exams). Last sitting, there was some confusion around what appeared to be a new “no folding” rule during this read-through time.

Fortunately, this is now clarified in the SOA’s official rules and regulations. In paragraph 16, “Special Instructions for Written‐Answer Exams”:

Writing/folding pages, brain dumping, highlighting or the use of a calculator will not be permitted during the read‐through time.

As always, please set aside time to read the rules and regulations before you take the exam.