Month: July 2007

The next phase in my study schedule will be to tackle the remaining information found in the “Life Insurance Products and Finance” textbook.  There are several chapters to cover here, so I am allocating two weeks (8 & 9) to cover this information.

Before I list the specific topics and corresponding sessions, I wanted to make a few general comments about the material found in this portion of the book.  There are a lot of formulas included and the format used is somewhat unique.  The formulas are written more from a programmer’s perspective or for someone who is writing a spreadsheet.  Thus, they are probably different from what you have seen on prior exams.

I think it’s more important to understand the concepts represented by the formulas rather than getting caught up in the notation that is used in the textbook.  In  my recordings I try to explain the logic behind the formulas more than the actual notation that is used.  Hopefully this will be helpful in your preparations.

The other thing to remember is that each chapter builds on the previous one.  That means that some of the earlier chapters (like 4 & 5) are not likely to be tested on their own, but the concepts presented in these chapters will be needed later on to do the calculations that are more likely to appear on the exam.  In a few weeks, I will have some practice problems which will show the type of questions that I think could come from this portion of the syllabus.

So with that as background, here is the information that I recommend you cover in weeks 8 & 9 (All of the chapters are from “Life Insurance Products and Finance”):

Chap. 4 — Basic Actuarial Math (C.1.1)

Chap. 5 — Life Insurance Cash Flows (C.1.2)

Chap. 7 — Reinsurance (C.1.3)

Chap. 8 — Investment Income (C.1.4)

Chap. 9 — Taxes (C.1.5)

Chap. 10 — Required Capital (C.1.6)

Chap. 11 — Profit Measures (C.1.7)

Chap. 13 — Annuity Products (C.1.8)

Chap. 14 — Financial Modeling (C.1.9)

Good luck and happy studying!!

Jeremy

The next step in my study schedule is to cover the material in section B.2.  This section includes a number of different published references related to pricing assumptions and pricing specific types of products.

The specific items to cover are included below:

Gross Premiums for Disability Waiver Benefits (B.2.1)

Dynamic Policyholder Behavior in Pricing VA’s (B.2.2)

Managing Behavior Risk (B.2.3)

Term Mortality and Lapses (B.2.4)

Lapse Supported Experience (B.2.5)

Mortality Table Slope (B.2.6)

Does Preferred Wear Off? (B.2.7)

Administering Complex Products (B.2.8)

Hidden Costs of Complex Products (B.2.9)

Ending the Mortality Table (B.2.10)

Pricing Select & Ultimate ART (B.2.11)

Data Quality (B.2.12)

Return on Equity (B.2.13)

Stochastic Pricing (B.2.14)

Happy Studying!!

The next phase in my study schedule is to move on to Section B of the lesson outline.  This section covers the assumption aspect of pricing.  Here are the sessions that I suggest you attempt to cover in Week 6:

Pricing Assumptions (Life Insurance Products & Finance – Chapter 3) — This is an extremely long chapter, so I have split it into 4 sessions covering the various assumptions (Mortality, Lapses, Interest Rates, & Expenses).  Sessions B.1.1 – B.1.4

Experience Assumptions for Inidividual Life and Annuities (ILA-D107) – Session B.1.5

Macro Pricing (TSA 43) – Session B.1.6

Pricing – A Marketing Perspective (LOMA 12) – Session B.1. 7

Happy Studying!

Jeremy

I have an additional section to add to the study schedule for Week 5.  The Week 5 schedule should include Study Note ILA-D104.  The title of the study note is “Actuarial Aspects of Inidividual Life and Annuity Contracts (Chapter 3),” but the chapter is really about the Product Development process.

I have moved this session from its original location in section B to section A.4 in my outline.  It is now shown as session A.4.6.

 There will be some additional items that are moving around in my outline.  I will make a post summarizing these items when the revisions are made.

Thanks.

Jeremy

The next step in my suggested study schedule is to tackle the material on the Product Development process.  As mentioned in one of the comments on this blog, there are several sources that cover the process, but they all take a slightly different approach. 

In past exams, the questions have tended to be specific enough that they are tied to a single part of the syllabus.  Thus, I don’t think that it’s crucial to try to reconcile all of the different sources together.  For now, I would just work through each of the individual sources and understand each list on its own.  After I have completed all of my recordings, I plan to re-visit this topic and provide a combined summary of all of the different lists.

With that as the background, here is the information that I suggest you try to cover in Week 5:

Product Development (Life Insurance Products & Finance – Chap. 2) – A.4.1

Product Development Process (ILA-DP101, ILA-DP111, LOMA 11) – A.4.2

World Class New Product Development (ILA-DP100) – A.4.3

The Role of the Actuary in Product Roll-out (ILA-DP803) – A.4.4

The Process of Premium Formulation (Published Reference) – A.4.5

Good Luck with your studying!!

 Jeremy

The Study Schedule for Week 3 included some longer study notes that cover a variety of different Life and Annuity products.  For Week 4, I’m recommending that you cover the more detailed information that is found in several of the Published References. 

Six of the published references go into additional details about more recent products.  These items are included in Section A.3 of my Outline of the material.  The articles are pretty easy to read, but there is a lot of information included in these short articles.

The specific published references to cover are as follows:

   Recent Developments in the Annuity World (A.3.1)

   Equity Indexed UL:  The Devil’s in the Details (A.3.2)

   Whither the VA? (A.3.3)

   VUL Secondary Guarantees (A.3.4)

   Return of Premium Term (A.3.5)

   LTCI Combination Products (A.3.6)

Good luck with these sessions and let me know if you have any questions.

Jeremy