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)