LFMC syllabus changes for 2020

LFMC syllabus changes for 2020

The new LFMC syllabus is now available on the SOA’s new LFM page. As we saw this year with LPM and LAM, the changes are significant. 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 LFVC syllabus, but some were modified
  3. Dropped readings— these are readings that were on the 2019 LFVC syllabus but did not get retained at all on LFMC

 

The good news is that virtually all of the pre-IFRS 17 material was retained. 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

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.

 

  • LFM-652-20: Canadian Life and Health Insurance Guidelines (CLHIA) – Guideline G-6 – Illustrations (All)
  • CIA Report: Lapse Experience Study for 10-year Term Insurance, Jan 2014, (pp. 6-32)
  • CIA Research Paper: Lapse Experience under UL Level COI Policies, Sep 2015, (pp. 4-8)
  • LFM-649-20: International Actuarial Note 100: Application of IFRS 17 (All excluding section D)
  • CIA Educational Note: IFRS 17 Risk Adjustment for Non-Financial Risk for Life and Health Insurance Contracts, Jul 2019 (All)
  • CIA Educational Note: IFRS 17 Estimates of Future Cash Flows for Life and Health Insurance Contracts, Sep 2019 (All)
  • CIA Educational Note: Transition from CALM to IFRS 17 Valuation of Canadian Participating Insurance Contracts, Mar 2019 (All)
  • International Financial Reporting Standards (IFRS) 17 Insurance Contracts Example (Excel spreadsheet model)
  • LFM-142-20: In Depth – Detailing the New Accounting for Long-Duration Contracts of Insurers (All)
  • LFM-143-20: Fundamentals of the Principle Based Approach to Statutory Reserves for Life Insurance, Rudolph (All)
  • LFM-144-20: The Modernization of Insurance Company Solvency Regulation in the US (All excluding sections 7 & 9)
  • LFM-145-20: Global Insurance Regulatory Issues: Implications for U.S. Policy and Regulation (All)
  • LFM-650-20: FASB in Focus – ACCOUNTING STANDARDS UPDATE NO. 2018-12: Targeted Improvements to the Accounting for Long-Duration Contracts Issued by Insurance Companies (All)
  • LFM-148-20: The Theory of Risk Capital in Financial Firms (All)
  • LFM-651-20: Capital Allocation in the Insurance Sector (All)
  • LFM-653-20: Economic Capital Modeling Practical Considerations, Milliman 2006 (All)
  • LFM-654-20: Market Value Margins for Insurance Liabilities in Financial Reporting and Solvency Applications, E&Y, 2007 (pp 2- 41 & 46-65)
  • Economic Capital for Life Insurance Companies, SOA Research Paper, Oct 2016 (All excluding sections 5 & 7)
  • Economic Capital A Case Study to Analyze Longevity Risk, Risk & Rewards, Aug 2010 (All)
  • Tailoring Global Capital Standards, The Actuary, 2017 (All)
  • 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

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

  • LFM-618-13: OSFI Guideline D-10: Accounting for Financial Instruments Designated as Fair Value Option (All)
  • LFM-620-14: OSFI Guideline E15: Appointed Actuary – Legal Requirements, Qualifications and External Review, Sep 2012 (All)
  • LFM-632-12: OSFI B-3 Sound Reinsurance Practices and Procedures (All)
  • LFM-635-13: Participating Account Management and Disclosure to Participating Policyholders and Adjustable Policyholders (All)
  • LFM-637-13: OSFI Letter Evidence for Mean Reversion in Equity Prices (All)
  • CIA Educational Note: Best Estimates Assumptions for Expenses, Nov 2006 (All)
  • CIA Educational Note: Margins for Adverse Deviations (MfAD), Nov 2006 (All)
  • CIA Educational Note: Valuation of Segregated Fund Investment Guarantees, Oct 2005 (All)
  • CIA Educational Note: Approximations to the Canadian Asset Liability Method (CALM), Nov 2006 (All)
  • CIA Educational Note: Expected Mortality: Fully Underwritten Canadian Individual Life Insurance Policies, Jul 2002 (All excluding Appendices)
  • CIA Report: Report of the Task Force on Segregated Fund Liability and Capital Methodologies, Aug 2010 (All)
  • CIA Educational Note: Reflection of Hedging in Segregated Fund Valuation, May 2012 (All)
  • CIA Final Communication of a Promulgation of Prescribed Mortality Improvement Rates, Jul 2017 (All)
  • CIA Draft Report: Task Force on Mortality Improvement, Apr 2017 (All)
  • CIA Educational Note: Valuation of Universal Life Policy Liabilities, Feb 2012 (All)
  • CIA Educational Note: Use of Actuarial Judgment in Setting Assumptions and Margins for Adverse Deviations, Nov 2006 (All)
  • CIA Educational Note: Currency Risk in the Valuation of Policy Liabilities for Life & Health Insurers, Dec 2009 (All)
  • CIA Education Note: Investment Returns for Non-fixed Income Returns for Assets, Mar 2011 (All)
  • Final Communication of Promulgations of the Maximum Net Credit Spread, Ultimate Reinvestment Rates and Calibration Criteria for Stochastic Risk-Free Interest Rates in the Standards of Practice, May 2014 (All except section 2 only)
  • Final Communication of Updated Promulgations of the Ultimate Reinvestment Rates and Calibration Criteria for Stochastic Risk-Free Interest Rates, Jul 2017 (All)
  • CIA Educational Note: Investment Assumptions Used in the Valuation of Life and Health Insurance Contract Liabilities, Sep 2015 (All)
  • CIA Research Paper: Calibration of Fixed-Income Returns Segregated Fund Liability, Apr 2014 (All)
  • CIA Educational Note: Development of the Equilibrium Risk-Free Market Curve for the Base Scenario, Dec 2015 (All)
  • CIA Educational Note: Selective Lapsation for Renewable Term Insurance Products, Feb 2017 (All)
  • CIA Educational Note: Valuation of Gross Policy Liabilities and Reinsurance Recoverables, Dec 2010 (All)
  • CIA Educational Note: CALM Implication of AcSB Section 3855 Financial Instruments – Recognition and Measurement, Jun 2006 (All)
  • CIA Educational Note: Guidance on Fairness Opinions Required Under the Insurance Companies Act Pursuant to Bill C-57 (2005), Dec 2011 (All)
  • CIA Educational Note: Dividend Determination for Participating Policies, Jan 2014 (All)
  • LFM-648-19: PwC In depth A look at current financial reporting issues IFRS 17, Jun 2017 (All)
  • CIA Educational Note: Comparison of IFRS 17 to Current CIA Standards of Practice, Sep 2018 (All)
  • CIA Educational Note: Future Income and Alternative Taxes, Dec 2012 (All excluding Appendix D)
  • LFM-636-20: OSFI Guideline A-4 Internal Target Capital Ratio for Insurance Companies, Dec 2017
    • This was an update to the reading reference number only (previously called LFV-636-19)
  • LFM-641-19: OSFI: Own Risk and Solvency Assessment (E-19), Dec 2017 (All)
  • CIA Educational Note: Life Insurance Capital Adequacy Test (LICAT) and Capital Adequacy Requirements for Life and Health Insurance (CARLI), March 2018 (All)
  • A Multi-Stakeholder Approach to Capital Adequacy, Conning Research, Actuarial Practice Forum (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)
  • LFM-603-13: OSFI Guideline D-9 -Source of Earning Disclosure (Life Insurance Companies) (All)
  • CIA: Sources of Earnings: Determination and Disclosure, Aug 2004 (All)
  • Embedded Value: Practice and Theory, Actuarial Practice Forum, Mar 2009 (All)

The following readings were modified (i.e. either adding or removing pages)

 

  • LFM-634-19: CIA Standards of Practice: Insurance Sections 2100, 2300, 2400, 2500 & 2700 Dec 2019 (updated to most current document)
  • LFM-141-18: IFRS 17 Insurance Contracts – IFRS Standards Effects Analysis, May 2017, IASB (sections 1, 2, 4 & 6.1-2 only) (removed section 7)
  • Canadian Insurance Taxation, Swales, et. al., 4th Edition, 2015 (added chapter 10 and 11)
  • LFM-645-19: OSFI Guideline – Life Insurance Capital Adequacy Test (LICAT), Chapters 1-11, October 2018 (updated to most current document)

Dropped readings

  • LFV-646-19: Chapter 1 (excluding 1.10, 1.12 & 1.13) of Statutory Valuation of Individual Life and Annuity Contracts – Volume I, Claire, D., Lombardi, L. and Summers, S., 5th Edition, 2018
  • LFV-102-09: Actuarial Review of Reserves and Other Annual Statement Liabilities
  • CIA Educational Note on IFRS: Classification of Contracts under IFRS (IASP 3), Jun 2009
  • CIA Educational Note on IFRS: Classification of Contracts under IFRS (IASP 3), Jun 2009
  • CIA Educational Note on IFRS: Measurement of Investment Contracts and Service Contracts under IFRS (IASP 4), Jun 2009
  • CIA Research Paper on IFRS: Embedded Derivatives and Derivatives under IFRS (IASP 10), Dec 2009
  • CIA Research Paper: IFRS Disclosure Requirements for Life Insurers, Dec 2010
  • Actuarial Aspects of SOX 404, Financial Reporter, Issue 59, Dec 2004
  • Responsibilities of the Actuary for Communicating Sarbanes-Oxley control: Effectiveness in Accordance with Actuarial Standards of Practice, Financial Reporter, Issue 59, Dec 2004
  • LFV-133-16: Cluster Analysis: A Spatial Approach to Actuarial Modeling, Milliman, 2008
  • LFV-136-16: Life Insurance Products and Finance, Atkinson & Dallas, Ch.11, pp. 499-502
  • LFV-626-10: Session PD-28: Embedded Value (EV) and Market-Consistent Embedded Value (MCEV). What is the Difference?
  • Strategic Management of Life Insurance Company Surplus, TSA XXXVIII, pp. 105-116
  • Life, Health & Annuity Reinsurance, Tiller, John E. and Tiller, Denise, 4th Edition, 2015
  • Accounting for Reinsurance Contracts under International Financial Reporting Standards, (IASP 9), (excluding Appendices C & D)