SOA Exams & Modules
Module Overview Domestic/Foreign/Alien Insurance Companies U.S. insurance departments classify insurance companies as “domestic,” “foreign” and “alien.” Insurance companies formed outside the United States may be authorized to do business in the United States. These non-U.S. companies are called “alien”. The McCarran-Ferguson Act Regulation of life insurance in the United States has always been primarily a responsibility of the various states, …
[mathjax] Linear Models Classification of Variables Intention (by their role in the study) target/response/dependent/output variable risk factors/drivers Characteristics (by their nature) numeric/quantitative variables categorical/qualitative/factor variables The Model Building Process Stage 1: Define the Business Problem Objectives prediction-focused (accurate prediction) vs. interpretation-focused (relationship) Descriptive Analytics: Focuses on insights from the past and answers the question, “What happened?” Predictive Analytics: Focuses …
Developing an ERM Framework ERM Framework Criteria (Effective ) Scope is enterprise-wide All risk categories included Focused on key risks Enhances decision making ability Integration across risk type Aggregated metrics Balanced risk & return management Appropriate disclosures Measures value impacts Primary stakeholder focus Challenges to ERM Analysis The implementation of a strong ERM framework must address three primary hurdles. Quantification …
[mathjax] Introduction The Introduction to ILA module will give an overview of the role of an actuary in a Life and Annuity context. The module will give a strong foundation of understanding of life insurance and annuity product features, markets and distribution. Candidates will also learn the fundamentals of product development, pricing, reinsurance, valuation, financial reporting and administration. This module …
[mathjax] Basic Probability Functions and Moments Probability Density Function \(f(x)=\dfrac{d}{dx}F(x)\) or \(f(x)=-\dfrac{d}{dx}S(x)\) Hazard Rate Function \(\mu (x)=h(x)=\dfrac{f(x)}{S(x)}=-\dfrac{d\ln S(x)}{dx}\) Cumulative Hazard Rate Function \(H(x)=\int_{-\infty }^{x}{h(t)dt}=-\ln S(x)\) \(S(x)=e^{-H(x)}=e^{-\int_{-\infty }^{x}{h(t)dt}}\) Moment of X nth Raw Moment of X: \(\mu’_{n}=E[x^n]\) nth Central Moment of X: \(\mu_n=E[{(x-\mu )}^n]\) Covariance: \(Cov(X,Y)=E[(X-\mu_X)(Y-\mu_Y)]=E[XY]-E[X]E[Y]\) Correlation Coefficient: \(\rho_{XY}=Cov(X,Y)/({\sigma_X}{\sigma_Y})\) Coefficient of Variance: \(\sigma /\mu \) Skewness: \(\gamma_1=\mu_3/\sigma^3\) Kurtosis: \(\gamma_2=\mu_4/\sigma^4\) Moment Generating …
Basic Calculus Integrations \(\dfrac{d}{dx}a^x=a^x\ln(a)\) \(\int{{{}\over{}}a^xdx}=\dfrac{a^x}{\ln(a)}\text{ for }a>0\) Logarithmic Differentiation \(\dfrac{df(x)}{dx}=f(x)(\dfrac{d\ln f(x)}{dx})\), since \(\dfrac{d\ln f(x)}{dx}=\dfrac{df(x)/dx}{f(x)}\) Partial Fraction Decomposition \(\int{{{x}\over{1+x}}dx}=\int{(1-{{1}\over{1+x}})dx}\) Integration by Parts \(\int{udv}=uv-\int{vdu}\) Special Cases: \(\int_{0}^{\infty }{xe^{-ax}dx}=\dfrac{1}{a^2}\), for \(a>0\) \(\int_{0}^{\infty }{x^2e^{-ax}dx}=\dfrac{2}{a^3}\), for \(a>0\) Sets Set Properties Associative Property \((A\cup B)\cup C=A\cup (B\cup C)\) and \((A\cap B)\cap C=A\cap (B\cap C)\) Distributive Property \(A\cup (B\cap C)=(A\cup B)\cap (A\cup C))\) …
Accounting Principles
Product Classification Why need product classification? Not all products manufactured by insurance companies are insurance contracts Insurance contracts are those that contain significant insurance risk How products are classified? For valuation purposes, insurance contracts can be further classified into: Ordinary Life – Participating Ordinary Life – Non-Participating Personal Accident Unit-linked (Contracts with an explicit account balance) Universal life (Contracts with …
Introduction IFRS 17 Insurance Contracts establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts issued. It also requires similar principles to be applied to reinsurance contracts held and investment contracts with discretionary participation features issued. The objective is to ensure that entities provide relevant information in a way that faithfully represents those contracts. This information gives a …
Coding & Programming
FUNCTION INSTR(BYVAL TEXT_DATA AS TEXT, BYVAL TEXT_FIND AS TEXT)AS INTEGER ; Match Sub-String and Return its Position I INTEGER J INTEGER FOR I FROM 1 TO LEN(TEXT_DATA) – LEN(TEXT_FIND) + 1 FOR J FROM 1 TO LEN(TEXT_FIND) IF SUBSTR(TEXT_FIND,J,1) <> SUBSTR(TEXT_DATA,I + J – …
Function Categories The Prophet programming language provides a wide range of functions which are grouped into the following categories: Array functions Conversion functions Dynamic functions Error / Warning functions Financial functions Logical functions Mathematical functions Product functions Read functions Run Position functions Run Progress functions Run Setting functions Statistical functions Text functions Trigonometric functions Array Functions Function Description ARRAY_INITIALISE Resizes …
Extended formulas enable more complex calculations to be carried out than standard Prophet formulas. They are also able to retain the values that they have calculated from one model point to the next and from one loop to the next in a dynamic or stochastic run. Examples of situations where extended formulas can be useful include: The calculation of commutation …
Overview The Prophet programming language is the programming language used to create and maintain formula definitions for variables in each product and library. A formula in Prophet can be specified using either: The standard Prophet language features or, The Prophet Extended Formula features. A formula created using the standard Prophet language generates values for one variable only. An extended formula …
Purpose Extended formulas enhance and extend the capabilities of the Prophet programming language. They enable more complex calculations to be carried out than standard Prophet formulas. They are also able to retain the values that they have calculated from one model point to the next and from one loop to the next in a dynamic or stochastic run. Examples of …
Q_A_EXP IF ZERO_MORT = 1 AND AGE_AT_ENTRY < ZERO_TOL_AGE THEN 0 ELSE IF WL_POLICY = 1 AND t