Actuarial Notes

Exam GI-201

GI 201 – Operational, Financial, Regulatory and Legal is an exam of the Society of Actuaries' Fellowship (FSA) pathway. Its syllabus covers the Nov 2026/Mar 2027 sittings.

Learning Objectives

General Insurance Company Operations (5–10%) The candidate will understand the structure and functions of a general insurance company.

  1. Describe the various core and supporting functions of a general insurance company.
  2. Differentiate among the various classifications of insurers.
  3. Describe the marketing and distribution of general insurance products.
  4. Understand the processes for underwriting and pricing general insurance policies.
  5. Describe the activities and challenges in the claim handling process.
  6. Describe the goals of insurer risk control activities.
  7. Explain why premium audits are conducted.
  8. Demonstrate knowledge of general insurance risks, perils, product characteristics / issues, and contracts.
  9. Describe and compare the different types of reinsurance and risk mitigation instruments.
  10. Demonstrate knowledge of the issues regarding international business for insurance companies.

Readings:

  • General Insurance Company Operations, SOA, May 2025 (1a-g)
  • Fundamentals of General Insurance Actuarial Analysis, Friedland, J., 2nd Edition, 2022 (1d)
    • Ch. 29: Manual Ratemaking
  • IAA Risk Book: Non-Life Perils and Coverages, Insurance Regulation Committee, International Actuarial Association, May 2023, sections 3-7, and 8.1-8.2 (1h)
  • IAA Risk Book: Reinsurance, Insurance Regulation Committee, International Actuarial Association, May 2023, sections 2-4, 7 and 11 (1i)
  • Excerpts from Business Law for Insurance Professionals, Assignment 3, pp. 3.29-3.39 (begin on pp. 3.29 with “Financial Considerations in International Business”) (1j)

Regulatory Environment (20–32%) The candidate will understand the regulatory environment for general insurance.

  1. Describe the functions and goals of the different forms of insurance regulation.
  2. Describe the protections provided by solvency and insolvency regulation.
  3. Understand the issue of discrimination and insurance.
  4. Discuss the issues regarding usage-based insurance and telematics in automobile insurance.
  5. Describe the development of general insurance programs controlled by government or collective insurance industry organizations and their mechanisms of operation.
  6. Discuss the issues with the use of credit scores by insurers.
  7. Understand the function and regulation of price optimization.
  8. Outline the function and regulation of captives.
  9. Understand the functions and regulatory environment for reinsurance.

Readings:

  • The General Insurance Regulatory Environment, SOA, May 2025 (2a-b)
  • Fundamentals of General Insurance Actuarial Analysis, Friedland, J., 2nd Edition, 2022 (2a)
    • Ch. 28: Rate Regulation
  • IAA Risk Book: Non-Life Perils and Coverages, Insurance Regulation Committee, International Actuarial Association, May 2023, sections 8.5-8.7 (2a, 2c)
  • Insurance and the Discrimination Laws: Motor and Travel Insurance, Edmunds, T., House of Commons Library Standard Note SN04601, Mar 2013 (report dated Oct 2015), pp. 4- (2c)
  • Usage Based Insurance and Telematics, SOA, May 2025 (2d)
  • IAA Risk Book: Non-Life Perils and Coverages, Insurance Regulation Committee, International Actuarial Association, May 2023, sections 8.3-8.4 (2e)
  • Government Provision of General Insurance, SOA, May 2025, sections 1-3, 5, 6, and 9 (2e)
  • Private Flood Insurance and the National Flood Insurance Program, CRS Report R45242, Congressional Research Service, Updated Jan 2023, pp. 1-21 (excluding the section “NFIP Reauthorization and Legislation” on pp. 5-6, and Table 1 on pp. 9) (2e)
  • Issues Paper: Use of Credit Scores by Insurers Canadian Council of Insurance Regulators, Credit Scoring Working Group, Jun 2011, pp. 5-16 (2f)
  • Price Optimization White Paper, Casualty Actuarial and Statistical (C) Task Force, National Association of Insurance Commissioners, Nov 2015, pp. 6-16 (paragraphs 15-49) (2g)
  • Captive Insurance, SOA, May 2025 (2h)
  • IAA Risk Book: Reinsurance, Insurance Regulation Committee, International Actuarial Association, May 2023, section 10 (2i)

Legal Environment (15–25%) The candidate will understand tort law and insurance law with respect to general insurance.

  1. Describe and interpret the key elements of tort law and the underlying principles of insurance law.
  2. Discuss the issues of tort trends and tort reform as it applies to the general insurance industry.
  3. Understand the effects of transnational tort litigation.
  4. Understand mass torts/class action suits and discuss their effect on the general insurance industry.
  5. Understand the use of no-fault insurance.
  6. Understand the international legal environment as it relates to general insurance.
  7. Discuss the influence of the U.S. tort law environment in other countries.
  8. Discuss the issue of social inflation and its effect on general insurance.
  9. Describe and interpret legal cases/issues included in the syllabus resources.

Readings:

  • Excerpts from Business Law for Insurance Professionals, Assignments 1 & 2 (3a, 3i)
  • IAA Risk Book: Non-Life Perils and Coverages, Insurance Regulation Committee, International Actuarial Association, May 2023, section 8.10 (3a)
  • Tort Law – Topics for General Insurance Actuaries, SOA, May 2025, sections 1-5 (excluding 5.1 & 5.5) Note: Regarding the table in 5.4 (pp. 35-37), candidates are only expected to be familiar with the cases BMW of North America v. Gore and State Farm Mutual Auto. v. Campbell. (3b-d, 3i)
  • Government Provision of General Insurance, SOA, Section 10, Appendix – No-Fault Insurance (3e)
  • Excerpts from Business Law for Insurance Professionals, Assignment 3, 3.11-3.29 (begin on pp. 3.11 with “Legal Systems”, end before “Financial Considerations…” on pp. 3.29) (3f)
  • Tort Law – Topics for General Insurance Actuaries, SOA, May 2025, section 6 (excluding 6.2.1-6.2.9) (3i)
  • Social Inflation: Navigating the Evolving Claims Environment, The Geneva Association, Dec 2020 (pp. 6-17, 19-34 & 36-38) (3h-i)

Financial Economics (5–8%) The candidate will understand elements of financial economics relevant to general insurance.

  1. Demonstrate knowledge of behavioral finance.
  2. Demonstrate knowledge of asset liability management strategies for general insurance companies.
  3. Calculate an underwriting profit margin using different models under a financial economics approach.

Readings:

  • Behavioral Finance, J. Ritter, Pacific-Basin Finance Journal, Volume 11, Issue 4, Sep 2003, sections 1-3 (pp. 429-434) (4a)
  • ALM Strategies for General Insurers, SOA, May 2025 (4b)
  • Ratemaking: A Financial Economics Approach, D’Arcy, S. and Dyer, M., 1997 Proceedings of the Casualty Actuarial Society, Volume LXXXIV, sections 1, 2, 4 & 6 Note: Sections 3 and 5 are not required reading but may be beneficial as background reading. (4c)

Financial Reporting (10–20%) The candidate will understand elements of financial reporting for general insurance companies.

  1. Demonstrate knowledge of the different types of general insurance liabilities.
  2. Understand and apply the concepts of insurance/reinsurance accounting.
  3. Understand the different financial reporting standards for general insurers.
  4. Understand key terms and considerations related to claim liabilities.
  5. Understand the reporting of financial instruments.

Readings:

  • IAA Risk Book: Liabilities for General Insurance, Insurance Regulation Committee, International Actuarial Association, May 2023 (pp. 2-22) (5a)
  • General Insurance Financial Reporting Topics, Society of Actuaries, 5th Edition, 2021: (5b-c)
    • Ch. 1: Accounting Concepts for General Insurance
    • Ch. 2: Accounting for Insurance Contracts (excluding 2.3.3-2.3.4, 2.5.1-2.5.2.1, 2.7.2-2.7.4 & 2.8 after the Insight box on pp. 36)
    • Ch. 4: Accounting for Reinsurance Contracts (excluding 4.4.2, 4.6.3-4.6.5, 4.8.3 & 4.9)
  • Fundamentals of General Insurance Actuarial Analysis, Friedland, J., 2nd Edition, 2022 (5d)
    • Ch. 24: Claim Liabilities
  • General Insurance Financial Reporting Topics, Society of Actuaries, 5th Edition, 2021: (5e)
    • Ch. 3: Accounting for Financial Instruments (excluding 3.4.3)

Financial Health Measurement (15–20%) The candidate will understand the analysis of a general insurer’s financial health.

  1. Understand the various considerations for performance measurement of a general insurer.
  2. Understand and apply financial health ratios.
  3. Demonstrate knowledge of solvency monitoring for general insurance companies.
  4. Understand and apply the EU Solvency II capital requirement.
  5. Demonstrate knowledge of ORSA.
  6. Discuss the function of credit rating agencies and their influence on general insurers.

Readings:

  • General Insurance Financial Reporting Topics, Society of Actuaries, 5th Edition, 2021:
    • Ch. 10: Performance Measurement for General Insurers (excluding 10.4.3, and 10.8.3.1-10.9.1) (6a)
    • Ch. 11: Financial Ratios for Insurers (excluding 11.6.2, 11.7.1, 11.8, and 11.10-11.11) (6a-b)
    • Ch. 12: Solvency Monitoring (excluding 12.5.3, 12.9.2-12.9.3, 12.10.2, 12.11 and 12.13) (6c-e)
  • IAA Risk Book: Reinsurance, Insurance Regulation Committee, International Actuarial Association, May 2023, section 9 (6a, c-d, f)
  • IAA Risk Book: Own Risk Solvency Assessment, Insurance Regulation Committee, International Actuarial Association, May 2023, pp. 3-19 (excluding sections 10.1 & 11) (6e)
  • NAIC Own Risk and Solvency Assessment (ORSA) Guidance Manual, NAIC, as of Dec 2022, pp. 1-5 & 7-16 (6e)
  • Deriving Value from ORSA: Board Perspective, International Actuarial Association, Apr 2015, pp. 1-8 (6e)
  • General Insurance Financial Reporting Topics, Society of Actuaries, 5th Edition, 2021: (6f)
    • Ch. 13: General Insurance Financial Ratings (excluding sections 13.4.3-13.4.6.4, 13.5.2 and the first paragraph on page 376 after the Insight box)

Responsibilities of the Actuary (5–10%) The candidate will understand the standards of practice and professionalism required of the actuary.

  1. Describe, interpret and apply professionalism principles as defined by the International Actuarial Association (IAA).
  2. Describe, interpret and apply Standards of Practice as defined by the IAA.
  3. Demonstrate knowledge of the general insurance actuarial opinion and the role of the appointed actuary.
  4. Describe and apply the concept of materiality.

Readings:

  • IAA Risk Book: Professional Standards, Insurance Regulation Committee, IAA, May 2023, pp. 2-7 (7a)
  • International Standard of Actuarial Practice 1, General Actuarial Practice, IAA, Revision adopted Dec 2018 (7b)
  • International Standard of Actuarial Practice 4, IFRS 17 Insurance Contracts, IAA, Nov 2019, pp. 1-9 (excluding sections 2.8 and 2.10) (7c)
  • General Insurance Financial Reporting Topics, Society of Actuaries, 5th Edition, 2021 (7c)
    • Ch. 14: The General Insurance Actuarial Opinion (excluding 14.2.6.1-14.3.6, 14.4 & 14.6-14.8)
  • IAA Risk Book: Materiality, Proportionality and Similar Terms, Insurance Regulation Committee, IAA, Apr 2023, pp. 2-10 (7d)

Source Material

Source Material

  • General Insurance Company Operations, SOA, May 2025
    • Outcomes 1a-g
  • Fundamentals of General Insurance Actuarial Analysis, Friedland, J., 2nd Edition, 2022
    • Ch. 29: Manual Ratemaking (1d)
    • Ch. 28: Rate Regulation (2a)
    • Ch. 24: Claim Liabilities (5d)
  • IAA Risk Book: Non-Life Perils and Coverages, Insurance Regulation Committee, International Actuarial Association, May 2023, sections 3-7, and 8.1-8.2
    • Outcomes 1h
    • Outcomes 2a, 2c
    • Outcomes 2e
    • Outcomes 3a
  • IAA Risk Book: Reinsurance, Insurance Regulation Committee, International Actuarial Association, May 2023, sections 2-4, 7 and 11
    • Outcomes 1i
    • Outcomes 2i
    • Outcomes 6a, c-d, f
  • Excerpts from Business Law for Insurance Professionals, Assignment 3, pp. 3.29-3.39 (begin on pp. 3.29 with “Financial Considerations in International Business”)
    • Outcomes 1j
    • Outcomes 3a, 3i
    • Outcomes 3f
  • The General Insurance Regulatory Environment, SOA, May 2025
    • Outcomes 2a-b
  • Insurance and the Discrimination Laws: Motor and Travel Insurance, Edmunds, T., House of Commons Library Standard Note SN04601, Mar 2013 (report dated Oct 2015), pp. 4-
    • Outcomes 2c
  • Usage Based Insurance and Telematics, SOA, May 2025
    • Outcomes 2d
  • Government Provision of General Insurance, SOA, May 2025, sections 1-3, 5, 6, and 9
    • Outcomes 2e
  • Private Flood Insurance and the National Flood Insurance Program, CRS Report R45242, Congressional Research Service, Updated Jan 2023, pp. 1-21 (excluding the section “NFIP Reauthorization and Legislation” on pp. 5-6, and Table 1 on pp. 9)
    • Outcomes 2e
  • Issues Paper: Use of Credit Scores by Insurers Canadian Council of Insurance Regulators, Credit Scoring Working Group, Jun 2011, pp. 5-16
    • Outcomes 2f
  • Price Optimization White Paper, Casualty Actuarial and Statistical (C) Task Force, National Association of Insurance Commissioners, Nov 2015, pp. 6-16 (paragraphs 15-49)
    • Outcomes 2g
  • Captive Insurance, SOA, May 2025
    • Outcomes 2h
  • Tort Law – Topics for General Insurance Actuaries, SOA, May 2025, sections 1-5 (excluding 5.1 & 5.5) Note: Regarding the table in 5.4 (pp. 35-37), candidates are only expected to be familiar with the cases BMW of North America v. Gore and State Farm Mutual Auto. v. Campbell.
    • Outcomes 3b-d, 3i
    • Outcomes 3i
  • Government Provision of General Insurance, SOA, Section 10, Appendix – No-Fault Insurance
    • Outcomes 3e
  • Social Inflation: Navigating the Evolving Claims Environment, The Geneva Association, Dec 2020 (pp. 6-17, 19-34 & 36-38)
    • Outcomes 3h-i
  • Behavioral Finance, J. Ritter, Pacific-Basin Finance Journal, Volume 11, Issue 4, Sep 2003, sections 1-3 (pp. 429-434)
    • Outcomes 4a
  • ALM Strategies for General Insurers, SOA, May 2025
    • Outcomes 4b
  • Ratemaking: A Financial Economics Approach, D’Arcy, S. and Dyer, M., 1997 Proceedings of the Casualty Actuarial Society, Volume LXXXIV, sections 1, 2, 4 & 6 Note: Sections 3 and 5 are not required reading but may be beneficial as background reading.
    • Outcomes 4c
  • IAA Risk Book: Liabilities for General Insurance, Insurance Regulation Committee, International Actuarial Association, May 2023 (pp. 2-22)
    • Outcomes 5a
  • General Insurance Financial Reporting Topics, Society of Actuaries, 5th Edition, 2021:
    • Ch. 1: Accounting Concepts for General Insurance (5b-c)
    • Ch. 2: Accounting for Insurance Contracts (excluding 2.3.3-2.3.4, 2.5.1-2.5.2.1, 2.7.2-2.7.4 & 2.8 after the Insight box on pp. 36) (5b-c)
    • Ch. 4: Accounting for Reinsurance Contracts (excluding 4.4.2, 4.6.3-4.6.5, 4.8.3 & 4.9) (5b-c)
    • Ch. 3: Accounting for Financial Instruments (excluding 3.4.3) (5e)
    • Ch. 10: Performance Measurement for General Insurers (excluding 10.4.3, and 10.8.3.1-10.9.1) (6a)
    • Ch. 11: Financial Ratios for Insurers (excluding 11.6.2, 11.7.1, 11.8, and 11.10-11.11) (6a-b)
    • Ch. 12: Solvency Monitoring (excluding 12.5.3, 12.9.2-12.9.3, 12.10.2, 12.11 and 12.13) (6c-e)
    • Ch. 13: General Insurance Financial Ratings (excluding sections 13.4.3-13.4.6.4, 13.5.2 and the first paragraph on page 376 after the Insight box) (6f)
    • Ch. 14: The General Insurance Actuarial Opinion (excluding 14.2.6.1-14.3.6, 14.4 & 14.6-14.8) (7c)
  • IAA Risk Book: Own Risk Solvency Assessment, Insurance Regulation Committee, International Actuarial Association, May 2023, pp. 3-19 (excluding sections 10.1 & 11)
    • Outcomes 6e
  • NAIC Own Risk and Solvency Assessment (ORSA) Guidance Manual, NAIC, as of Dec 2022, pp. 1-5 & 7-16
    • Outcomes 6e
  • Deriving Value from ORSA: Board Perspective, International Actuarial Association, Apr 2015, pp. 1-8
    • Outcomes 6e
  • IAA Risk Book: Professional Standards, Insurance Regulation Committee, IAA, May 2023, pp. 2-7
    • Outcomes 7a
  • International Standard of Actuarial Practice 1, General Actuarial Practice, IAA, Revision adopted Dec 2018
    • Outcomes 7b
  • International Standard of Actuarial Practice 4, IFRS 17 Insurance Contracts, IAA, Nov 2019, pp. 1-9 (excluding sections 2.8 and 2.10)
    • Outcomes 7c
  • IAA Risk Book: Materiality, Proportionality and Similar Terms, Insurance Regulation Committee, IAA, Apr 2023, pp. 2-10
    • Outcomes 7d