Actuarial Notes

Exam ILA-201I

ILA 201-I – Valuation and Advanced Product and Risk Management, International is an exam of the Society of Actuaries' Fellowship (FSA) pathway. Its syllabus covers the Nov 2026/Mar 2027/Jul 2027 sittings.

Learning Objectives

International Financial Reporting Requirements (40–50%) The candidate will understand and apply valuation principles to individual life insurance and annuity products issued by international life insurance companies.

  1. Describe the appropriate IFRS 17 accounting and valuation standards for life insurance and annuity products
  2. Evaluate the appropriate IFRS 17 accounting and valuation standards for life insurance and annuity products

Readings:

  • ILA201-600-25: International Actuarial Note 100: Application of IFRS 17 (Ch. 1, section A – Introduction to GMM only, Ch. 5, 7-9 & 16) (1a, 1b)
  • CIA Educational Note: IFRS 17 Risk Adjustment for Non-Financial Risk for Life and Health Insurance Contracts, Jun 2022 (1a, 1b)
  • ILA201-601-25: The IFRS 17 Contractual Service Margin: A Life Insurance Perspective (Sections 2-4.8) (1a, 1b)
  • CIA Educational Note: IFRS 17 Coverage Units for Life and Health Insurance Contracts, Dec 2022 (1a, 1b)
  • CIA Educational Note: IFRS 17 Estimates of Future Cash Flows for Life and Health Insurance Contracts, Jun 2022 (1a, 1b)
  • CIA Educational Note: IFRS 17 Discount Rates for Life and Health Insurance Contracts, Jun 2022 (1a, 1b)
  • IFRS 17: Reinsurance Contracts Held and Loss-Recovery Component, SOA Reinsurance News, Feb 2021 (1a, 1b)
  • IFRS 17 Spreadsheet Model (1a, 1b)
  • CIA Educational Note: IFRS 17 Market Consistent Valuation of Financial Guarantees for Life and Health Insurance Contracts, Jun 2022 (1a, 1b)
  • CIA Educational Note: IFRS 17 – Fair Value of Insurance Contracts, Jun 2022 (1a, 1b)
    • Companion Excel Spreadsheet: Educational Note: IFRS 17 – Fair Value of Insurance Contracts
  • ILA201-602-25: OSFI B-3 Sound Reinsurance Practices and Procedures (1a, 1b)
  • ILA201-603-25: OSFI Guideline E15: Appointed Actuary – Legal Requirements, Qualifications and External Review, Aug 2023 (1a, 1b)

Capital Management (20–30%) The candidate will understand international capital requirements, the approaches and tools of financial capital management for international life insurance companies.

  1. Explain and calculate regulatory capital using various international frameworks
  2. Explain and evaluate the respective perspectives of regulators, investors, policyholders and insurance company management regarding the role and determination of capital
  3. Describe the purpose and application of economic capital

Readings:

  • Regulatory Capital Adequacy for Life Insurance Companies: A Comparison of Four Jurisdictions, SOA Research Institute, Jul 2023 (2a)
    • Companion Excel Spreadsheet: Comparison of Jurisdictions Tool
  • ILA201-604-25: OSFI Guideline – Life Insurance Capital Adequacy Test (LICAT), November 2024, Ch. 1-6 (excluding Sections 4.2-4.4) (2a)
  • ILA201-605-25: OSFI Guideline A-4 Internal Target Capital Ratio for Insurance Companies, Dec 2017 (2a)
  • A Multi-Stakeholder Approach to Capital Adequacy, Conning Research, Actuarial Practice Forum (2b)
  • Economic Capital for Life Insurance Companies, SOA Research Paper, Oct 2016 (only sections 2 & 6) (2c)

Management and Evaluation of Life Insurance Risks (10–15%) The candidate will understand various approaches to manage and evaluate life insurance risks.

  1. Analyze the impact of risk diversification, including considerations for modeling and offsets between mortality and longevity risk
  2. Understand the role and framework used by regulators and credit rating agencies for evaluating life insurance companies
  3. Explain and understand the use and application of the Own Risk Solvency Assessment (ORSA) report

Readings:

  • ILA201-100-25: Diversification: Consideration on Modelling Aspects & Related Fungibility and Transferability, CRO Forum, Oct 2013 (pp. 1-18) (3a)
  • CIA Educational Note: Financial Condition Testing, Jan 2023 (Appendix A only) (3a, 3b)
  • Rating Agency Perspectives on Insurance Company Capital, SOA Research Institute, Aug 2023 (excluding Appendices) (3b)
  • ILA201-606-25: OSFI: Own Risk and Solvency Assessment (E-19) (3c)

Advanced Product Management (20–30%) The candidate will understand value creation and inforce management techniques for life and annuity products.

  1. Describe and evaluate fundamental strategies for enhancing value and profitability through active in-force and operational management
  2. Describe, evaluate, and apply the economic value creation framework
  3. Recommend and justify changes to policyholder dividends
  4. Understand corporate taxation, policyholder taxation and calculate investment income tax
  5. Describe and apply the methods and principles of embedded value for an insurance enterprise

Readings:

  • ILA201-101-25: Life in-force Management: Improving Consumer Value and Long-Term Profitability (4a)
  • ILA201-102-25: Economics of Insurance: How Insurers Create Value for Shareholders, pp. 4-31 (4b)
  • Mechanics of Dividends, SOA Research Institute, Mar 2022 (4c)
  • Canadian Insurance Taxation, Swales, et. al., 4th Edition, 2015 (4d)
    • Ch. 4: Income for Tax Purposes – General Rules
    • Ch. 5: Investment Income
  • ILA201-607-25: IFRS 17 and Navigating Financial Condition Testing (4d)
  • ILA201-608-25: IFRS 17: Tax and the Contractual Service Margin (4d)
  • ILA201-609-25: Impact of 2017 Tax Changes on Life Insurance (4d)
  • Canadian Insurance Taxation, Swales, et. al., 4th Edition, 2015 (4d)
    • Ch. 9: Investment Income Tax
  • Embedded Value: Practice and Theory, Actuarial Practice Forum, Mar 2009 (4e)

Source Material

Source Material

  • ILA201-600-25: International Actuarial Note 100: Application of IFRS 17 (Ch. 1, section A – Introduction to GMM only, Ch. 5, 7-9 & 16)
    • Outcomes 1a, 1b
  • CIA Educational Note: IFRS 17 Risk Adjustment for Non-Financial Risk for Life and Health Insurance Contracts, Jun 2022
    • Outcomes 1a, 1b
  • ILA201-601-25: The IFRS 17 Contractual Service Margin: A Life Insurance Perspective (Sections 2-4.8)
    • Outcomes 1a, 1b
  • CIA Educational Note: IFRS 17 Coverage Units for Life and Health Insurance Contracts, Dec 2022
    • Outcomes 1a, 1b
  • CIA Educational Note: IFRS 17 Estimates of Future Cash Flows for Life and Health Insurance Contracts, Jun 2022
    • Outcomes 1a, 1b
  • CIA Educational Note: IFRS 17 Discount Rates for Life and Health Insurance Contracts, Jun 2022
    • Outcomes 1a, 1b
  • IFRS 17: Reinsurance Contracts Held and Loss-Recovery Component, SOA Reinsurance News, Feb 2021
    • Outcomes 1a, 1b
  • IFRS 17 Spreadsheet Model
    • Outcomes 1a, 1b
  • CIA Educational Note: IFRS 17 Market Consistent Valuation of Financial Guarantees for Life and Health Insurance Contracts, Jun 2022
    • Outcomes 1a, 1b
  • CIA Educational Note: IFRS 17 – Fair Value of Insurance Contracts, Jun 2022
    • Companion Excel Spreadsheet: Educational Note: IFRS 17 – Fair Value of Insurance Contracts (1a, 1b)
  • ILA201-602-25: OSFI B-3 Sound Reinsurance Practices and Procedures
    • Outcomes 1a, 1b
  • ILA201-603-25: OSFI Guideline E15: Appointed Actuary – Legal Requirements, Qualifications and External Review, Aug 2023
    • Outcomes 1a, 1b
  • Regulatory Capital Adequacy for Life Insurance Companies: A Comparison of Four Jurisdictions, SOA Research Institute, Jul 2023
    • Companion Excel Spreadsheet: Comparison of Jurisdictions Tool (2a)
  • ILA201-604-25: OSFI Guideline – Life Insurance Capital Adequacy Test (LICAT), November 2024, Ch. 1-6 (excluding Sections 4.2-4.4)
    • Outcomes 2a
  • ILA201-605-25: OSFI Guideline A-4 Internal Target Capital Ratio for Insurance Companies, Dec 2017
    • Outcomes 2a
  • A Multi-Stakeholder Approach to Capital Adequacy, Conning Research, Actuarial Practice Forum
    • Outcomes 2b
  • Economic Capital for Life Insurance Companies, SOA Research Paper, Oct 2016 (only sections 2 & 6)
    • Outcomes 2c
  • ILA201-100-25: Diversification: Consideration on Modelling Aspects & Related Fungibility and Transferability, CRO Forum, Oct 2013 (pp. 1-18)
    • Outcomes 3a
  • CIA Educational Note: Financial Condition Testing, Jan 2023 (Appendix A only)
    • Outcomes 3a, 3b
  • Rating Agency Perspectives on Insurance Company Capital, SOA Research Institute, Aug 2023 (excluding Appendices)
    • Outcomes 3b
  • ILA201-606-25: OSFI: Own Risk and Solvency Assessment (E-19)
    • Outcomes 3c
  • ILA201-101-25: Life in-force Management: Improving Consumer Value and Long-Term Profitability
    • Outcomes 4a
  • ILA201-102-25: Economics of Insurance: How Insurers Create Value for Shareholders, pp. 4-31
    • Outcomes 4b
  • Mechanics of Dividends, SOA Research Institute, Mar 2022
    • Outcomes 4c
  • Canadian Insurance Taxation, Swales, et. al., 4th Edition, 2015
    • Ch. 4: Income for Tax Purposes – General Rules (4d)
    • Ch. 5: Investment Income (4d)
    • Ch. 9: Investment Income Tax (4d)
  • ILA201-607-25: IFRS 17 and Navigating Financial Condition Testing
    • Outcomes 4d
  • ILA201-608-25: IFRS 17: Tax and the Contractual Service Margin
    • Outcomes 4d
  • ILA201-609-25: Impact of 2017 Tax Changes on Life Insurance
    • Outcomes 4d
  • Embedded Value: Practice and Theory, Actuarial Practice Forum, Mar 2009
    • Outcomes 4e