FSA courses

ILA 101

Pricing and Introduction to Valuation and Risk Management

2 discussions

Explanation

ILA 101: An experience study needs an exposure definition

Observed death or lapse counts require a denominator matching the time and population at risk. Differences in age, duration and underwriting mix can distort raw comparisons.

Original practice scenario

For an original mortality comparison, two groups have the same crude death rate but different age distributions. Standardise or segment before drawing a conclusion. Record data period, exposure definition and exclusions, and explain how the result informs an assumption rather than declaring it automatically equal to that assumption.

Study check

Write the assumptions, the decision being supported and one limitation. Use the current course syllabus for the required terminology and scope; this introductory guide is not a complete course summary.

Reading sources

Official syllabus and resources

ActNet editorial guide · October 1, 2026 · Original illustrative examples.

0 repliesOct 1

Explanation

ILA 101: A lapse sensitivity depends on the product’s cash flows

Higher lapse can hurt acquisition-cost recovery but release future guarantees or benefits. The net direction is product-dependent. Explain the mechanism instead of attaching a universal favourable or adverse label.

Original practice scenario

In an original product, expenses occur at issue and premiums arrive later. Increase early lapse and trace the lost future premiums and avoided future costs separately. Then compare with a product carrying an expensive guarantee to explain why the direction can differ.

Study check

Reading sources

Official syllabus and resources

ActNet editorial guide · October 1, 2026 · Original illustrative examples.

0 repliesOct 1