IAI SA2 study guide
IAI SA2 · Work through your exam, one topic at a time.
SA2 (Life Insurance) is the specialist-principles subject in the Institute and Faculty of Actuaries' Fellowship pathway. It is aimed at actuaries who already hold the core technical and core applications subjects and now want to apply that toolkit to a life insurer end to end: products and regulation, financial reporting, pricing and contract design, valuation and solvency, asset-liability management, risk and capital management, mergers and restructuring, corporate strategy, and the professional and ethical judgements that run through all of them. The IAI SA2 study guide has 10 sections and about 2,490 words.
01Life Insurance Products and Their Regulation
This domain tests how Indian life products are designed, filed and sold within IRDAI's product regime - features, mandatory benefits and filing discipline. Indian life products include conventional non-linked (term, endowment, whole life, money-back), linked ULIPs, annuities/pensions, group and micro-insurance, plus riders.
314 words, about 2 min02Life Insurance Company Accounts and Reporting
This domain examines how a life insurer's statutory accounts separate policyholders' and shareholders' money and how actuarial liabilities enter the financial statements. The IRDAI (Preparation of Financial Statements and Auditor's Report of Insurance Companies) Regulations, 2002 prescribe the Revenue Account, Profit and Loss Account, Balance Sheet and Cash Flow Statement.
303 words, about 2 min03Life Insurance Contract Design and Pricing
This domain tests how product promises become premiums, reserves and profit, including assumption-setting, profit testing and regulatory charge limits. A pricing model projects premiums, claims, surrenders, expenses, commissions, reinsurance and investment return, then deducts reserves to obtain profit.
247 words, about 1 min04Life Insurance Company Valuation and Solvency
This domain covers statutory valuation of liabilities and the solvency margin that determines whether an insurer can continue writing business. Under the IRDAI (Assets, Liabilities and Solvency Margin) Regulations, 2016, insurers value mathematical reserves using prudent assumptions for mortality, interest, expenses and lapse, with margins for adverse deviation.
240 words, about 1 min05Life Insurance Company Asset-Liability Management
This domain tests whether assets are managed to meet liability cash flows and risk characteristics, not merely to maximise return. Life liabilities are long-tailed and sensitive to interest rates, inflation and longevity.
226 words, about 1 min06Life Insurance Company Risk Management
This domain examines how insurers identify, measure, control and report the risks created by life insurance and by their own decisions. Key risks include mortality, morbidity, longevity, lapse, expense, investment/market, credit, liquidity, operational, legal, reputational, strategic and group risk.
246 words, about 1 min07Life Insurance Company Capital Management
This domain tests how insurers source, allocate and deploy capital to support solvency, growth and shareholder return. Regulatory capital is driven by the 150% solvency requirement, while economic capital reflects the insurer's own risk measure, often a 99.5% confidence level.
225 words, about 1 min08Life Insurance Company Mergers, Acquisitions and Restructuring
This domain covers buying, selling, merging and restructuring life insurers, with policyholder protection and regulatory approval at the centre. A transfer or amalgamation of life insurance business requires a scheme and approval under Section 35 of the Insurance Act, 1938, including IRDAI scrutiny and sanction.
234 words, about 1 min09Life Insurance Company Management and Strategy
This domain tests how life insurers set strategy, organise distribution and manage performance within regulation and customer expectations. Strategy covers product mix, distribution (agency, bancassurance, brokers, direct and digital), expense efficiency, retention, customer service, technology and capital allocation.
222 words, about 1 min10Professional and Ethical Considerations
This domain tests the professional standards expected of actuaries, especially the appointed actuary, when judgement, pressure and policyholder interests collide. The Actuaries Act, 2006 and the Institute of Actuaries of India govern professional conduct.
233 words, about 1 min