LOMA 290 common mistakes
LOMA 290 · Understand the traps and how to avoid them.
Treating 'operations' as a single back-office function and answering questions about who performs a task with a generic 'the insurance company' rather than the specific operational area (underwriting, claims, actuarial, marketing/distribution, investment, accounting, reinsurance, legal/compliance, HR, IT) the scenario describes.
Candidates memorize the list of functional areas but never practice mapping a described activity to the correct area, so under exam pressure they default to a vague catch-all answer that sounds plausible.
What to do instead
Build a one-page mapping table: for each functional area, write its core decision, its primary output, and two activities that uniquely belong to it (e.g., claims = benefit determination and fraud referral; actuarial = pricing and reserve adequacy). Drill by reading short activity descriptions and naming the area before checking.
Confusing the roles of the board of directors, senior management, and functional managers when a question asks who is responsible for a governance or oversight action such as approving strategy, setting risk appetite, or implementing controls.
The governance hierarchy is taught as an org chart, so candidates recognize titles but not the decision rights attached to each level, and the answer choices all sound authoritative.
What to do instead
For each governance body, list what only it can do versus what it delegates. Practice classifying verbs: 'approve,' 'set appetite,' 'oversee' point upward; 'implement,' 'execute,' 'monitor daily' point downward. Answer by matching the verb in the stem to the level that owns it.
Mixing up the sequence and ownership of the underwriting and policy-issue workflow, for example placing policy issuance before underwriting approval or assigning premium collection to the wrong function.
The process is learned as a list of steps without the dependency logic, so when a question presents steps out of order or asks what happens next, candidates rely on surface familiarity rather than flow.
What to do instead
Draw the end-to-end flow from application receipt through underwriting decision, policy issue, delivery, and premium collection, marking the handoff point at each stage. Then answer sequencing questions by locating the named step on your diagram rather than by memory of the list.
Selecting an answer that describes what a function does in general instead of what the question's specific scenario requires, such as choosing 'investigates fraud' when the stem asks about the claims function's first response to a reported loss.
Answer choices are often all true statements about the same department, and candidates pick the most memorable or dramatic activity rather than the one that fits the scenario's stage.
What to do instead
Before reading the options, state the scenario's stage and the question's actual ask in your own words. Eliminate any option that is true but answers a different stage or a different question, even if it is a real function of the department.
Treating reinsurance as interchangeable with primary insurance, so questions about why an insurer cedes business, what a reinsurer actually assumes, or how reinsurance affects capacity and surplus are answered with primary-market reasoning.
Reinsurance appears briefly in the operations material and candidates skim it, missing that the insurer is the buyer and that the purpose is risk transfer and capacity, not selling coverage to consumers.
What to do instead
Write a short comparison covering who the parties are, what is transferred, and the effect on the ceding insurer's capacity and surplus. Then answer reinsurance items by first asking 'who is the customer here?' to keep the direction of the transaction straight.
Confusing the purpose of key financial statements and reports, for example reading the balance sheet as a measure of profitability over a period or treating the income statement as a snapshot of financial position.
Candidates memorize statement names and line items but not the time dimension or question each statement answers, and exam stems describe scenarios rather than naming the statement.
What to do instead
Anchor each statement to one question: balance sheet = what do we own and owe at a point in time; income statement = did we earn a profit over the period; cash flow = where did cash move. Practice by reading a scenario and naming the statement that would answer it before looking at choices.
Assuming every operational process is identical across product lines, so a question about a life insurance or annuity workflow is answered using property-casualty or health insurance logic, or vice versa.
Candidates study one product example in depth and generalize it, missing that underwriting information, claims triggers, and distribution differ materially by line.
What to do instead
For each major line, note the underwriting evidence used, the event that triggers a claim, and the typical distribution channel. When a stem names a product, check your line-specific notes before reasoning, and flag any answer that only makes sense for a different line.
Answering compliance and market-conduct questions by choosing the most customer-friendly option rather than the one that reflects the actual regulatory obligation, such as assuming a specific disclosure timing or approval requirement without knowing it.
Candidates substitute intuition about fairness for knowledge of the regulatory framework, and the plausible-sounding choice often is not the required behavior.
What to do instead
Build a short list of concrete obligations you can state precisely (who must be licensed, what must be disclosed and when, recordkeeping and reporting duties) and mark any item you cannot verify. For unverified specifics, reason from the purpose of the rule and eliminate options that conflict with it, rather than guessing a number or deadline.
Overlooking the role of information systems and data controls in operations questions, answering that a control is a person's responsibility when the scenario hinges on system access, data integrity, or segregation-of-duties enforced through systems.
Candidates think of operations as people and paperwork and skip the technology-and-controls material, so system-related options look like distractors.
What to do instead
Review internal-control concepts as they apply to systems: authorization, segregation of duties, access limits, and data accuracy. For each control scenario, ask 'what prevents this error or fraud, and is it a person, a system, or both?' before choosing.
Rushing scenario-based items by pattern-matching a keyword in the stem to a memorized definition, then moving on without checking that the chosen option answers the exact question asked.
The exam rewards recall speed, and many stems share vocabulary with definitions, so candidates answer the definition they recognize rather than the scenario presented.
What to do instead
Use a fixed routine on every scenario item: identify the function, identify the stage or decision, restate the ask, then evaluate each option against that restatement. Practice under timed conditions so the routine becomes automatic rather than something you skip when rushed.