SA2 2019

Hi

The SA2 course objective has changed and students are now required (as part of the objective) to be able to apply knowledge of the life insurance environment in, not only the UK, but other jurisdictions.
This has been fed through many of the CMP chapters with the provision of examples of these different jurisdictions. There are however several chapters where it is based on the UK practice, as such there are little changes to these chapters.
The SA2 course now consists of 24 chapters (excluding introduction and glossary) spread over six parts.

Part 1:
Part 1 will still begin with two chapters describing the major life insurance products beyond the general descriptions provided in SP2 (previously ST2). These products will no longer be constrained to those sold in the UK, with the main additional material being a new section on universal life insurance.

There is an additional chapter describing the main features of the four main life insurance product bases and their risks to policyholders and the insurer. The main new material here is the expansion of coverage of with-profits business beyond just the ‘additions to benefits’ surplus distribution method, to include now also the revalorisation and contribution methods.

The chapter assessing the effects of the general business environment on the management of life insurance business remains, but has been materially rewritten. This chapter will include some UK examples but has been expanded to include examples from other jurisdictions, and the concepts will need to be applied widely.

The Contract and trust law chapter has been renamed Legislation. Material on UK contract and trust law has been removed and the chapter now covers just consumer protection legislation and equality legislation, with less of a UK-specific focus.

Part 2:
Part 2 now includes the tax chapters which fall across three chapters as opposed to four. These chapters remain based on the UK tax regime: Policyholder taxation, Life insurance company taxation and Allowing for tax. The latter expands on the previous Chapter 8 (Tax allowance in unit pricing). In this chapter, the amount of detail on allowing for tax in unit pricing has been reduced, but new material has been included on how to charge tax to with-profits funds and setting up deferred tax liabilities (or assets) for reporting purposes (including Solvency II).

The Regulatory environment chapter has been materially rewritten and now covers regulatory frameworks in other jurisdictions as well as the UK and EU.

There are still two chapters covering solvency assessment and a lot of the material is unchanged, covering the Solvency II assessment in detail. However, there is additional material covering the relevant Syllabus Objective –‘to compare solvency assessment approaches between different jurisdictions.’ The chapter will include examples of how solvency assessment is performed in other countries, including comparisons with Solvency II.

Part 3:
This part starts with the Professional standards and guidance chapter. This is broadly unchanged with the UK actuarial professional standards being presented as the main example, although there is a new section on international actuarial profession standards.

The Treating customers friendly chapter has a reduced on UK specifics. The chapter continues to look at the regulatory background to treating customers fairly, and the matters to be considered when addressing treating customers fairly issues, with the UK approach continuing to be included as an example. However, the material has been extended to consider how treating customers fairly is approached in a range of global jurisdictions.

The remainder of this part covers Capital management and Asset-liability management. These chapters have relatively few changes.

Part 4:
Part 4 starts with the Analysis of surplus chapter. The basics are broadly unchanged, but there are amendments to make the material relevant to any type of supervisory valuation, not just an analysis of surplus arising under the Solvency II approach (although this is still considered).

The Profit reporting chapter has been materially rewritten. It no longer contains the detail on UK GAAP, and the detail on US GAAP and IFRS is expanded; in particular, there is now a section on IFRS 17 (Insurance contracts).

The chapter on Embedded value has been renamed and has also been materially rewritten. In particular, the content has been amended so that it is relevant to any jurisdiction, whether performing embedded value calculations on a traditional, European or market-consistent basis, and whether performing solvency (and therefore free surplus) assessment on a Solvency II or other (eg prudential) basis.

Part 5:
The first three chapters of this part covers the management of with-profits business.

The Asset shares chapter has relatively few changes.

The Surplus distribution chapter has been expanded to include other ways (as well as the UK’s ‘additions to benefits’ method) to distribute surplus within different jurisdictions.

The Management of with-profits business chapter includes the majority of the material from the previous Management of UK with-profits funds chapter, with an additional section on comparing the regulatory requirements for distribution and general with-profits governance across jurisdictions.

The Risk management and controls chapter has relatively few changes, mostly being a revision (or removal) of material that was previously UK specific, particularly in the section on the management of insurance risk.

Part 6:
The (renamed) Product design and pricing chapter is now applicable to marketing in different jurisdictions, but otherwise is relatively unchanged from the previous version.

The Problem solving chapter remains broadly unchanged.

The Glossary has been updated to reflect the reduced UK focus of the rest of the material.

There are still six assignments which cover the above six parts respectively.

Hope this helps