Understanding actuarial practice

New required text for the FAP Modules, as of January 31, 2012. A critical point in an actuary's education is the transition from understanding the mathematical underpinnings of actuarial science to putting them into practice. The problems become less well-defined and the solutions less clear-cut. Understanding Actuarial Practice is designed to aid that transition in four of the areas in which actuaries practice: investments, life insurance and annuities, retirement benefits, and health insurance. In each area students are introduced to the products that are delivered in each area and the relevant methods with regard to pricing, reserving and funding. Examples are supported by readily available spreadsheets and there are numerous exercises that reinforce the concepts. While written expressly for use in the Society of Actuaries Fundamentals of Actuarial Practice Course, this book is a valuable resource for anyone who desires to learn how actuarial principles are put into practice.

Introduction -- Actuarial science and the actuarial profession -- The actuarial control cycle -- Principles of actuarial science -- Interest theory -- Asset types -- Investing / Portfolio Management -- Finance models and data -- The term structure of interest rates -- Asset and liability management -- Introduction -- Types of coverage -- External forces and life and annuity products -- Pricing -- Profit testing -- Inputs for profit testing -- Regulatory influences on profit testing -- Monitoring results -- Closing -- Overview of retirement financial security systems -- Retirement plan design -- Funding for employer-sponsored retirement plans -- Pension accounting in the united states -- Modeling actuarial costs and expense -- Retirement plan solvency -- Introduction to group insurance -- External factors -- Pricing for group benefit plans -- Reserving