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AAPA 303 — Annuity Systems and Administration

Course Type: Traditional Designation Course
Topics: Operations & Administration, Retirement & Annuities
Designations: AAPA, ACS
Language: English


AAPA 303 describes the tasks involved in annuity administration and the various internal, regulatory, and market factors that affect these tasks. In addition, the course discusses the important role of information technology in annuity administration.


  • Introduction to Annuity Administration
  • New Business Processing
  • Additional New Business Procedures
  • In-Force Administration
  • Surrenders, Free-Look Cancellations, and Conservation
  • Withdrawals, Loans, and Death Benefit Payments
  • Payout Administration
  • The Annuity Customer Contact Center
  • Information Technology and Annuity Administration
  • Electronic Commerce and Annuity Administration

CHAPTER 1: Introduction to Annuity Administration

Annuity Basics

Types of Annuities and How They Work

Annuity Administration

Recording Information

Processing Transactions

Furnishing Contracts and Information

Disbursing Money

Helping Customers

What to Expect in This Book

CHAPTER 2: Annuity Administration Inside and Out

Organizing Annuity Administration

Organization by Function

Organization by Communication Channel

Organization by Product

Organization by Customer

Hybrid Organizational Structures

Interactions with Other Areas

Mail Room



Legal and Compliance

Product Development

Human Resources and Training

Information Technology

Factors That Affect Annuity Administration

Contract Specifications

Legal and Regulatory Issues

Business Issues

CHAPTER 3: New Business Processing

Basic New Business Processing

New Business Processing Steps

Alternative Approaches to New Business Processing

App-Later and App-Less Issue

Instant Issue

CHAPTER 4: Additional New Business Procedures

New Business Procedures for Replacements and Section 1035 Exchanges

New Business Procedures for External Replacements

State Replacement Regulations

New Business Procedures for Internal Replacements

New Business Procedures for Tax-Advantaged Annuities


New Business Procedures for Immediate Annuities

CHAPTER 5: In-Force Administration

Basic Transaction-Processing Steps

Authenticating the Request

Updating the Computer Record

Confirming the Transaction

Transaction-Processing Activities

Account Maintenance

Additional Contributions

Changes in Existing Investment Allocations


Handling Written Communications

Communications Related to Variable Annuities

Contract-Related Communications

Tax-Related Communications

Assessing Fees

Administrative Fees

Mortality and Expense Risks (M&E) Charges

Asset Management Fees

12b-1 Fees

Surrender Charges, Back-End Loads, and Front-End Loads

CHAPTER 6: Surrenders, Free-Look Cancellations, and Conservation

Key Disbursement Activities

Authenticating the Request and Obtaining Required Documents

Determining the Amount to Be Disbursed

Addressing Tax Issues

Making the Payment

Cash Surrenders

Obtaining Required Documents for Cash Surrender Requests

Determining Cash Surrender Values

Addressing Cash Surrender Tax Issues

Making Cash Surrender Payments

Section 1035 Exchanges

Obtaining Required Documents for Section 1035 Requests

Determining Section 1035 Surrender Values

Addressing Section 1035 Tax Issues

Making Section 1035 Payments


Obtaining Required Documents for Rollover Requests

Determining Rollover Surrender Values

Addressing Rollover Tax Issues

Free-Look Cancellations


Reactive Conservation

Proactive Conservation

CHAPTER 7: Withdrawals, Loans, and Death Benefit Payments


Unscheduled Withdrawals

Scheduled Withdrawals

Loans under Employer-Sponsored Retirement Plans

Death Benefits

Authenticating the Claim

Determining the Amount of the Death Benefit

Addressing Applicable Tax Issues

Paying the Death Benefit

Special Death Claim Situations

CHAPTER 8: Payout Administration

Payout Options

Lump-Sum Distributions

Fixed Period and Fixed Amount Payout Options

Life Annuities

Commutation Right

Fixed and Variable Payment Options

Setting Up an Annuity for Payout Administration

Immediate Annuities

Deferred Annuities


Authenticating Requests and Obtaining Required Documents

Administering Payments

Confirming Transactions

Making Address Changes

Addressing Tax Issues

Contract Terminations and Death of the Annuitant

CHAPTER 9: The Annuity Customer Contact Center

The Purpose of the Customer Contact Center

Providing Information

Performing Transactions

Handling Complaints/Resolving Problems

Building Long-Term Customer Relationships

Customer Contact Center Performance Measures




Customer Satisfaction

Complaint Monitoring

Customer Contact Center Operations


Organization and Processes


CHAPTER 10: Information Technology and Annuity Administration

The Importance of Information Technology to Annuity Administration



Customer Service

Cost Savings

Annuity Administration Systems

The Technology Platform

Applications Software

Choosing an Administration System





Tools for Enhancing Annuity Administration

Document Management Systems

Automated Workflow Systems

Other Tools for Enhancing Annuity Administration

CHAPTER 11: Electronic Commerce and Annuity Administration

Levels of e-Commerce

Electronic Annuity Applications

Business-to-Business e-Commerce

E-Commerce Challenges and Choices

The Internet and Private Networks

Data Standards

Systems Integration

Secure Information and Transactions

The Role of Clearinghouses and Technology Vendors in B2B e-Commerce



Course Format

AAPA 303 will be offered only through the end of 2015.

Study materials include print textbooks and Test Preparation Guides (TPGs) with printed and electronic versions of the course's Practice Questions and Sample Exam. Enrollment for an I*STAR, Prometric or Paper exam is purchased separately through LOMANET.

Exam Format

The AAPA 303 exam has 50 questions and a time limit of 2 hours. The exam is available in I*STAR and Prometric only.

Study Materials

Annuity Systems and Administration, Second Edition (LOMA, 2004)
ISBN 1-57974-207-6
PBD Order # 303-10-04

Test Preparation Guide for AAPA 303 (LOMA, 2004)
ISBN 1-57974-208-4
PBD Order # 303-40-04

Ordering printed study materials

For the United States and Canada, you can order study materials for designation courses through PBD by using the form and information below:


PBD Worldwide
P.O. Box 930108
Atlanta, Georgia 31193-0108
Tel: 1-800-887-3723 or 770-280-4178
Fax: 770-280-4150

Additional textbook order forms

Forms include applicable mailing and contact information


Note: Most of the courses require a textbook and a Test Preparation Guide (TPG). Be sure to order all assigned materials as listed in the Education and Training Catalog. Students are responsible for ordering the correct study materials.

How to Enroll

Traditional Course Access

LOMA's traditional-access designation courses teach industry topics using printed study materials and proctored examinations. Study materials include print textbooks and Test Preparation Guides (TPGs) with printed and electronic versions of the course's Practice Questions and Sample Exam. Enrollment for an I*STAR, Prometric or Paper exam is purchased separately through LOMANET.

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