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LOMA 307 — Business and Financial Concepts for Insurance Professionals

Course Type: Course Portal
Topics: Finance & Accounting, Financial Services & Financial Planning, Life Insurance
Designations: ACS, ALMI, FLMI, PFSL
Language: Chinese (simplified), Chinese (traditional), English, French, Korean, Portuguese, Spanish


Overview

LOMA 307 introduces industry employees to basic financial concepts and terminology and relates these concepts to the business of insurance and company operations and profitability.

Topics

  • The Role of Insurance in the Economy
  • Insurance Company Management
  • Managing Solvency and Profitability
  • Product Design and the Time Value of Money
  • Achieving Operational Efficiency
  • How the Economy Affects Insurance Companies
  • Financial Reports and Plans
  • Understanding Financial Ratios
  • Presenting Data Visually
  • Analyzing
  • Population Data
  • Analyzing Sample Data

Chapter 1: The Role of Insurance in the Economy

The Economy

Economic Sectors

The Role of Money in the Economy

Market Participants

Markets

Flow of Funds

The Role of Financial Institutions in the Economy

Depository Institutions

Contractual Savings Institutions

Investment Institutions

Financial Needs of Households and Businesses

Cash Management and Credit

Asset Accumulation

Asset Protection

Asset Distribution

Changes in the Financial Services Industry

Chapter 2: Insurance Company Management

Insurance Company Structure

Requirements for Incorporation

Organizational Form

The Mission Statement

Managing Insurance Company Business

Planning

Organizing Operations

Controlling Performance

Chapter 3: Managing Solvency and Profitability

Basic Risk Management Techniques

Avoiding Risk

Controlling Risk

Accepting Risk

Transferring Risk

Insurance Regulation and Solvency

Minimum Reserve Requirements

Minimum Capital Standards

Managing Risks for Profitability

Investments for Life Insurers

The Risk-Return Trade-Off

The Required Rate of Return

Typical Risks that Insurers Manage

Return and Diversification

Asset-Liability Management (ALM)

Enterprise Risk Management (ERM)

Chapter 4: Product Design and the Time Value of Money

Financial Aspects of Product Development

Technical Product Design

Evaluating Product Performance

Interest

Interest Rates

Types of Interest

The Investment Period

The Time Value of Money

Calculating Future Values

Calculating Present Values

General Rules Governing Future Values and Present Values

Chapter 5: Achieving Operating Efficiency

Overview of Insurer Expenses

Investment Expenses

General and Administrative Expenses

Managing General Operating Expenses

Eliminating Expenses

Reducing Expenses

Managing Marketing and Distribution Expenses

Managing Commissions for Life Insurance Sales

Managing Commissions for Annuity Sales

Methods for Improving Operating Efficiency

Benchmarking

Total Quality Management

Six Sigma

Lean Management

Business Process Reengineering

The Employee’s Role in Supporting Operating Efficiency

Chapter 6: How the Economy Affects Insurance Companies

Measuring the Economy

Gross Domestic Product

The Unemployment Rate

The Business Cycle

Forecasting Business Cycles

How Changes in Price Levels Affect Insurance Companies

Inflation

Deflation

How Changes in Market Interest Rates Affect Insurance Companies

Effects of an Increase in Market Interest Rates

Effects of a Decrease in Market Interest Rates

Government Policy Options

Fiscal Policy

Monetary Policy

Chapter 7: Financial Reports and Plans

Financial Statements

The Income Statement

The Balance Sheet

Linking the Income Statement and the Balance Sheet

Other Financial Statements

Reports for Stakeholders and Regulators

The Annual Report

The Annual Statement

Budgets

Why Budget?

Budgeting Approaches

Types of Budgets

Chapter 8: Understanding Financial Ratios

Ratio Basics

Ratio Calculations

Ratio Analysis

Financial Ratios Used by Insurance Companies

Activity Ratios

Profitability Ratios

Solvency Ratios

Leverage Ratios

Interpreting the Numbers

Ratios Used for Formal Insurance Reporting

Regulatory Reporting

Investor Reporting

Chapter 9: Presenting Data Visually

Tables

Charts

Bar Charts

Pie Charts

Line Diagrams

Other Ways to Present Data Visually

Flow Charts

Project Scheduling Charts

Performance Management Charts

Avoiding Deceptive Uses of Visual Presentations

Chapter 10: Analyzing Population Data

Measures of Central Tendency

Mean

Median

Mode

Measures of Dispersion

Range

Variance

Standard Deviation

Improving the Value of Descriptive Statistics

Data Distributions

Normal Distributions

Non-Normal Distributions

Data Quality

Chapter 11: Analyzing Sample Data

Law of Large Numbers

Sampling

Probability Sampling

Nonprobability Sampling

Avoiding Sampling Bias

Using Sample Data to Estimate Population Characteristics

Calculating Sample Values

Fitting Sample Values to the Population

Using Sample Data to Forecast Behavior

Trend Analysis

Modeling

Glossary

Index

Course Format

Course Portals include the following elements:

  • PDFs of the assigned course materials that can be printed or read online
  • The same interactive Practice Questions and Sample Exams currently found in LOMA Test Preparation Guides (TPGs)
  • Recommended study plans to help learners set goals and manage their study schedule
  • A variety of additional media-oriented features designed to enhance the study and review process

Exam Format

The LOMA 307 exam has 60 questions and a time limit of 2 hours. It is available in I*STAR, Prometric and Paper exam formats.

Study Materials

Business and Financial Concepts for Insurance Professionals (LOMA, 2010)
ISBN 978-1-57974-349-9

Test Preparation Guide for LOMA 307 (LOMA, 2010)
ISBN 978-1-57974-350-5

Optional printed textbook (not included in bundled fee)

Business and Financial Concepts for Insurance Professionals (LOMA, 2010)
ISBN 978-1-57974-349-9
PBD Order # 307-10-10

About Bundled Study Materials

Some courses ("bundled courses") include study materials with your enrollment. A growing list of English-language courses include access to bundled study materials.

For some of these courses, once you enroll, you gain access to the study materials through your My Learning page in LOMANET. These include the Course Portal courses and the Need 2 Know courses.

How to Enroll

Enrolling for Exams and Bundled Courses

LOMA requires proctored examinations for many of its professional designation courses. Exams are administered in LOMA member organizations and in independent testing locations. This section provides information about exam formats, enrollment procedures for both exams and bundled courses, and exam fees.

LOMA exams vary in length from two–three hours. Consult your Test Preparation Guide (TPG) or see the Designation Study Materials Roadmap for specific information about the length of your exam. As new or revised LOMA courses are released, the number of examination questions for some course examinations may change. If you enroll for a bundled course delivered through a LOMA Course Portal, the assigned study materials are included in your enrollment and are accessible via the Course Portal. Your enrollment process will depend on the type of examination you choose to take:

LOMA offers two options for exam enrollment:

  • Online enrollment via LOMANET, our Internet-based education administration system
  • Enrollment forms for paper exams, for use by independent students only, can be found here.

I*STAR and Paper Exam Center Directories for testing at third-party locations

Retakes

Students who fail exams must pay full dates to retake the exams, in most cases. However, bundled courses (those courses that include exam fees and study materials) have a reduced rate to retake the exam. See LOMA’s Education & Training Catalog for fees.


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