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LOMA 307 — Business and Financial Concepts for Insurance Professionals

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


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.


  • 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


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


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 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


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



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


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



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




Measures of Dispersion



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


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




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

Ordering printed study materials

Most Course Portals include online access to the course’s study materials and do not require purchase of additional printed study materials. However, you can order printed study materials for some designation courses (for an additional cost) via LOMA’s learning system, or by using the textbook order form and information below:

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


How to Enroll

Enrolling in Courses with Proctored Exams

LOMA requires proctored examinations for many of its professional designation courses. Study materials for these courses are delivered via online Course Portal, and enrollment in the Course Portal also includes enrollment in one of our proctored exam options for the course. Proctored exams are administered in LOMA member organizations and in independent testing locations around the globe. LOMA exams vary in length from two–three hours. Consult the Designation Study Materials Roadmap for specific information about the length of your exam.

Proctored examinations can take one of three forms:

Enrollment Step-by-Step

  1. Log in to your LOMA Learning account using your login ID and password.
  2. Browse the Learning Catalog for the course for which you would like to enroll.
  3. Select ADD TO CART next to the items for which you would like to enroll.
  4. Choose Exam Type — you must choose between Prometric, I*STAR, or Paper Exam enrollment.
    • Select Exam Site — your company’s primary exam site (if applicable) will appear on the screen. To see other available exam sites, click “Search.”
    • Note for Independent Students: Click “Include 3rd party exam sites” to find open exam sites offered by other companies. More information on Independent Student enrollment.
    When you have selected an exam site, click “Save.”
  5. Return to the catalog to continue searching for courses and add additional items to your shopping cart, or click the shopping cart to check out.
    • If you have not already done so, you will be prompted to log in to the LOMA learning system at this time. Once you have successfully logged in, click the shopping cart again to begin the checkout process.
  6. Review your shopping cart. Click CHECK OUT to proceed.
  7. If you are purchasing a physical product (example: a textbook), complete the SHIPPING information screen.
  8. Enter payment information
    • If your company has set up direct billing with LOMA, an account code will appear next to the “Bill My Company” field.
    • If you are using direct-to-company billing method, ensure that the radio button next to the “Bill My Company” field is selected and then click “Next” to continue.
    • If you are paying for your enrollment by credit card, enter all of the required fields for a credit card transaction. Once you have provided all of the required information, click “Next” to continue.
  9. Review your order, accept LOMA’s Terms and Conditions, and click BUY NOW. An enrollment confirmation will be emailed to you.

See the LOMA 307 video
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