What Is SOA Exam FAM?

SOA Exam FAM (Fundamentals of Actuarial Mathematics) is a 3.5-hour, 35-question multiple-choice exam administered by the Society of Actuaries (SOA). It tests foundational actuarial mathematics covering both short-term (general insurance) and long-term (life insurance and annuities) topics. Exam FAM has a pass rate of approximately 45 to 50% (SOA).

Exam FAM was introduced as part of the SOA's curriculum redesign and replaces introductory material that was previously tested on the separate Exams STAM (Short-Term Actuarial Mathematics) and LTAM (Long-Term Actuarial Mathematics). The redesign consolidated foundational material into FAM, while advanced material moved to Exam ALTAM (Advanced Long-Term) and Exam ASTAM (Advanced Short-Term).

Quick Facts

| Detail | Info |
|--------|------|
| Governing Body | Society of Actuaries (SOA) |
| Exam Format | Computer-based, multiple choice (5 choices) |
| Number of Questions | 35 |
| Duration | 3.5 hours (210 minutes) |
| Pass Rate | Approximately 45 to 50% (SOA) |
| Registration Fee | Approximately $300 (SOA) |
| Calculator | TI BA-II Plus or Casio ClassPad |
| Next Exam Window | Offered via computer-based testing year-round |

Who Takes This Exam?

Exam FAM is taken by actuarial candidates who have typically passed Exams P and FM and are progressing through the SOA preliminary exam sequence. It is commonly the third or fourth exam candidates attempt.

The material is distinctly actuarial. Unlike Exams P (probability) and FM (financial mathematics), which cover topics shared with other quantitative fields, Exam FAM is where candidates first encounter insurance-specific models: loss distributions, life tables, life insurance present values, and reserving.

For many candidates, FAM is the exam that starts to feel like "real" actuarial work.

How FAM Replaced STAM and LTAM

Before the curriculum change, the SOA offered:

  • Exam STAM (Short-Term Actuarial Mathematics) covering loss models, frequency/severity, aggregate claims, credibility, and ratemaking
  • Exam LTAM (Long-Term Actuarial Mathematics) covering survival models, life insurance, life annuities, and reserving

The SOA split this material into three exams:

  • Exam FAM (Fundamentals) covers the introductory portions of both STAM and LTAM
  • Exam ALTAM (Advanced Long-Term) covers advanced life contingencies, multi-state models, and pension mathematics
  • Exam ASTAM (Advanced Short-Term) covers advanced loss models, credibility theory, and ratemaking

Candidates choose either ALTAM or ASTAM as their advanced exam, depending on their career path. FAM is required for everyone.

Key Concept

Exam FAM is broader but shallower than the old STAM or LTAM exams. You need to cover both short-term and long-term material, but at a foundational level. The advanced depth comes in ALTAM or ASTAM.

Exam Structure and Format

Exam FAM covers five major topic areas (SOA):

Short-Term Actuarial Mathematics (~50%)

  • Severity models - parametric distributions (exponential, Pareto, gamma, Weibull, lognormal), moments, limited expected values, excess loss
  • Frequency models - Poisson, negative binomial, binomial distributions
  • Aggregate loss models - compound distributions, normal approximation, stop-loss premiums
  • Coverage modifications - deductibles, policy limits, coinsurance, inflation effects
  • Risk measures - VaR, TVaR, and their applications

Long-Term Actuarial Mathematics (~50%)

  • Survival models - life table functions, force of mortality, fractional age assumptions, select and ultimate tables
  • Life insurance present values - whole life, term life, endowment, and deferred insurance. Expected present value calculations using commutation functions
  • Life annuity present values - whole life annuities, temporary annuities, deferred annuities, annuity-due vs. annuity-immediate
  • Premiums - benefit premiums, net premiums, equivalence principle
  • Reserves - prospective and retrospective reserves, net premium reserves, recursive formulas
Common Trap

Many candidates have a strong preference for either the short-term or long-term material. Do not neglect the side you find less interesting. The exam splits roughly 50/50, and you cannot pass by acing one half and failing the other.

Pass Rates

Exam FAM pass rates have been approximately 45 to 50% (SOA) in early sittings. This is comparable to Exam P and slightly below Exam FM.

The moderate difficulty reflects the breadth of the syllabus. Candidates must master both insurance loss modeling (short-term) and life contingencies (long-term), which are conceptually distinct areas. The challenge is covering both sides at sufficient depth.

How to Prepare

The SOA recommends approximately 250 to 300 hours for Exam FAM. A typical study timeline is 12 to 16 weeks at 2 to 3 hours per day.

Recommended sequence:

Weeks 1 to 4: Short-Term Foundations

Start with severity and frequency models. If you passed Exam P, many probability concepts will be familiar. The new material is applying those distributions to insurance contexts: deductibles, policy limits, aggregate claims.

Weeks 5 to 8: Long-Term Foundations

Move into survival models and life contingencies. This material has a different flavor from anything you have seen before. Life table mechanics, commutation functions, and actuarial present values require careful study.

Weeks 9 to 12: Integration and Practice

Start mixing short-term and long-term practice. Work 20 to 30 problems per day across both halves.

Weeks 13 to 16: Practice Exam Phase

Take full-length practice exams (35 questions, 3.5 hours). You have 6 minutes per question on average. Target 65%+ on practice exams consistently.

Key Concept

The BA II Plus calculator is essential for Exam FAM. Commutation function calculations, present value computations, and compound distribution moments all benefit from practiced calculator skills. Master your calculator early.

FreeFellow offers free Exam FAM practice questions with adaptive difficulty, detailed solutions, and performance analytics.

Practice Strategy

Aim for 800 to 1,200 practice questions before exam day, split roughly evenly between short-term and long-term topics.

Practice benchmarks:

  • After 300 questions: scoring 45 to 55% on mixed practice
  • After 600 questions: scoring 55 to 65% on practice exams
  • Exam ready: scoring 65%+ consistently on full-length mocks

Common Mistakes

Focusing on one half. Candidates with insurance industry experience often over-invest in the short-term material and neglect long-term, or vice versa. Both halves carry equal weight.

Weak probability foundations. If your Exam P skills have faded, the short-term material will be harder than it needs to be. Review compound distributions and conditional expectations before diving in.

Underestimating long-term calculations. Life contingency calculations involve multiple steps (mortality, interest, timing). Practice until the workflow is automatic.

Common Trap

Exam FAM questions sometimes combine short-term and long-term concepts (for example, a loss model applied in a life insurance context). Be prepared for cross-topic questions.

Free Resources

  • FreeFellow Exam FAM Practice - free practice questions with adaptive difficulty, solutions, and analytics
  • SOA sample questions - official FAM practice questions with solutions
  • ACTEX FAM study notes - available for purchase if you want structured written material
  • Bowers et al., Actuarial Mathematics - reference text for long-term topics

Start your Exam FAM preparation with free practice questions on FreeFellow.