Current CAS Issues
and Directions
Allan Kaufman
Casualty Actuaries of Europe
London
20 October 2006
Agenda

Results of 2006 Elections – Ballot Initiatives

Basic Education Issues

CAS Centennial Goal / ERM Initiatives

Actuarial Credibility

CAS Publications and Research

Image of the Actuary Campaign

2006-07 Calendar of Events

Your Input
2
Results of 2006 Elections –
Ballot Initiatives
Fellows approved the proposed governance initiatives:

Appointed (Non-Actuary) Board Members
Create a class of Board Members consisting of up to
three additional Board Members to be appointed by the
Board.

Executive Director as Member of Executive Council
The Executive Director should be officially designated
as a member of the Executive Council.
3
Results of 2006 Elections –
Ballot Initiatives
Proposals related to the rights of Associates were not
approved:
 Right to vote should be granted upon earlier of:
Fellowship or five years after admission as a member.
 All voting members should be allowed to stand for
election to the Board of Directors.
 Voting Associates may hold all officer positions, with
the exception of:



President
President - Elect
Vice President - Admissions
4
FCAS Education Issues


Task force established in late 2004 to
recommend “Learning Objectives” for what it
means to be an FCAS.
Considerations
Perhaps reducing total number of exams by one (i.e.,
8 exams plus VEE).
 Including a mandatory workshop (e.g., DFA
Modeling Workshop).


Recommendations delivered to CAS Board in
November 2005.
5
FCAS Education Issues


Board Task Force on FCAS Education formed
in late 2005 to consider policy-level issues.
TF report was focus of Jan 2006 Board meeting,
during which four resolutions were passed:
Prepare a White Paper.
 Board endorses use of electives in basic education.
 Electives to be available post-Fellowship for CE.
 Mastery of core topics must be demonstrated by all
candidates through rigorous methods.


White Paper to be exposed in late 2006.
6
CBT Implementation for
Exam 2






September 2005 – First CBT offering of Exam 1
(paper/pencil backup for areas without centers).
August 2006 – 98% of candidates take Exam 1 on a
computer.
2006 – Exam 1 offered four times.
Exam 2 is the logical choice to move to CBT.
May 2008 (proposed) – First CBT offering of Exam 2.
2009 (proposed) – Offer Exam 2 four times via CBT.
7
CAS Centennial Goal
The CAS will be globally recognized as the
preeminent resource in educating casualty
actuaries and conducting research in casualty
actuarial science. CAS members will be
recognized as the leading experts in the
evaluation of hazard risk and the
integration of hazard risk with strategic,
financial and operational risk.
8
CAS Centennial Goal


Significant, Attainable, Measurable Goals
 Interim milestones to help gauge progress towards the
Centennial Goal.
 2006 LRPC Goal: Critically review the SAM Goals.
Environmental Scans – Threats:
 Competition for Risk Integration & ERM Services
 Marketing Actuarial Skills
 Volunteerism
 Internationalism
 Quantification Skills
 Reputation of the Actuarial Profession
9
ERM Initiatives

During 2005, the CAS Board took actions to
help the actuarial profession benefit from new
opportunities in Enterprise Risk Management:
Approved CAS/SOA Risk Management Section.
 Launched partnership with Enterprise Risk
Management Institute International, Ltd. (ERMII).
 Created new Vice President of Risk Integration and
ERM position to oversee ERM-related activities.
 Formed ERM Task Force to examine the CAS.

10
ERM Initiatives
Risk Management Section
 Similar to the existing CAS special interest sections
CARe and AIR.
 Both CAS and SOA members are eligible to serve on
the Council that guides the activities of the Section.
 Members are encouraged to join the Section. Annual
dues are only $20.
 Learn more on the CAS Web Site  CAS Special
Interest Sections.
11
ERM Initiatives



ERMII is a private, not-for-profit, independent
educational and research organization led by
CAS Fellow Shaun Wang.
ERMII is co-sponsored by an international
group of universities and professional
organizations including Georgia State University,
University of New South Wales, University of
Illinois, Wuhan University (China), and the CAS.
VP-Risk Integration and ERM to oversee and
coordinate ERM-related activities.
12
ERM Initiatives

CAS ERM Task Force
Goal: Spotlight the CAS itself as an example of
ERM best practices.
 Charge: Implement an ERM process for the CAS,
report on the outcome of this effort by the
September 2006 Board meeting, and prepare an
article, authored by the Executive Director and the
President, for placement in a magazine such as
Associations Now!

13
Task Force on
Actuarial Credibility
Established to identify, prioritize, and
investigate the feasibility of possible
strategies for enhancing the perceived
credibility of the actuarial profession and to
develop action plans for implementation of
those strategies considered to have the
greatest potential for high impact.
14
Task Force on
Actuarial Credibility
1.
2.
3.
Enhance the transparency of the actuary’s
conclusions by clearly identifying differences
between management’s “best estimate” and the
actuary’s “best estimate.”
Enhance the public’s understanding of actuarial
estimates.
Improve the transparency of disclosures by
requiring that the actuarial report contain an
exhibit that summarizes changes in the actuary’s
estimates from one period to the next.
15
Task Force on
Actuarial Credibility
4.
5.
6.
Enhance the quality of corporate governance by
educating audit committees or board of directors or
both on the roles and responsibilities of the appointed
actuary.
Enhance the self-governance of the profession by
requiring the appointed actuary to provide an
explanatory document with the ABCD whenever the
change in the actuary’s reserve estimates over a defined
period exceeds certain predetermined thresholds..
Elevate the unique role of the appointed actuary within
the statutory financial reporting environment by
incorporating an Actuarial Statement within the Jurat
Page of each company’s Annual Statement.
16
Task Force on
Actuarial Credibility


Task Force Report presented to the CAS Board in
May 2005. Board accepted the Report and directed
the EC to implement recommendations as
appropriate.
Two additional Task Forces formed:
Joint Task Force for Enhancing the Reputation of
Casualty Actuaries
 CAS Task Force for Enhancing the Reputation of
Casualty Actuaries

17
CRUSAP





Critical Review of the U.S. Actuarial Profession
(CRUSAP) Task Force formed by the AAA.
CRUSAP will identify and analyze risks and opportunities
facing the actuarial profession and provide
recommendations for meeting emerging challenges.
30 members serve on the CRUSAP advisory panel.
Fred Kilbourne is chairperson of the CRUSAP Task
Force.
See www.crusap.net for more information.
18
Task Force on Publications
Recommendations
1.
2.
3.
Remove papers from PCAS. Keep CAS-specific
content and add Yearbook content.
Create a yearly Membership Directory
publication as a separate soft-cover publication.
Create a new journal where refereed papers will
be published. The editor is Gary Dean.
19
New CAS Journal
The Board approved the name and tagline for
the new Journal:
Variance: Advancing the Science of Risk
20
Research Working Parties
Research task forces.
 Process should result in quality work
products.
 Brings together the research energy of
individual researchers.
 Proven to be effective for GIRO, the
general insurance research organization of
the Faculty and Institute of Actuaries
(UK).

21
Research Working Parties
2004-06
 Dynamic Risk Modeling Handbook
 Public-Access DFA Model
 Bornhuetter-Ferguson - Initial Expected Losses
 Tail Factors
 Risk Transfer Testing
 Data Management and Information Educational
Materials
 Loss Simulation Model
22
Image of the Actuary Campaign



Profession-wide campaign.
Image Advisory Group, made up of members from each
of the North American actuarial organizations, oversees
campaign.
www.imageoftheactuary.org/ for more information.
23
2006-07 Calendar of Events






Seminar on Predictive Modeling
October 4-5, 2006, Boston
Annual Meeting
November 12-15, 2006, San Francisco
Ratemaking Seminar
March 8-9, 2007, Atlanta
ERM Symposium
March 28-30, 2007, Chicago
Seminar on Reinsurance
May 7-8, 2007, Philadelphia
Spring Meeting
June 17-20, 2007, Orlando
24
ASTIN 2007




CAS is host of the 2007 ASTIN Colloquium - ASTIN’s 50th
Anniversary!
Immediately follows the 2007 CAS Spring Meeting, with a joint
day of sessions.
http://www.actuaries.org/ASTIN2007/
for more information.
Look for brochure in October.
25
Any Further Comments . . .
.

Results of 2006 Elections – Ballot Initiatives

Basic Education Issues

CAS Centennial Goal / ERM Initiatives

Actuarial Credibility

CAS Publications and Research

Image of the Actuary Campaign

2006-07 Calendar of Events

Other Topics

Questions?
26
Thank You!
Allan Kaufman
Casualty Actuaries of Europe
London
20 October 2006