Current CAS Issues
and Directions
Robert F Wolf (Bob)
CAS Board of Directors
Director, Navigant Consulting, Inc.
Midwest Actuarial Forum 3/17/06
Allstate, Northbrook, IL
Agenda
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CAS Centennial Goal / ERM Initiatives
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Governance Initiatives on 2006 Ballot
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Task Force on Actuarial Credibility
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Task Force on Publications
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Basic Education Initiatives
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Research Working Parties
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Continuing Education
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Image of the Actuary Campaign
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Your Input
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.
Implementing the
Centennial Goal
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Significant, Attainable, Measurable Goals
 Interim milestones to help gauge progress towards the
Centennial Goal.
 2006 LRPC Goal: Critically review the SAM Goals.
Environmental Scans – Challenges:
 Competition for Risk Integration & ERM Services
 Marketing Actuarial Skills
 Volunteerism
 Internationalism
 Quantification Skills
 Reputation of the Actuarial Profession
ERM Initiatives
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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.
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Risk Management Section
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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  About
CAS  CAS Special Interest Sections.
Other ERM Initiatives
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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.
Other 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
Association Management.
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Other ERM Initiatives
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ERM Credential (SOA Initiative)
Board response – The CAS:
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Discourages consideration of an independent ERM
credential sponsored by the actuarial profession.
Should focus on enhancing the role of actuaries in ERM by:
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Providing continuing education, conducting research, promoting
actuarial skills in addressing ERM issues, and exploring changes to the
CAS basic education syllabus.
Favors a partnership with ERMII -- support ERMII in its
education and research, particularly as these initiatives
enhance the role of actuaries in ERM.
Looks forward to a continuing partnership with the SOA in
enhancing opportunities for actuaries in ERM.
ACAS Right to Vote
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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:
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President
President - Elect
Vice President - Admissions
ACAS Right to Vote
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Voting rights unchanged since 1914; reflect a time when
there was a greater difference between classes.
Associates are an important part of the Society:
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25-30% of Associates no longer take exams.
Many Associates contribute extensively to the profession as
volunteers, on committees, as speakers and authors, etc.
Contributions as practitioners; they have equal practice rights.
Associates pay full dues, but cannot vote.
Mutual Recognition issues.
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Ought an ACAS have the same vote as a MR CAS member ?
Task Force on Governance
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Board proactively considers governance issues
by allotting time during Board meetings for
discussion.
Formed Board Task Force on Outside
Representation in CAS Governance Process in
March 2005.
Charged with considering the role of outside
representation in the CAS governance process.
Task Force on Governance
1.
2.
3.
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.
Academy Role at CAS Board Meetings
Participation at Board Meetings by the Casualty Vice
President of the AAA should be formalized through
policy or, if recommendation #1 is implemented,
through an appointment to the Board.
Executive Director as Member of Executive Council
The Executive Director should be officially
designated as a member of the Executive Council.
Why Have Appointed, NonActuary Board Members?
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Better Decision-Making
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Broader input is always better in setting strategy
and policy.
Move away from inward thinking.
Perception
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Prevailing schools of thought on governance
endorse this approach.
Positions CAS as outward looking and forward
thinking.
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.
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.
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.
Task Force on
Actuarial Credibility
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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
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CRUSAP
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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.
Task Force on Publications
Recommendations
1.
2.
3.
4.
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.
Encourage non-CAS members to publish in the
new journal; actively solicit articles from around
the world.
Basic Education Initiatives
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Validation by Educational Experience:
Economics
 Finance
 Applied Stats
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Computer Based Testing
 Modeling Workshop
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FCAS Education
CBT Implementation for
Exam 1
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September 2005 – First administration
(paper/pencil backup for areas without centers).
February 2006 – Second administration
2006 - 4 CBT administrations total.
Immediate release of grades beginning in 2006.
Rollout to other exams in future years.
Modeling Workshop
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Education in risk integration techniques is
consistent with Centennial Goal.
DFA added to Syllabus in 2000.
 DFA taken off Exam 8 in 2003 due to inability to
test in a paper-and-pencil environment.
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Modeling Workshop Task Force established.
Piloted a hands-on workshop experience.
 Consider adding this as a future FCAS requirement
and/or continuing education opportunity.
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FCAS Education
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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).
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Recommendations delivered to CAS Board in
November 2005.
FCAS Education
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Board Task Force on FCAS Education formed
in late 2005 to consider policy-level issues.
Task Force Report was focus of January 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.
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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).
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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
2006 Calendar of Events
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ERM Symposium
April 23-26, Chicago
Spring Meeting
May 7-10, Puerto Rico
Seminar on Reinsurance
June 1-2, New York City
CLRS
September 11-12, Atlanta
Seminar on Predictive Modeling
October 4-5, 2006, Boston
Annual Meeting
November 12-15, San Francisco
Image of the Actuary Campaign
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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.
I welcome your input
regarding . . .
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CAS Centennial Goal / ERM Initiatives
Governance Initiatives on 2006 Ballot
Task Force on Actuarial Credibility
Basic Education Initiatives
Research and Publications
Continuing Education
International Issues
What’s On Your Mind?
Questions?
Thank You!