2008 Revised Qualification
Standards
Southwest Actuarial Forum
Catherine Taylor, FCAS, MAAA
June 2008
Background

Code of Professional Conduct requires
members of the American Academy of
Actuaries (AAA) to

Adhere to high standards of the actuarial
profession in conduct and practice

Perform professional services only when
qualified to do so, and

Meet applicable qualification standards.
Let’s Talk about the Code of Conduct

14 Precepts which “identify the professional
and ethical standards with which we must
comply to fulfill our responsibility to the public
and the actuarial profession.”
Applies to all members of CAS, SOA, CCA, &
ASPPA whether or not a member of AAA.
Pop Quiz!
Name one of the
Precepts?
Also Applies to CAS Students

CAS Code of Professional Ethics for Candidates

Code of Conduct modified for non-members

Also covers Exam Discipline

Application signature acknowledges adherence
Effective with 2008 exams
This is sooo last year, …

Actuaries were required to meet the
Qualification Standards if they were issuing
Prescribed Statements of Actuarial Opinion
(PSAO).

PSAO is a statement of actuarial opinion or
communication which is issued about
Laws &
Regulations
Actuarial
Requirements
Accounting
Requirements
Qualification Standards

To issue a PSAO, an actuary had to meet
General Qualification Standards, including

Basic education (exams or alternative)

Experience (sufficiently experienced to apply
proper techniques)

Continuing education
For Basic Education & Experience,
Ultimately…
Can you look in the
mirror and say you are
qualified?
Continuing Education Requirements

Obtain sufficient continuing education to
maintain current knowledge in the applicable
practice area.
Casualt
y
Life
Health
Pension
Previous Requirements
Annual average of 12 credit hours in each two
consecutive calendar years.
At least 50% of the hours in
“Organized Activities”
Remaining hours in “Other
Activities”
Up to 25% from professionalism topics.
Organized Activities

Meetings of local or national
actuarial organizations

Other meetings, seminars, & programs with
actuarial content

Teleconferences or electronic conferences

Time spent taking exams successfully

Listening to tapes if accompanied by live
presentations or discussion leaders
Other Activities

Independent study

Listening to tapes of seminars

If content is relevant
 Committee participation (including inhouse committees)

Studying for actuarial exams

Writing papers

Preparing presentations

Correspondence course
Here’s What’s New!

Broadened definition of what constitutes a
Statement of Actuarial Opinion

Basic Education Requirement & Experience
essentially unchanged, but more specific

Significant increase in CE hour requirement

Broadened definition of what qualifies for CE
Statements of Actuarial Opinion
“Opinion expressed by the actuary
in the course of performing
actuarial services and intended to
be relied upon by the person or
organization to which the opinion
is addressed.”
What are Professional Actuarial Services?
Opinions
Findings
Client
or
Employer
relying on
Recommendations
Advice
In Other Words…
Pretty much everything we do!
SAOs can be…

Internal company communication if


contains actuarial content
intended to be relied upon

Usually written, but could be oral

May or may not be a public document
Not everything an actuary communicates
is an SAO - must have actuarial content!
Examples of SAO






SAO
Reserve opinions
Rate filing
Expert testimony
Ratemaking
opinion
Pricing opinion
Management
reports on actuarial
topics





May Contain SAO
Slide presentation
Speech
Phone conversation
Data call certification
Congressional
testimony
New Basic Education & Experience

Member of AAA, CAS, SOA, CCA, ASPPA or
other IAA-member organization

3 years responsible actuarial experience


Work requiring knowledge and skill in solving
actuarial problems
Knowledge of law on SAO defined in Code of
Professional Conduct
New Continuing Ed Requirement

At least 30 hours each year of relevant
continuing education (24 hours in 2008)

At least 6 of the 30 hours must be Organized
Activities

At least 3 of the 30 hours must be on
professionalism topics
Hours met in the year preceding the SAO
What Is Relevant?

Does it broaden understanding of the work an
actuary does?

Does it expand knowledge of related disciplines
that bear on an actuary’s work?

Does it facilitate entry into a new practice area?

It can also be business skills. (3 hour cap)
What are General Business
& Professionalism Topics?
Business Skills






Client Relationship
Presentation
Communication
Project Management
Personnel Management
Professionalism
Studying, reviewing, or
providing input on




Serving on



Exposure Draft
ASOP
Code of Professional Conduct
ASB
Professionalism Committee
Ethics Training
What Counts as Organized Activities?

Interaction with other actuaries working for
different organizations





Conferences
Seminars
Webcasts
In-person or on-line course
Committee work
In-house meetings only count if there is an
outside speaker.
What Counts as Other Activities?







Reading actuarial literature or other material
on relevant technical or professional topics
Writing papers
Listening to tapes of seminars
Relevant in–house meetings
Studying for actuarial exams
Drafting actuarial exams
Preparing for or speaking at a CE activity
Again with the mirror…
You must be able to look
yourself in the mirror and say
this qualifies!
What Else?

50 minutes is a CE hour and fractional
portions earned at a rate of 60/50 (1.2).


Hours can be carried over 1 year


i.e. 90 minutes is 1.8 hours not 1.5 hours
For 2008, hours above 24 in 2006 & 2007
For new members, hours spent studying
count for CE in the next year.
How Do I Let Others Know I Am
Qualified?

SAOs need to include an acknowledgement
of qualification.

Company actuaries should be notifying their
management about their qualification.

Should be done annually.
How Do I Keep Track of Everything?

Records are required to be maintained

Must be kept for 6 years

At a minimum include



Date of the CE
Credit hours obtained
Brief description of the subject matter
Possible Spreadsheet
Name
Record of Continuing Education
2008
Activity
Credit
Sponsor
Date(s)
Event
Subject Matter
Type
Hours
Total Organized Activities
Credit Hours
0
Total Other Activities Credit
Hours
0
Total CE Credit Hours
0
POP QUIZ!
#1
Does this session count for CE and
if so, which category and how
much?
Organized Activities
& Professionalism
1 hour
#2
EMB America and Pinnacle
periodically put on1 hour webinars.
Do they count for CE and if so,
which category and how much?
Organized Activities
1.2 hours
#3
Would a 50 minute internal meeting
summarizing information your boss
learned at an external class on
communication skills count for CE and
if so, which category and how much?
Other Activities & General Business
I hour
#4
Would a 50 minute session on
ERM with the AVP, Enterprise Risk
Management at your company
count for CE and if so which
category and how much?
Other Activities
1 hour
#5
Would a 1.5 hour Advanced Training
session at your company with IIHS’s
Kim Hazelbaker count for CE and if so
which category and how much?
Organized Activities
I.8 hours
Where Is All of This Information?

AAA website www.actuary.org


Click on Code of Conduct on the left
CAS Website www.casact.org

Click on Standards & Guidelines on the left
I urge you to read these
carefully!
Questions?