Current CAS Issues
and Directions
David Oakden
Ontario Conference of Casualty Actuaries
Nov. 9, 2005 Toronto
Agenda
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CAS Centennial Goal
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ERM Initiatives
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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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Centennial Goal Implementation Task Force
Subcommittee of Long Range Planning Committee
 Working with Vice Presidents and Committee
Chairs in setting goals.
 How does my committee and its goals support the
Centennial Goal?
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SAM Goals
Significant, Attainable, Measurable
 Interim milestones to help gauge progress towards
the Centennial Goal.
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ERM Initiatives
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During its March 2005 meeting, the CAS Board
took actions to help the actuarial profession
benefit from new opportunities in Enterprise
Risk Management (ERM)
Approved Joint CAS/SOA Risk Management
Section.
 Launched partnership with Enterprise Risk
Management Institute International, Ltd. (ERMII).
 Created new Vice President-Risk Integration
position to oversee ERM-related activities.
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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.
Look for the check box on the CAS dues notice
mailed in October.
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 to oversee and coordinate
ERM-related activities.
Other ERM Initiatives
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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.
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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Task Force on
Publications
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 called the Journal of
Casualty Actuarial Science where refereed papers
will be published.
Encourage non-CAS members to publish in the
Journal; actively solicit articles from around the
world
Task Force on
Publications
5.
6.
7.
8.
Continue to publish the Forum in hardcopy if it is
economically feasible and subscribing members pay the
full cost of producing and distributing it.
Change the name of the Forum to The Forum: A
Clearinghouse for Expressing Ideas and Stimulating Discussion.
Create a process to publish monographs (e.g.,
collections of study notes, call papers of particularly
high quality and focused on one topic).
Produce an international monograph in 2007 to
commemorate the ASTIN Colloquium.
Basic Education
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Prerequisites: Linear Algebra and Calculus
Validation by Educational Experience:
Economics, Finance, Applied Stats
Exam 1: Probability with Calculus (3 hours)
Exam 2: Interest (2 hours)
Exam 3: Actuarial Models & Statistics (4 hours)
Exam 4: Actuarial Modeling (4 hours)
VEE Options
1.
Approved university course (grade of B- or
better)
2.
Approved exams (e.g., AP exams for Micro and
Macroeconomics, CFA exams, CAS transitional
exams).
Other approved experiences (courses/seminars
designed specifically for VEE credit.)
3.
Computer Based Testing
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Candidates take exam at a standardized testing
center.
Can schedule exam any time during a specified
period (e.g., three days).
Software tutorial provided online and before
exam begins.
User friendly software with easy navigation.
Potential for immediate grading.
CBT Implementation for
Exam 1
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September 2005 - CBT (paper and pencil
backup for areas without CBT centers).
2006 - 4 to 6 CBT administrations.
Immediate release of grades beginning some
time 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 review
Exams 5-9.
Goal is to reduce total number of exams by one
(i.e., 8 exams plus VEE).
May include a mandatory workshop (e.g., DFA
Modeling Workshop).
Recommendations due to CAS Board in
November 2005.
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
2003-04
 Correlations and Dependencies Among All Risk
Sources
 Executive-Level Decision-Making Using
Dynamic Risk Modeling
 Elicitation and Elucidation of Risk Preferences
 Quantifying Variability in Reserves Estimates
Research Working Parties
2004-05
 Dynamic Risk Modeling Handbook
 Public-Access DFA Model
 Bornhuetter-Ferguson - Initial Expected Losses
 Tail Factors
 Risk Transfer Testing
Continuing Education
AAA Exposure Draft recommends that the
Qualification Standards apply to all “statements of
actuarial opinion” defined as follows:
… an opinion expressed by an actuary based upon actuarial
considerations, and intended by the actuary to be relied upon by
the outside person or organization to whom the opinion is
addressed. The phrase “outside” person or organization refers to
persons or organizations other than the actuary’s direct employer.
A statement of actuarial opinion, although usually
conveyed in writing, may also be conveyed orally.
2005-06 Calendar of Events
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CAS Annual Meeting
November 13-16, Baltimore, MD
Online Course on Financial Risk Management
November 4-20, CAS Web Site
2006 Seminar on Ratemaking
March 13-14, Salt Lake City
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.
Campaign kick-off CD ROM sent to all actuaries.
www.imageoftheactuary.org/ for more information.
I welcome your input
regarding . . .
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CAS Centennial Goal
ERM Initiatives
Task Force on Actuarial Credibility
Basic Education Initiatives
Research and Publications
Continuing Education
International Issues
What’s On Your Mind?
Questions?
Thank You!