2013 Actuarial Science Club 2013 What is an actuary? Actuaries access the risk of an undesirable event, and then work to reduce those risks. Actuaries use mathematics, statistics, and financial theory to study uncertain future events, especially those of concern to insurance and pension programs. Actuaries work in all sectors of the economy, though they are more heavily represented in the financial services sector, including insurance companies, commercial banks, investment banks, and retirement funds. They are employed by corporations as well as the state and federal government many also work for consulting firms. SOA vs. CAS To become an "Actuary", you must become an Associate, and ultimately a Fellow, of one of the professional societies by passing a series of examinations administered by them. The largest of the professional groups is the Society of Actuaries (SOA), the organization for actuaries working in life and health insurance, employee benefits, and pensions. The Casualty Actuarial Society (CAS) is the organization for actuaries working in automobile, fire, and liability insurance and workers' compensation. The American Society of Pension Actuaries is the organization for actuaries working in the pension field, in particular, those actuaries who certify to the federal and state governments that pension plans are sound. Associateship CAS: Candidates for Associateship in the Casualty Actuarial Society must fulfill the examination requirements by successful completion of Exams 1-7, have credit by Validation by Educational Experience (VEE) for the required topics, and successful completion of the CAS Course on Professionalism. Exam 7 is nation specific, and passage of any one of the CAS-approved nationspecific exams fulfills the completion requirements. After completing the prescribed requirements, all prospective Associate members must make formal application to the Casualty Actuarial Society. The CAS Office will e-mail application materials to these candidates, including instructions for obtaining letters of reference from two CAS members. Obtaining the two letters of reference is the prospective Associate’s responsibility. If no member of the CAS is familiar with the prospective Associate and his or her work history, references from members of the American Academy of Actuaries, the Canadian Institute of Actuaries, the Society of Actuaries, or senior executives where the candidate is employed may be substituted. For further information on alternative acceptable references, please contact the CAS Office. An application for membership will not be processed without these references. Candidates must have completed all educational requirements prior to submitting an application for CAS membership. After all requirements are met and application is made, each candidate is voted on by the CAS Executive Council. Upon approval of the CAS Executive Council, the candidate will be admitted as an Associate of the Casualty Actuarial Society (ACAS). Candidates approved by the Executive Council will be notified by letter from the CAS president. Members may indicate their designation as an Associate of the Casualty Actuarial Society by using the initials “A.C.A.S.” after their names only after they have received official notification of acceptance as an Associate from the CAS.1 1 (Casualty Actuarial Society) 2|Page SOA: There are two paths to obtain Associateship with the SOA, you can obtain the ASA or CERA accreditation. ASA (Associate of Society of Actuaries): Candidates for Associateship in the Society of Actuaries must fulfill the examination requirements by the completion of Exams P, FM, MFE, MLC, and C, credit for the three VEE topics, have credit for FAP, and partake in a professionalism seminar. CERA (Chartered Enterprise Risk Analyst): Obtaining a CERA credential is similar to the ASA credential in that you must successfully pass exams P, FM, MFE, and C, have credit for the three required VEE topics, and partake in a professionalism seminar. However instead of taking exam MLC and the FAP e-learning course, candidates are required to successfully complete the Advance Finance/ERM Exam and a operational risk module. Fellowship Fellowship is usually obtained after a few years of experience and the requirements will differ between the CAS and SOA. CAS: In addition to fulfilling all the requirements of Associateship, successful completion of, or credit for, all nine examinations is required to fulfill the examination requirements for Fellowship and to be designated as a Fellow of the Casualty Actuarial Society (FCAS). Candidates who are admitted to the CAS as Fellows rather than Associates may indicate their designation as a Fellow of the Casualty Actuarial Society by using the initials “F.C.A.S.” after their names only after they have received official notification of acceptance as a Fellow from the CAS. Associates who complete their Fellowship requirements may use the “F.C.A.S.” designation immediately following official notification of successful completion of all the Fellowship requirements as prescribed by the Board of Directors. 2 2 (Casualty Actuarial Society) 3|Page SOA: FSA candidates the SOA must chose one of five routes-Finance/ERM, Investments, Individual Life & Annuities, Retirement Benefits, or Group & Health. Each track has its own additional requirements. Finance/ERM Investments Advanced Finance/ERM Exam Advanced Portfolio Management Exam Financial Economic Theory & Engineering Exam Financial and Health Economics Module Finance Reporting Module Operations Risk Module Financial Economic Theory & Engineering Exam Financial and Health Economics Module Investment Strategy Module Operations Risk Module or Financial Reporting Module Individual Life & Annuities Individual Life and Annuities Company/Sponsor Perspective Exam (CSP) Individual Life and Annuities Design and Pricing Exam (DP) Financial and Health Economics Module Retirement Benefits Retirement Benefit Company/Sponsor Perspective Exam (CSP) Retirement Benefits Design and Pricing Exam (DP) Financial and Health Economics Module Financial and Health Economics Module Regulation and Taxation Module Social Insurance Module Health Systems Overview Module Operations Risk Module or Financial Reporting Module Operations Risk Module or Investment Strategy Module Pricing, Reserving, and Forecasting Module Enrolled Actuaries Exam Decision Making and Communication Module (DMAC) Fellowship Admissions Course (FAC) Group & Health Group and Health Company/Sponsor Perspective Exam (CSP) Group and Health Design and Pricing Exam (DP) Exams General Information SOA Exams P/1, FM/2, MFE/3F, and C/4 are administered jointly with the CAS and count in both the CAS and SOA systems. The remaining preliminary exam differs between the SOA and CAS. For the CAS, the remaining exam is exam 3L and exam MLC for SOA. The CAS will grant students who pass exam MLC, credit for exam 3L. However students who pass exam 3L will not be given credit for exam MLC. After these exams you will be required to choose an actuarial track, because the exams will no longer be administered jointly. Preliminary Exams The Preliminary Exams are sponsored by the Canadian Institute of Actuaries (CIA), Casualty Actuarial Society (CAS), and the Society of Actuaries (SOA). CAS Name 1 2 3F 3L SOA Name P FM MFE MLC 4 C CAS/SOA Length 30/30 questions 35/35 questions 20/20 questions 25/30 questions Time 3 hours 3 hours 2.5 hours 2.5/3 hours 3.5 hours Topic Probability Financial Mathematics Financial Economics Life Contingencies Construction and Evaluation of Actuarial Models *** The CAS will grant a waiver of CAS Exam 3L to those who have passed SOA Exam MLC on life Contingencies How do you sign up for an exam? Go to the Society of Actuaries’ website and on the left side there is a box “sign up for an exam”. On the next page you will chose your exam and be directed to the SOA’s sign in page. If you have not taken an exam before register to obtain a username and password. After signing in you wil be directed to a page where you will enter you information, chose a testing center, and pay for your exam using a credit card. You will NOT be able to choose your exam date yet. Anywhere from 5-7 days after payment has been approved you will receive an email containing instructions on how you can schedule your exam. There will be a link in the email taking you to the Prometric website. You will need to use your username and password given in the email to sign in and then you can chose the date and time for your exam. See screen shots on next page for help. What is the closest testing facility to Carroll? The closest Prometric testing facility to Carroll is in Brookfield at 19435 W Capitol Dr # L04 53045-2733 phone: (262) 373-0589. If you follow the link in the email you receive confirming you registered and can sign up, you will go to this page. Click START! Now click Schedule Exam In what order do you take the exams? All of the preliminary exams can be taken interchangeably. Generally a student will begin by taking exam P/1 or FM/2, because they are thought of as basis exams for MFE/3F and MLC/3L. Once both exam are passed students move onto exams MFE/3F and MLC/3L, which are more difficult and progress off of P/1 and FM/2. Finally, students will begin exam C/4. However, exam MLC/3L is not jointly administered by the CAS/SOA so a student must chose between the SOA or CAS path unless they chose to take the SOA exam which will waive the CAS exam (the CAS exam will not waive the SOA exam!). The FAP e-learning modules can be started at anytime during the examination process, but are generally not started until a few exams are passed. What is CBT? CBT stands for “computer based testing” and is how exams P/1, FM/2, and C/4 will be administered. These exams can also be taken paper/pencil, but that does not allow you to get a preliminary pass/fail. When are the exams offered? The frequency in which the exams are offered differs between exams and will sometimes change annually. Typically exam P will be offered 6 times annually, FM four times, MFE/3F twice, C/4 three times, and MLC and 3F twice. How do you get your grades? For exams P/1, FM/2, and C/4 you will receive a preliminary pass fall immediately after you take your exam. However, with every other exam you must wait until grades are released to find out if you passed or failed. For every exam, scores are released 6 to 8 weeks later. They will release a list of passing candidate names first and a few days later will release Online Transcripts were you find your specific score. The transcript will not show how many problems you got wrong, but only your raw score (0-10) How are the tests graded? -Multiple Choice Exams The tests are graded on a scale from 0-10, with a passing score being a 6 or better. A score of 10 does not necessarily mean a perfect paper and a score of 0 does not necessarily mean you got all of the questions wrong. Scores are calculated as a percent of the passing score, which is determined for every separate testing section of each exam.3 A grade of 6 represents raw scores of at least 100 percent, but less than 110 percent of the pass mark. A grade of 5 represents raw scores of at least 90 percent but less than 100 percent of the pass mark. A grade of 0 represents raw scores that are less than 50 percent of the pass mark. A grade of 10 represents raw scores of at least 140 percent of the pass mark. 3 (Society of Actuaries) -Other Exams Reference CAS website below for the specifics on CBT and other exam grading and grade release. http://www.casact.com/admissions/syllabus/rules-grades.pdf VEE (Validation by Educational Experience) There are three VEE sections-Economics, Finance, and Statistics. These topics are not covered in the preliminary exams so they are required material outside of the examination process. Carroll offers the following SOA/CAS approved courses for VEE credit. However, you must pass two examinations before applying for VEE credit. This does not mean that you cannot take the classes before you pass two exams you just cannot apply for credit yet. To find more information click here. How do you apply for credit? You can go onto the Society of Actuaries website to find the candidate credit application to be mailed in along with your transcript to the address on the form. The cost varies depending on how many credits you will be requesting. It is cheaper to apply for more than one at a time then apply for them separately.(also see form at end of binder) Subject Finance Statistics Economics Courses BUS304-Principles of Finance ECO212- Business Statistics ASC313- Time Series Forecasting ECO124-Microeconomics Required Grade B or better B or better B or better B or better ECO125-Macroeconomics B or better What is the FAP e-learning course? FAP (Fundamentals of Actuarial Practice) is a requirement for an ASA credential with the SOA. FAP is a self-paced e-learning course composed of 8 online modules where candidates learn about the business environment and are faced with real world situations. The FAP also includes two comprehensive written assessments (Interim Assessment and Final Assessment). The course needs to be completed in 24 months which allows the user to move at their own pace. It is estimated that each module will take 30-50 hours so candidates are encouraged to finish a module every month or two.4 Module 1: Introduction/Role of the Professional Actuary Module 2: Core External Forces Module 3: Risk in Actuarial Problems Module 4: Actuarial Solutions 4 (Society of Actuaries) 9|Page Module 5: Design and Pricing of an Actuarial Solution Module 6: Model Selection and Solution Design Module 7: Selection of Initial Assumptions Module 8: Monitoring Results Exam registration page http://www.soa.org/education/exam-req/registration/edu-registration.aspx Exam score page http://www.soa.org/education/general-info/exam-results/edu-exam-results-detail.aspx Prometric Website http://www.prometric.com/default.htm 10 | P a g e Bibliography Be an Actuary. (n.d.). Retrieved from http://www.beanactuary.org/ Casualty Actuarial Society. (n.d.). Retrieved from www.casact.org Society of Actuaries. (n.d.). Retrieved from www.soa.org