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
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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