CASUALTY ACTUARIAL SOCIETY
COURSE ON PROFESSIONALISM
Canadian Panel Presentation
Panel Discussion Topics
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Professional Actuarial Organizations
Purpose of CIA, CAS, and AAA
Roles of Professional Actuarial Organizations
Roles of CIA, CAS, and AAA
Standards for Acceptable Behavior (CIA Rules of Professional Conduct)
Standards for Acceptable Work Products (ASB Video)
Qualification Standards (FCIA and PSAO)
Counseling and Compliance (ABCD Video)
Professional Actuarial Organizations
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Canadian Institute of Actuaries (CIA)
Casualty Actuarial Society (CAS)
American Academy of Actuaries (AAA)
 Actuarial Standards Board (ASB)
 Actuarial Board for Counseling & Discipline (ABCD)
Other Professional Actuarial Organizations
Society
Life,
of Actuaries (SOA)
health, benefits and pensions
American
Society of Pension Actuaries (ASPA)
Conference of Consulting Actuaries (CCA)
Consultants
International
in all practice areas
Institute of Actuaries (IIA)
Actuarial Studies in Non-Life Insurance (ASTIN)
Actuarial Approach for Financial Risks (AFIR)
Professional Actuarial Organizations
Within the Casualty Actuarial Society
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Actuaries in Regulation (AIR)
Casualty Actuaries in Reinsurance (CARE)
Regional Affiliates of the CAS
Regional Affiliates of the CAS
CIA Membership Statistics
SCHEDULE OF MEMBERSHIP
Particulars/Details
June 2002 / Juin 2002
Enrollments / Nouvelles adhesions
Tranfers / Transferts
Reinstatements / Retablissements
Terminations / Cessations
Resignations / Demissions
Deaths / Deces
June 2003 / Juin 2003
EFFECTIF
Fellows Students/Etudiants Correspondents
2499
26
83
4
-10
-6
-6
2590
1013
84
-84
1
-14
-1
-1
981
36
1
1
0
-1
-2
0
35
CAS Membership Statistics
Type of Employment
Insurance Company:
Property-Liability
Life and A.& H.
Reinsurance*
Organizations
Serving Insurance
Business**
Consultants
Government
Academic
Brokers and Agents*
Other
Retired
TOTAL
Fellows
Nov. Nov.
1983 1993
361
11
--
Nov.
2003
Associates
Affiliates
Nov. Nov. Nov.
Nov.
1983 1993 2003
2003
581 1,104
12
15
109
357
251
16
--
452
13
62
576
24
131
9
-6
37
51
64
92
295
412
13
19
41
4
4
7
-14
64
40
28
341
46
98
98
604 1,211 2,503
35
43
17
7
-44
36
449
41
42
160
205
32
37
6
5
22
49
32
197
52
52
872 1,318
-8
--1
2
-26
*Category created in 1989
**Formerly Bureaus and Associations
CAS Volunteer Participation
The Casualty Actuarial Society relies heavily
on the volunteer support of its members to
conduct the business of the Society.





27% of members volunteer for the CAS,
and this figure includes: Executive
Council and Board members, paper
authors, Regional Affiliates, speaking at
a meeting or seminar, or serving on a
committee
24% of members support our committees
There are approximately 914 committee
positions currently filled by CAS
members
368 volunteer for different Admissions
Committee positions
88% of our Presidents have served on
the Examination Committee
CIA Statement of Purpose
• The CIA is the national organization of the actuarial
profession in Canada.
• The institute is dedicated to serving the public
through the provision by the profession of actuarial
services and advice of the highest quality.
CIA Statement of Purpose
(Cont’d)
• The Institute promotes the advancement of actuarial
science and sponsors programs for the education and
qualification of members and prospective members.
• The institute maintains programs to ensure that
actuarial services provided by its members meet
accepted professional standards.
CIA Statement of Purpose
(Cont’d)
• The Institute also provides services to actuaries in
Canada to assist them in the discharge of their
professional responsibilities.
• Includes all specialties of Canadian actuaries.
CAS Purpose
 To
advance the body of knowledge of actuarial science in
applications other than life insurance,
 To establish and maintain standards of qualification for
membership,
 To promote and maintain high standards of conduct and
competence for the members, and
 To increase the awareness of actuarial science.”
Source: CAS Constitution
AAA Purpose


The Academy is a professional membership, government
information, and public relations organization for all actuaries
practicing in the United States, regardless of specialty.
The Academy establishes qualification standards for making
public statements of actuarial opinion.
Source: 1993 Directory of Actuarial Memberships (Published by the AAA)
Roles of Professional Actuarial
Organizations
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Set standards for acceptable behavior
Agree on principles
Define acceptable work products (Standards of Practice)
Set membership standards
Set qualification standards for PSAO counsel
Ensure compliance
Promote research
Interface with public
Statements of Principles vs.
Standards of Practice

Statement of Principle:
 A general
or fundamental rule or truth on which others
are based.
 Principles are expected to be relatively constant.

Standard of Practice:
 Define
the generally accepted actuarial practices.
 Standards are expected to change over time in order to
remain current.
Actuarial Standards Board
The ASB’s objectives are:
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Direct and manage the development of actuarial standards of
practice by its operating committees in all areas of actuarial
practice.
Expose and promulgate actuarial standards of practice within its
sole discretion and pursuant to such procedures it deems
appropriate, in all areas of actuarial practice.
Provide continuous review of existing standards of practice and
determine whether they are in need of amendment, alteration,
expansion, or elimination.
Relationships Between Standards
and Statements
CASUALTY
ACTUARIAL
SOCIETY
IS AFFILIATED
WITH
HAS FORMED
PROMULGATES
STATEMENTS
OF
PRINCIPLES
AMERICAN
ACADEMY OF
ACTUARIES
ARE USED BY
ACTUARIAL
STANDARDS
BOARD
PROMULGATES
STANDARDS
OF
PRACTICE
What is a PSAO?
Actuarial opinion called for by law or regulation
 Actuarial opinion called for by a Standard of
Practice
 Actuarial communication made for purposes of
compliance with FASB or GASB standards

Examples of PSAO’s
Loss reserve opinions
 Expert testimony at rate hearing
 Rate filing?
 Phone calls with regulators?
 Interviews? Speeches?
 Internal documentation?
 Others?

Roles of CIA, CAS, and
AAA
ROLE
CANADA
UNITED
STATES
Standards for
acceptable behavior
Definition of
acceptable work products
CIA Rules of
Professional
Conduct
CIA Guiding
Principles
CIA Standards
of Practice
PSAO Qualifications
CIA
AAA Code of
Professional
Conduct
CAS Statements
of Principle
AAA ASB
Standards of
Practice
AAA
Principles
Roles of CIA, CAS, and
AAA
(cont’d)
ROLE
CANADA
UNITED
STATES
Counseling
CIA PCFRC,
AA
CIA Committee
On Professional
Conduct
CIA
CIA
AAA ABCD
Compliance
Research
Interface with
Public
AAA ABCD
CAS, AAA
AAA
CIA Rules of Professional
Conduct
• Effective:
June, 1992
• Modified 11/95 to reflect Mexican entry into NAFTA
•Categorized into 20 Rules that identify the professional and ethical standards
with which a member of the CIA must comply and thereby serve public
interest.
•Annotations provide additional explanatory, educational and advisory material
on how the rules are to be interpreted and applied.
•For professional services rendered in the United States, the AAA Code of
Professional Conduct applies.
•For professional services rendered in Mexico, the code of conduct of the
Colegio Nacional de Actuarios (CONAC) applies.
CIA Rules of
Professional Conduct
(cont’d)
• It is the professional responsibility of the CIA member to be knowledgeable
about, and to keep current with the revisions to the rules and annotations.
• The Property / Casualty Financial Reporting Committee and / or the
Committee on the Role of the Appointed Actuary is available to provide
counseling.
•The Committee on Discipline handles any disciplinary proceedings.
•These CIA Committees provide equivalent roles of the AAA’s Actuarial Board
for Counseling and Discipline (ABCD).
CIA Rules of
Professional Conduct
• CIA By-Laws
(cont’d)
state:
“A member or student shall comply with the bylaws, rules of professional conduct and standards of
practice including recommendations on the Institute as
they may be from time to time and with any order or
resolution of the Council or officers of the Institute
under the by-laws.”
Professional Integrity
RULE 1:
A member shall act honestly and in a manner to uphold the
reputation of the actuarial profession and to fulfill the profession’s
responsibility to the public.
RULE 2:
A member shall perform professional services with integrity, skill,
and care.
Qualification Standards
RULE 3:

A member shall perform
professional services only
when the member is qualified
to do so and meets applicable
qualification standards.
Standards of Practice
RULE 4:

A member shall ensure that
professional services
performed by or under the
direction of the member meet
applicable standards of
practice
Disclosure
RULE 5:

A member shall make full and timely disclosure to a client or
employer of the sources of all direct and indirect compensation
that the member or the member’s firm may receive in relation
to an assignment for which the member provides professional
services to that client or employer.
Conflict of Interest
RULE 6:

A member shall not perform professional services involving a
conflict of interest unless:
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
the member’s ability to act fairly is unimpaired, and
there has been full disclosure of the conflict to all known direct users,
and
all known direct users have expressly agreed to the performance of the
services by the member.
Control of Work Product
RULE 7:

A member shall not
perform professional
services when the member
has reason to believe that
they may be used to
mislead or to violate or
evade the law.
Confidentiality
RULE 8:

Except as required under Rule 13, a member shall not
disclose to another party any confidential information
obtained through a professional assignment performed for
a client or employer unless authorized to do so by the
client or employer or required to do so by law.
Courtesy and Cooperation
RULE 9:

A member shall perform
professional services with
courtesy and shall avoid
unjustifiable or improper
criticism of other members,
and shall cooperate with others
in the client’s or employer’s
interest.
Advertising
RULE 10:

A member shall not engage in any
advertising or business solicitation
activities in respect of professional
services that the member knows or
should know are false or misleading,
or that reflects unfavourably on the
profession or the competence or
integrity of any member thereof.
Titles and Designations
RULE 11:

A member shall make use of
membership titles and designations of
the Institute only where that use
conforms to the practices authorized
by the Institute.
Collateral Obligations
RULE 12:

A member shall be subject to the Institute’s disciplinary procedures if the member is
convicted or found guilty of or pleads guilty to any criminal or similar offense.
RULE 13:

A member shall comply with the procedures prescribed by Council if the member
becomes aware of any apparent material noncompliance by another member with
the rules of professional conduct or with the standards of practice.
RULE 14:

A member or the member’s representative shall respond promptly in writing to any
letter received from a person duly authorized by the Institute to obtain information
or assistance regarding any metter arising under Section 20 of the bylaws
(Discipline of Members and Students).
Reporting
RULE 15:

A member shall include, where appropriate, in any report or certificate a statement
or reference describing or identifying the data and the actuarial methods and
assumptions employed.
RULE 16:

A member shall indicate clearly in giving the member’s opinions or findings that the
member is the source of the opinions or findings and shall be available to provide
supplementary advice and explanation as required.
Reporting
(cont’d)
RULE 17:

A member shall ensure that any calculations or recommendations made by the
member or under the member’s direction are, wherever possible, based on sufficient
and reliable data and that any assumptions made are adequate and appropriate, and,
subject to Rule 18, that the methods are consistent with the principles established by
precedent or common usage within the profession.
RULE 18:

A member shall, where requested by a client or employer to prepare a study that, in
the opinion of the member, deviates from the principles established by precedent or
common usage within the profession, or is based on insufficient or unreliable data,
include in any resulting report, communication or certificate an explicit qualification
of the member’s findings..
Foreign Practice
RULE 19:

A member who is practicing outside
Canada in a country or jurisdiction in
which the profession is organized
under an actuarial body, of which the
said member is also a member, may,
provided the Council of the Institute
has agreed, practice free from the
requirements of Rules of Professional
Conduct 15 and 16.
Objectivity
RULE 20:
A member performing services for the purpose of making a report
 required by law with respect to
1 a pension plan; or
2 an employee benefit plan; or
3 an insurance company; or
 required for accounting purposes,
shall perform the services without regard to any personal
considerations or to any influence, interest or relationship in respect of the
affairs of the member’s client or employer that might impair the
member’s
professional judgement or objectivity.

CIA Rules of
Professional Conduct

The Rules of Professional
Conduct articulate that
procedures prescribed by
Council must be followed
when the member is aware
of a violation of these rules.
CIA Guiding Principles



In carrying on its activities and programs, the Institute holds the duty
of the profession to the public above the needs of the profession and its
members.
To ensure that services are provided by qualified individuals, the
Institute maintains publicly visible programs and procedures for the
attainment and maintenance of professional qualifications by its
members.
The Institute develops standards of professional practice and codes of
conduct and, through its disciplinary process, ensures their compliance
by its members.
CIA Guiding Principles

(cont’d)
The Institute promotes the development of a body of expert
actuarial knowledge and practice relevant to Canadian social
and economic needs. It encourages actuarial research and
scholarly activity and the dissemination of the results among
its members. It encourages the application of actuarial
science and technique to new areas where these are relevant.
CIA Guiding Principles
(cont’d)
The Institute cooperates with governments and public bodies
and makes timely and relevant contributions to public policy
issues.
 To assure a continuing supply of qualified professionals, the
Institute encourages the recruitment and training of new
actuaries.
 The Institute serves the professional needs of all Canadian
actuaries regardless of area of practice, language, or
geographic region.

CIA Guiding Principles
(cont’d)
To assist its members in their professional activities, the
Institute develops technical support including collection and
analysis of statistical data, and the publication of actuarial
handbooks and texts.
 The Institute represents Canadian actuaries internationally
and cooperates with other national actuarial bodies in areas
of mutual interest.
 The Institute provides opportunities for the professional
development of its members.

Qualification Standards
Qualification Standards
STANDARD
CIA
Basic Education
e.g. FCAS
e.g. ACAS
(certification)
CIA PEC & PO
(education)
3 years actuarial,
1-1/2 years recent
Canadian
Experience
AAA
All Criteria must be met before an Actuary is qualified to make
statements in public
Qualification Standards
RULE 3:

A member shall perform
professional services only
when the member is qualified
to do so and meets applicable
qualification standards.
Qualification Standards for
Public Statements of Actuarial Opinion
Purpose
To codify the requirements for training, experience
and continuing education for actuaries who issue
PSAO’s
PSAO Qualification Standards
REQUIREMENT
CANADA
UNITED
STATES
Basic Education
Experience
Continuing Professional
Development
Specific
FCIA
FCIA
Yes
e.g. ACAS
Yes
Yes
N/A/
Additional
Standards for
certain specific
PSAO’s
Continuing Education Requirements
Requirements



Average of 12 credit hours per calendar year
Two calendar year retrospective test - you qualify for 2004 during
2002 and 2003.
Carry forwards are allowed
Maximum of 12 hours of “organized activities”
 Maximum of 6 hours of “other activities”


No more than half of the credit hours may be obtained through “other
activities”
Documentation is required, and is to be maintained by the
individual
Qualification Standards for PSAO’s
AAA Specific Qualification Standards


Apply to certain specific PSAO’s
Very limited in number
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Statement of Opinion, NAIC Fire and Casualty Annual
Statement
General Qualification Standards must be met PLUS the
Specific Qualification Standards must be met.