Current CAS Issues
and Directions
Tom Myers, CAS Chairman of the Board
Casualty Actuaries of Europe
May 22, 2008
Agenda

CAS Centennial Goal

CAS Membership by Geography

ERM Initiatives

New CAS Basic Education Structure

Professionalism Issues

Upcoming Events


A New Seminar for 2009
Your Input
CAS Centennial Goal
The CAS will be recognized globally as a leading
resource in educating casualty actuaries and
conducting research in casualty actuarial science.
CAS members will advance their expertise in
pricing, reserving, and capital modeling; and
leverage their skills in risk analysis to become
recognized as experts in the evaluation of
enterprise risks, particularly for the property and
casualty insurance industry.
Geographic Distribution of
CAS Membership
4000
3500
3000
2500
2000
1500
1000
500
0
2008
U.S.
Canada
Bermuda
Europe
Other
Europe Breakdown
40
40
35
30
26
25
20
15
10
7
4
5
4
3
2
1
0
Nation
U.K.
Ireland
Switzerland
Sweden
Germany
Netherlands
France
Spain
CAS Enterprise Risk
Management Initiatives

CAS ERM Vision – Actuaries are qualified

CAS Risk Management Committee

2008 ERM Symposium (SOA/CAS and others)

Online Course: Introduction to ERM

ERM2 (Enterprise Risk Management and Modeling)

Sessions at CAS Meetings and Seminars
The ERM Actuary

CAS is focused on enhancing our role in ERM by:
 Providing
continuing education on ERM;
 Conducting
research to address unanswered ERM
questions (e.g., operational risks, risk aggregation)
 Promoting
 Exploring

actuarial skills in addressing ERM issues;
changes to the CAS syllabus.
CAS has not created an ERM designation
(i.e., the CERA created by the SOA)
Revised CAS Basic
Education Structure
March 2008 CAS Board Meeting:
 Approved changes to the CAS basic
education structure that will affect
current Exams 5-9.
 Implementation will occur no sooner
than 2011 sittings.
Revised CAS Basic
Education Structure
Features of the Revised Basic Education System:
 No change to


Validation by Educational Experience (VEE)
Preliminary Actuarial Exams –





Probability,
Financial Mathematics,
Financial Economics,
Life Contingencies and Statistics, and
Construction and Evaluation of Actuarial Models
Revised CAS Basic
Education Structure
Features of the Revised Basic Education System:

Two module self-paced internet based course:


Introduction to P&C Insurance, Insurance
Operations, Specialized Lines of Business,
Miscellaneous Ratemaking Topics, Actuarial
Control Cycle.
Insurance Accounting Principles, Reinsurance,
Background Law, Regulation of Insurance
(Canadian and U.S. versions).
Revised CAS Basic
Education Structure
Features of the Revised Basic Education System:
 A four-hour exam covering Basic
Ratemaking and Basic Reserving.
 A four-hour (nation specific) exam covering
Regulation and Financial Reporting.
 Course on Professionalism.
Associateship Criteria
Revised CAS Basic
Education Structure
Features of the Revised Basic Education System:
 Advanced Ratemaking exam.
 Advanced Reserving, Reinsurance and
ERM exam.
 Investment and Rate of Return exam.
Fellowship Criteria
Revised CAS Basic
Education Structure
Changes From the Current System:

Internet-based course in two modules consisting
of parts of current Exams 5, 6 and 7

Material only tested at the familiarity level is moved to
an online format.
Reduction of the upper level exam hours



Currently 5 exams x 4 hours = 20 hours
Will be 17 hours, 2 four-hour exams and 3 three-hour
exams.
Revised CAS Basic
Education Structure
Changes From the Current System:

Additions


Deletion



Stochastic Reserving and Reserve Ranges to the
Advanced Reserving Exam and
Actuarial Control Cycle to the internet-based
modules.
redundant elements of the current Exam 8 which
have been moved to the preliminary exams.
Reduction of volume of study material.
Revised CAS Basic
Education Structure
Rationale for the revisions:

Leveraging the use of technology.

Testing material needing only familiarity can be
more efficiently done online as self-paced units.

This MAY provide for a more timely
achievement of ACAS and FCAS designations.
Revised CAS Basic
Education Structure
Board is aware of the need to provide a transition
process to minimize the disruption for candidates.
Approved options facilitate the conversion:




If a candidate has credit for only one of the required exams
(either Exam 5 or Exam 6), the candidate will be allowed to
take just the part of the new exam for which he/she is missing
credit in order to obtain credit for the new exam.
This half-exam option will be available for multiple sittings
after the official conversion to the new education structure,
which will occur no sooner than 2011.
Revised CAS Basic
Education Structure
Transition Rules:

Current Exam 5 – Credit for Half Exam on Basic
Ratemaking and Internet Module 1.

Current Exam 6 – Credit for Half Exam on Basic
Reserving and Exam on Advanced Reserving,
Reinsurance and ERM.

Current Exam 7 – Credit for Exam on Regulation and
Financial Reporting and Internet Module 2.

Current Exam 8 – Credit for Exam on Investments and
Rate of Return.

Current Exam 9 – Credit for Exam on Advanced
Ratemaking.
New Educational Materials




Two consultants engaged to prepare an entire
set of materials for the ratemaking and reserving
portions of current CAS Exams 5 and 6.
Implementation Task Forces working closely
with authors.
Final publications due by December 31, 2008.
Expected to be included on 2010 Syllabus of
Exams.
Candidate Code of Conduct



Board approved adoption of a Code of
Professional Ethics for Candidates, and Rules of
Procedure for Disciplinary Actions Involving
Candidates
Requires Actuarial Candidates to adhere to the high
standards of conduct, practice, and qualifications
of the actuarial profession.
Effective with registration for the 2008 Spring
exam sitting.
Professionalism
Code of Professional Conduct
 PRECEPT 2. An Actuary shall perform Actuarial
Services only when the Actuary is qualified to do so
on the basis of basic and continuing education and
experience and only when the Actuary satisfies
applicable qualification standards.

ANNOTATION 2-1. It is the professional responsibility of an
Actuary to observe applicable qualification standards that have
been promulgated by a Recognized Actuarial Organization for
the jurisdictions in which the Actuary renders Actuarial Services
and to keep current regarding changes in these standards.
Professionalism
Code of Professional Conduct
 PRECEPT 3. An Actuary shall ensure that
Actuarial Services performed by or under the
direction of the Actuary satisfy applicable
standards of practice.

ANNOTATION 3-1. It is the professional
responsibility of an Actuary to observe applicable
standards of practice that have been promulgated by a
Recognized Actuarial Organization for the jurisdictions
in which the Actuary renders Actuarial Services and to
keep current regarding changes in these standards.
Professionalism
Actuaries practicing in the United States:
 Must follow standards promulgated by the
American Academy of Actuaries and Actuarial
Standards Board.
Actuaries practicing in other countries:
 Responsible for determining the standards that
apply in their country of practice.
U.S. Qualification Standard
(Who Do They Apply to?)


The new Qualification Standards apply to all
actuaries performing Actuarial Services, which
includes opinions, intended by that actuary to be
relied upon by the person or organization to
which the opinions are provided.
Such opinions are now considered to be
Statements of Actuarial Opinion (SAO’s) –
basically any professional opinion expressed by
an actuary in the course of performing Actuarial
Services.
U.S. Qualification Standard
(Who is a Qualified Actuary?)
An actuary who meets the following criteria:
 Member
of the Academy, or
 Fellow or Associate of the CAS or the SOA,
 Fellow of the CCA, or
 Member or Fellow of ASPPA, or
 Fully qualified member of another IAAmember organization; and
 Three years of responsible actuarial
experience
U.S. Qualification Standard
(Specialty Track Requirements)
An actuary is also required to:
 Have
Responsible Actuarial Experience in
 Specific
Area of Actuarial Practice
 Relevant
to the subject of Actuarial Opinion
U.S. Qualification Standard
(New CE Requirements)

Annual continuing education requirements will
increase to 30 hours per year

Minimum three hours on professionalism topics

Minimum six hours from “organized” activities

A credit hour is 50 minutes

2008 is a transition year (24 hours required)
SOA CE Requirements




March 2007 – SOA Board approved a motion
establishing a Continuing Professional
Development Requirement for SOA members.
Nov 2007 – Released exposure draft to allow
members to comment on the provisions;
comment deadline February 2008.
June 2008 – Board will approve a final
implementation plan.
Jan 2009 – SOA requirement effective.
Future Events





CAS Spring Meeting, June 15-18, Quebec –
Joint Meeting Day with CIA and SOA
2008 ASTIN Colloquium, July 13-16,
Manchester, UK
Casualty Loss Reserve Seminar,
September 18-19, Washington, D.C.
CAS Annual Meeting, November 16-19,
Seattle
Look for announcements regarding upcoming
webinars.
Changes to
Professional Education


In 2007, a Task Force considered ways to
restructure the Ratemaking Seminar and
Predictive Modeling Seminar.
The Executive Council approved building a new
Seminar that will draw on the best aspects of the
Traditional Ratemaking Seminar and the newer
Predictive Modeling Seminar.
Changes to
Professional Education
New Seminar will recognize and reflect how the
role of the actuary has expanded over the past
twenty years.
Integrated seminar that covers:







Product development
Product management
Pricing
Underwriting
Marketing
Changes to
Professional Education
There will be a Predictive Modeling Seminar in
October 2008.
In 2009, the CAS will not offer a Ratemaking
Seminar or a Predictive Modeling Seminar




These offerings will be replaced by the new Seminar.
The dates of the new Seminar in 2009 have not
yet been finalized.
Strategic Planning Committee
welcomes your input regarding:

Catastrophe availability and cost issues – How are these actuarial
issues? For example, coverage where it was not intended (Katrina).

Communications Skills – More crucial than EVER for actuaries.
Should the CAS provide communication training?

Rapid Advance of Technology and Science – How does the
actuary balance rapid technological changes and expanding data
availability with an equal skill for analysis and judgment? (More
information/less data)

Outsourcing/offshoring – Competition from lower cost qualified
“offshore” actuaries – threat or expansion?

Merge the North American Actuarial Organizations?

WHAT ELSE?
Thank You!
Tom Myers
Casualty Actuarial Society
Chairman of the Board
Casualty Actuaries of Europe
May 22, 2008