Title: CAS Update Where Weve Been, Where We Are, and Where Were Going
1CAS UpdateWhere Weve Been, Where We Are, and
Where Were Going
Meeting of the Casualty Actuaries of the
Southeast September 23, 2004
Presented by Robert F. Wolf, FCAS, MAAA Mercer
Oliver Wyman, Inc. 312-930-0648
Office rwolf_at_mow.com
2Agenda
- Two Important Task Forces
- Task Force on ACAS Vote
- Task Force on Classes of Membership
- Education Initiatives
- Your Input
3Two Important Task Forces
- Task Force on the ACAS Vote
- Should Associates have voting rights?
- All ACAS? After N Years as an ACAS?
- Stand for election to the Board?
- Hold officer positions, e.g., Vice President?
- Serve on and chair committees? Which ones?
- Task Force on Classes of Membership
- How many classes should the CAS have?
- How should these classes be defined?
4Historical Perspective of Associates
- Since 1914, two classes of membership.
- Associate/Fellow designations have changed over
the years - Initially, based on company responsibilities.
- Beginning in 1915, based on exams
- Number and content of exams has varied.
- Currently a two exam educational difference.
- Currently little distinction between FCAS and
ACAS in the ability to perform professional
actuarial services.
5Task Force on ACAS Vote
- Why are we considering this issue?
- Voting rights have not changed since inception
and represent a time when there was a much
clearer distinction between Fellows and
Associates. - A significant minority (25-30) of Associates
have stopped taking exams. We need to recognize
the career Associates. - Lack of true representation for Associates,
despite the fact that they pay full dues. - Approval of Mutual Recognition.
6Task Force on ACAS Vote
- Right to vote should be given to members upon
attainment of Fellowship or five years after they
are recognized as Associates, whichever comes
first. Right to vote should be unrestricted. - All voting members should be allowed to stand for
election to the Board of Directors. - Voting Associates may hold all officer positions,
with the exception of - President / President Elect
- Vice President - Admissions
- Committee membership is to remain restricted to
Fellows for Discipline, Education Policy,
Syllabus.
7Task Force on Classes of Membership
- Why are we considering this issue?
- Current structure reflects a time when there was
a much clearer distinction between FCAS and ACAS.
- Educational differences do not restrict an ACAS
from completing assignments like those done by a
FCAS. - Associate designation connotes lesser standing,
even though the ACAS is fully qualified to sign
statements of actuarial opinion. - Two designations that each mean a fully qualified
actuary is confusing. - CAS organizational structure has not been widely
adopted worldwide.
8Task Force on Classes of Membership
- The Task Force recommended
- Only one class of membership - Fellow.
- Certificate of Achievement in Casualty Actuarial
Science. - All candidates under the Code of Professional
Conduct. - ACAS continue to be awarded for a limited time.
- Existing ACASs awarded FCAS after completing
exams or after five additional years have passed. - Ideal number of exams for Fellowship is eight
necessary material can be reorganized to fit.
9Task Force on Classes of Membership
- In May 2004, the Board discussed the various
transition options in the Task Force Report. - Options ranged from
- Immediately granting FCAS to ACAS and
discontinuing ACAS - Completion of additional requirements
- Discontinuing ACAS after a transition period and
putting the ACAS into run-off. - Under no circumstances would current Associates
lose their status as members of the CAS.
10Task Force on Classes of Membership
- Additional information was requested for the
Boards consideration during the discussion at
September Board Meeting. - Survey of the Membership Advisory Panel (MAP).
- Feedback from Regional Affiliate Presentations.
- Interviews with recruiters on the effects of one
class of membership on attracting candidates. - Feedback submitted by members.
11Task Force on Classes of Membership
- Summary of additional feedback received
- Over two-thirds (70) of the MAP agreed with TF
recommendation of one class. - More than three-fourths (77) disagreed with the
TF recommendation to grant all ACAS the FCAS
designation without additional requirements. - Most of the feedback has indicated that one class
of membership will not create a competitive
disadvantage for students.
12Task Force on Classes of Membership
- Board Motions at September Board Meeting
- That the Board instruct the Executive Council to
establish a TF to propose within the next year a
set of learning objectives by which FCAS can be
attained - with less material than the current exams,
- with fewer than the current 9 exams,
- while meeting the requirements of the IAA,
- while being consistent with the Centennial Goal.
- It is the Boards sense that this can be
accomplished with eight exams (or seven exams
with a workshop or seminar).
13Task Force on Classes of Membership
- Board Motions at September Board Meeting
- Inform the CAS membership of the foregoing
action, with an indication that the Board
supports a move to an eventual single class of
credentialed membership, with no more new
Associates, concurrent with the movement to a
shorter syllabus and will seek membership
reaction to this plan. (It is expected that the
then-current Associates will either complete
their remaining exams and become Fellows, or
remain Associates until they cease their
membership in the CAS.)
14Membership Involvement
- Board is committed to obtaining member input.
- Granting voting rights requires an amendment to
the Constitution approved by Fellows, however,
the Board agreed to postpone further action on
the ACAS Vote, pending resolution of the Classes
of Membership issue. - Moving to one class of credentialed member may
not require a change to the Constitution, but
there will be a thorough exchange of ideas.
15Changes to Preliminary Education
- Current
- Prerequisites Linear Algebra and Statistics
- Exam 1 Calculus and Probability (4 hours)
- Exam 2 Interest, Economics, Finance (4 hours)
- Exam 3 Actuarial Models NOT JOINT (4 hours)
- Exam 4 Actuarial Modeling (including applied
stats) (4 hours)
16Changes to Preliminary Education
- Approved March 2004 Board Meeting
- Starting Spring 2005
- Prerequisites Linear Algebra and Calculus
- 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)
- Verification by Educational Experience
Economics, Finance, Applied Stats
17Validation by Educational Experience
- Option 1 Submit a course syllabus for approval,
and then a grade of B- or better in the course. - Micro and Macro Economics
- Intermediate Corporate Finance
- Regression and Time Series (could be separate
courses) - Option 2 Pass an acceptable exam, such as the
AP exams for Micro and Macroeconomics, CFA exams,
etc. - Option 3 Pass college-level exams offered by
the CAS. CAS committed to offering these for at
least 2 years. - Option 4 Other experiences.
- Courses/seminars designed specifically for VEE
credit
18Transition
- 2000 Syllabus
- Exam 1 ? Exam 1
- Exam 2 ? Exam 2 VEE for Econ Finance
- Exam 3 ? Exam 3
- Exam 4 ? Exam 4 VEE for Applied Stats
- Pre-2000 Syllabus
- Part 3A ? VEE for Applied Stats
- Part 4A ? Exam 2
- Part 4B ? Exam 4
- Part 5A ? VEE for Economics
- Part 5B ? VEE for Finance
19Why VEE?
- Most candidates take Econ and/or Finance
- No need to examine topics that require background
but not mastery. - But verification is needed to meet international
standards. - Test questions for Applied Stats stress
memorization rather than application. - Our candidates need to learn how to appropriately
apply regression and time series models to real
data. - This competency cannot easily be validated in a
timed paper-and-pencil exam.
20Impact on Travel Time
- Actuarial Science majors currently graduate with
exams. - Unlikely to have much effect on these candidates.
- Other majors who take VEE courses in school
benefit from learning experience. - Candidates who did not have VEE courses in
school - Can tackle VEE while studying for Interest exam.
- Or between exam seasons.
- VEE pass rates on first attempt should be very
high.
21Other Ways to Reduce Travel Time
- Computer Based Testing
- Targeting 2005 pilot for Exam 1.
- Expand to 4-6 computer-based administrations in
2006. - Candidate will receive results immediately
(beginning in 2006). - Will expand to other exams if successful.
- Approved at May 2004 Board Meeting. Awaiting
approval by SOA.
22Other Ways to Reduce Travel Time
- More Efficient Study Material
- Too much material not written for study purposes.
- Institute of Actuaries (UK) hired one vendor to
produce all study material. - Material written specifically for study purposes.
- Enabled increased pass rates despite expanded
syllabus breadth. - CAS Task Force determined that this approach
could work for us. - Syllabus Committee charged with implementing.
- Targeting 2005 pilot for Exam 1.
23Education Consultant
- Hired Education Consultant to help
- Construct appropriate learning objectives.
- Train to develop good thinking questions.
- Help with methods for setting pass score.
- Provide input on evaluating exam length and
difficulty. - CAS Policy Pass marks reflect sufficient grasp
of material. No predetermined pass mark.
24Modeling Workshop
- Education in risk integration techniques is
consistent with Centennial Goal. - DFA added to Syllabus in 2000.
- DFA taken off Part 8 in 2003 due to inability to
test in a paper-and-pencil environment. - Modeling Workshop Task Force established.
- Pilot a hands-on workshop experience in late
2004. - Consider adding this as a future FCAS requirement
and/or continuing education opportunity.
25I welcome your input regarding . . .
- ACAS Task Forces
- Education Initiatives
- CAS Centennial Goal
- International Issues
- CAS Role Outside Traditional P/C Insurance
- Membership
- Research and Publications
- Whats On Your Mind?
- Questions?
26Robert F. Wolf, FCAS, MAAA Mercer Oliver Wyman,
Inc. 312-930-0648 Office rwolf_at_mow.com Member of
the CAS Board of Directors