Casualty Actuarial Society Experienced Practitioner Pathway Seminar Lecture 1 – Introductions and Overview of CERA Designation Stephen P. D’Arcy, FCAS, MAAA, Ph.D. Robitaille Chair of Risk and Insurance California State University – Fullerton D’Arcy Risk Consulting, Inc.

Outline Introductions What is the CERA Designation? –ERM credential –International scope CAS & CERA Actuarial education Key ERM Dates before the CERA Treaty Appendix – Learning Objectives EPP Lecture 1: Introductions and Overview of CERA Designation

Introductions Speakers –Steve D’Arcy –Dave Ingram –Shaun Wang –Rusty Kuehn –Chris Diamantoukos –Jerry Miccolis –Barry Franklin Participants EPP Lecture 1: Introductions and Overview of CERA Designation

What is the CERA? Global actuarial ERM credential –Are there any other ERM credentials that are global? –Grew to 1,000 CERAs in October of 2011 What does CERA mean? –Depends on where you are North America: Chartered Enterprise Risk Analyst UK (IFA): Chartered Enterprise Risk Actuary Benelux: a bank! “C” can also mean “Certified” CERA is the Brand Registered mark in many countries (IP) EPP Lecture 1: Introductions and Overview of CERA Designation

CERA Benefits the worldwide actuarial profession –Strengthens international recognition of the actuarial profession’s ERM expertise –Promotes the development of more ERM actuaries –Presents new opportunities for actuaries –Notifies employers of actuaries’ risk management expertise Advances the ERM (risk management) cause EPP Lecture 1: Introductions and Overview of CERA Designation

Multilateral agreement Signed in November of 2009 in India First global actuarial credential Governs the actions of the CGA including the CERA Treaty Board that it established Every Treaty Signatory agrees to recognize every CERA’s right to practice in its “territory” Every Treaty Signatory agrees to market the CERA CERA Treaty EPP Lecture 1: Introductions and Overview of CERA Designation

Founded on 7 May 2010 (Switzerland) CERA Treaty Board – operational body CGA Board & CGA General Assembly Treaty Administrator – IFA (UK) Funded by Treaty Signatories Marketing – branding, website, Linkedin, Facebook, newsletter, etc. CERA Global Association (CGA) EPP Lecture 1: Introductions and Overview of CERA Designation

Grants Award Signatory status to actuarial associations –Applicant can meet requisite obligations Provide CERA education directly or indirectly Has Continuing Education strategy Is a Full Member Association of the IAA –Review Panel conducts an rigorous review of the association’s CERA program Initial Follow-up reviews –Associations award CERA to qualified actuaries Reviews Syllabus & Educational Standards every 3 years Accepts new CGA members (Treaty Signatories) Maintains website ( CERA Global Association (CGA) EPP Lecture 1: Introductions and Overview of CERA Designation

Australia* Canada* Chinese Taipei (new) France* Germany* Israel Japan* *Award Signatories Mexico Netherlands* South Africa* Sweden* UK* US (CAS* & SOA*) CGA Members (Countries)/ Treaty Signatories (14 = 5 continents) EPP Lecture 1: Introductions and Overview of CERA Designation

Achieve “Fully Qualified Actuary” educational status according to the IAA Satisfy learning objectives of the Treaty –By examination or –By educational courses Award Signatory (A. S.) is satisfied that the candidate has not been subject to any disciplinary actions that might tarnish the CERA designation Adhere to Code of Professional Conduct of the A. S. Provided written consent in perpetuity for the free exchange of information on disciplinary matters “Meet” continuing education requirements of the actuarial association to which the CERA belongs Agree to cease to use the designation if it is withdrawn How do I qualify to become a CERA? EPP Lecture 1: Introductions and Overview of CERA Designation

Recognize experienced ERM practitioners CGA benefits from their becoming CERAs because of their expertise/reputation One-time opportunity Short-term program Limited number of CERAs from this program Experienced Practitioner Pathway (EPP) EPP Lecture 1: Introductions and Overview of CERA Designation

Permanent or temporary Violates the Code of Conduct of Award Signatory (A. S.) Fails to pay appropriate fees to the A. S. A. S. receives relevant information that results in the A. S. withdrawal of the CERA A. S. advises all Treaty Signatories of the withdrawal Withdrawal of CERA by Award Signatory EPP Lecture 1: Introductions and Overview of CERA Designation

“CERAs develop effective solutions for the risks and opportunities of their clients” Uniquely qualified to address all types of risk –ERM qualitative & quantitative aspects –Integrating diverse insights into business solutions Professional standards of conduct –Public –Their clients and employers –Actuarial profession Businesses that rely on CERAs –Make more confident decisions related to complex ERM challenges CERA Value Proposition EPP Lecture 1: Introductions and Overview of CERA Designation

Financial crisis demonstrated how national economies are interdependent –Need for strong technical skills –Professional and ethical behavior Many large entities are global or multi-national Actuaries play a growing role in financial conglomerates and banks Solvency II sets up an actuarial function within most major financial institutions; actuaries should also contribute to entity’s risk management CERAs should be able to move freely across borders to meet growing and varying demands by country Why is International Important? EPP Lecture 1: Introductions and Overview of CERA Designation

Does specify the minimum level of actuarial education that an association has to satisfy to be a full member Does not provide any actuarial designation Is a strong ERM supporter with its supranational ties International Association of Insurance Supervisors (IAIS) –NAIC is an IAIS member and is influenced by IAIS actions –NAIC has its Solvency Modernization Initiative (SMI) Pursues acceptance of CERA by regulators Role of International Actuarial Association (IAA) EPP Lecture 1: Introductions and Overview of CERA Designation

CERA Transfer of Supervision Some CAS members, who received the CERA from the SOA, want to drop their SOA membership/dues and want to be under CAS CERA supervision Is likely to be more popular in Europe and Asia Need mutual agreement of both associations Ensure that there are no outstanding discipline issues EPP Lecture 1: Introductions and Overview of CERA Designation

Treaty Board approved CAS as an Award Signatory (2011) - standard (exam) route ACAS Exam 7 - Policy Liabilities, Insurance Company Valuation & ERM Exam 9 - Financial Risk and Rate of Return ERMM Seminar (2 sessions per year) – ERM & modeling IFA (UK) ST-9 exam Redevelop/Resubmit the P&C route to CERA? Experienced Practitioner Pathway (EPP) –Fewer than 100 CERAs CAS & CERA EPP Lecture 1: Introductions and Overview of CERA Designation

CGA member CAS –VP-ERM –CAS ERM Committee –Admissions Committees –Research Committees –Continuing Education –Marketing Joint Risk Management Section ERM Symposium CAS & CERA EPP Lecture 1: Introductions and Overview of CERA Designation

CAS & CERA & You Volunteer; get involved! Invest in your future Invest in your CERA Invest in your employer Invest in your profession EPP Lecture 1: Introductions and Overview of CERA Designation

1.Financial Mathematics 2.Probability And Mathematical Statistics 3.Economics 4.Accounting 5.Modeling 6.Statistical Methods 7.Actuarial Mathematics 8.Investment And Asset Analysis 9.Actuarial Risk Management 10.Professionalism Actuarial Education Syllabus Developed by the IIA (Basic Actuarial Syllabus) EPP Lecture 1: Introductions and Overview of CERA Designation

1.ERM Concept and Framework 2.ERM Process 3.Risk Categories and Identification 4.Risk Modeling and Aggregation of Risk 5.Risk Measures 6.Risk Management Tools and Techniques 7.Economic Capital CERA Learning Objectives (Beyond Basic Actuarial Syllabus) EPP Lecture 1: Introductions and Overview of CERA Designation

1.Knowledge - Define 2.Comprehension - Describe 3.Application - Demonstrate 4.Analysis - Calculate 5.Synthesis - Develop 6.Evaluation - Assess Bloom’s Taxonomy of Levels of Learning EPP Lecture 1: Introductions and Overview of CERA Designation

Key ERM Dates before CERA Treaty CAS ERM Advisory Committee CAS ERM Committee – –Seminal paper, “Overview of ERM” Joint Risk Management Section Joint CAS/SOA ERM Symposium – CAS VP-ERM – –CAS ERM vision ERMII (ERM Institute International) – CERA designation (SOA) – EPP Lecture 1: Introductions and Overview of CERA Designation

Appendix - Learning Objective EPP Lecture 1: Introductions and Overview of CERA Designation