Webinar on Changes to the CAS Basic Education System November 6, :00 - 1:00 p.m. EDT

Speakers James K. Christie, CAS Vice President- Admissions and Partner, Ernst & Young, LLP James K. Christie, CAS Vice President- Admissions and Partner, Ernst & Young, LLP David L. Menning, CAS Vice President- Admissions Designate and Countrywide Pricing Director, State Farm Mutual Automobile Insurance Company David L. Menning, CAS Vice President- Admissions Designate and Countrywide Pricing Director, State Farm Mutual Automobile Insurance Company Timothy K. Pollis, Chairperson of the Task Force on Basic Education Internet Modules and Actuary, Benfield Timothy K. Pollis, Chairperson of the Task Force on Basic Education Internet Modules and Actuary, Benfield

Developments Leading to the Revised System White Paper on CAS Education Strategy released in November White Paper on CAS Education Strategy released in November Feedback invited through January Feedback invited through January Board discussed feedback and ideas during its 2007 meetings. Board discussed feedback and ideas during its 2007 meetings. Board concluded that: Board concluded that: It was not satisfied with basic education status quo. It was not satisfied with basic education status quo. Minimizing transition issues is a priority. Minimizing transition issues is a priority. Internet course/exam for topics requiring only familiarity should be considered. Internet course/exam for topics requiring only familiarity should be considered.

Developments Leading to the Revised System During the March 2008 Board Meeting: CAS Board approved changes to the CAS basic education structure that will affect current Exams 5-9. CAS Board approved changes to the CAS basic education structure that will affect current Exams 5-9. Board acknowledged that changes will take several years to implement, with implementation occurring no sooner than Board acknowledged that changes will take several years to implement, with implementation occurring no sooner than 2011.

Features of the Revised System No change to No change to Validation by Educational Experience (VEE) Validation by Educational Experience (VEE) Preliminary Actuarial Exams – Preliminary Actuarial Exams – Probability, Probability, Financial Mathematics, Financial Mathematics, Financial Economics, Financial Economics, Life Contingencies and Statistics, and Life Contingencies and Statistics, and Construction and Evaluation of Actuarial Models Construction and Evaluation of Actuarial Models

Features of the Revised System Two-module self-paced internet based course: Two-module self-paced internet based course: Introduction to P&C Insurance, Insurance Operations, Specialized Lines of Business, Miscellaneous Ratemaking Topics, Actuarial Control Cycle. 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). Insurance Accounting Principles, Reinsurance, Background Law, Regulation of Insurance (Canadian and U.S. versions).

Features of the Revised System A four-hour exam covering Basic Ratemaking and Basic Reserving. A four-hour exam covering Basic Ratemaking and Basic Reserving. A four-hour (nation specific) exam covering Regulation and Financial Reporting. A four-hour (nation specific) exam covering Regulation and Financial Reporting. Course on Professionalism. Course on Professionalism.Associate

Features of the Revised System Advanced Ratemaking exam. Advanced Ratemaking exam. Advanced Reserving, Reinsurance and ERM exam. Advanced Reserving, Reinsurance and ERM exam. Investment and Rate of Return exam. Investment and Rate of Return exam.Fellow

Changes from the Current System Additions: Additions: Stochastic Reserving and Reserve Ranges to the Advanced Reserving Exam and Stochastic Reserving and Reserve Ranges to the Advanced Reserving Exam and Actuarial Control Cycle to the internet-based modules. Actuarial Control Cycle to the internet-based modules. Deletion: Deletion: Redundant elements of the current Exam 8 which have been moved to the preliminary exams. Redundant elements of the current Exam 8 which have been moved to the preliminary exams.

Changes from the Current System Reduction of volume of study material Reduction of volume of study material Made possible by enhanced cohesion of topics within each exam. Made possible by enhanced cohesion of topics within each exam. Reduction of the upper level exam hours Reduction of the upper level exam hours Currently 5 exams x 4 hours = 20 hours Currently 5 exams x 4 hours = 20 hours Will be 17 hours (2 four-hour exams and 3 three- hour exams.) Will be 17 hours (2 four-hour exams and 3 three- hour exams.)

Changes from the Current System Internet-based course in two modules consisting of parts of current Exams 5, 6 and 7 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. Material only tested at the familiarity level is moved to an online format.

Rationale for the Revisions A significant portion of the Financial Economics (Exam 8) syllabus is now covered in lower level exams, which allows for restructuring and reducing the exam lengths. A significant portion of the Financial Economics (Exam 8) syllabus is now covered in lower level exams, which allows for restructuring and reducing the exam lengths. In contrast to fewer exams of longer duration, more exams of shorter duration is said to be pedagogically advantageous. In contrast to fewer exams of longer duration, more exams of shorter duration is said to be pedagogically advantageous. Syllabus cohesion can be enhanced by covering related and complementary topics in the same exam, thus reducing the amount of study material and length of exams. Syllabus cohesion can be enhanced by covering related and complementary topics in the same exam, thus reducing the amount of study material and length of exams.

Rationale for the Revisions Delivery of educational material and testing can be enhanced by leveraging the use of technology. Delivery of educational material and testing can be enhanced by leveraging the use of technology. Testing material needing only familiarity can be more efficiently done online as self-paced units. 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. This MAY provide for a more timely achievement of ACAS and FCAS designations.

Transition to the Revised System Transition Rules : Current Exam 5 – Credit for Half Exam on Basic Ratemaking and Internet Module 1. 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 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 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 8 – Credit for Exam on Investments and Rate of Return. Current Exam 9 – Credit for Exam on Advanced Ratemaking. Current Exam 9 – Credit for Exam on Advanced Ratemaking.

Transition to the Revised System Board is aware of the need to provide a transition process to minimize the disruption for candidates. Board is aware of the need to provide a transition process to minimize the disruption for candidates. Approved options facilitate the conversion: 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. 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. This half-exam option will be available for multiple sittings after the official conversion to the new education structure.

Timeline for the Revised System The official conversion to the new education structure will occur no sooner than The official conversion to the new education structure will occur no sooner than 2011.

Questions and Discussion