Current CAS Issues and Directions Joanne Spalla MAF Fall Meeting September 21, 2007

2 Agenda CAS Centennial Goal CAS Centennial Goal CAS Education Strategy and Initiatives CAS Education Strategy and Initiatives New AAA Qualification Standards New AAA Qualification Standards New Variance Journal New Variance Journal ERM Initiatives ERM Initiatives Your Input Your Input

3 CAS Centennial Goal March 2003 March 2003 CAS Board adopted the Centennial Goal. CAS Board adopted the Centennial Goal. November 2006 November 2006 LRPC presented its annual report to the Board; Board agreed to revisit the goal. LRPC presented its annual report to the Board; Board agreed to revisit the goal. March 2007 March 2007 Board reaffirmed the long-term vision for CAS; approved refreshed wording for the Goal. Board reaffirmed the long-term vision for CAS; approved refreshed wording for the Goal.

4 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.

5 Update on Education Strategy White Paper on CAS Education Strategy Released in November 2006 and feedback invited via online survey through January Released in November 2006 and feedback invited via online survey through January Proposed: Proposed: Optional tracks for Fellowship Optional tracks for Fellowship Enhanced continuing education program Enhanced continuing education program Non-exam evaluation methods Non-exam evaluation methods

6 Update on Education Strategy Summary of Feedback: Fellowship tracks did not garner broad support – concern with impeding career mobility. Fellowship tracks did not garner broad support – concern with impeding career mobility. Providing more rigorous continuing education offerings was strongly supported. Providing more rigorous continuing education offerings was strongly supported. Required workshops for basic education – some support for testing knowledge and skills. Required workshops for basic education – some support for testing knowledge and skills. Desire for improved study materials. Desire for improved study materials.

7 Update on Education Strategy Board has discussed feedback and ideas during March, June, September 2007 meetings. Board has discussed feedback and ideas during March, June, September 2007 meetings. Conclusions to date: Conclusions to date: Changes will be made to basic education Changes will be made to basic education Minimizing transition issues is a priority Minimizing transition issues is a priority Will not pursue Fellowship tracks Will not pursue Fellowship tracks Supports idea of Capstone Seminar Supports idea of Capstone Seminar Considering Internet-based course for topics requiring only familiarity Considering Internet-based course for topics requiring only familiarity

8 Update on Education Strategy No implementation timeline has been contemplated at this point. No implementation timeline has been contemplated at this point. We will not have details on implementation until we first decide on the specific strategy. We will not have details on implementation until we first decide on the specific strategy. Implementation will not occur for several years. Implementation will not occur for several years. Implementation plan will include a transition strategy designed to minimize disruption for candidates. Implementation plan will include a transition strategy designed to minimize disruption for candidates.

9 Other Education Issues - Improved Educational Materials Board established the Task Force on Developing Education Materials. Board established the Task Force on Developing Education Materials. Task Force issued two Requests For Proposals for authors to create educational publications on (1) ratemaking and (2) reserving. Task Force issued two Requests For Proposals for authors to create educational publications on (1) ratemaking and (2) reserving. Board awarded contracts following the June 2007 meeting. Board awarded contracts following the June 2007 meeting. Ratemaking – EMB America Ratemaking – EMB America Reserving – KPMG Reserving – KPMG

10 Other Education Issues - Candidate Code of Conduct Board approved adoption of a Code of Professional Ethics for Candidates, and Rules of Procedure for Disciplinary Actions Involving Candidates Board approved adoption of a Code of Professional Ethics for Candidates, and Rules of Procedure for Disciplinary Actions Involving Candidates Purpose: to require Actuarial Candidates to adhere to the high standards of conduct, practice, and qualifications of the actuarial profession. Purpose: to require 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. Effective: with registration for the 2008 Spring exam sitting.

11 Revised Qualification Standards – Who Do They Apply to? The new Qualification Standards will apply to all actuaries that issue Statements of Actuarial Opinion (SAO’s). The new Qualification Standards will apply to all actuaries that issue Statements of Actuarial Opinion (SAO’s). SAO is an opinion expressed by an actuary in the course of performing Actuarial Services and intended by that actuary to be relied upon by the person or organization to which the opinion is addressed. SAO is an opinion expressed by an actuary in the course of performing Actuarial Services and intended by that actuary to be relied upon by the person or organization to which the opinion is addressed.

12 General Qualification Standard To satisfy the General Qualification Standard, an actuary must meet the following criteria: Be a Member of the Academy, a Fellow or Associate of the SOA or the CAS, a Fellow of the CCA, a Member or Fellow of ASPPA, or a fully qualified member of another IAA-member organization; and Have three years of responsible actuarial experience

13 New Continuing Education Requirements Annual continuing education requirements will increase to 30 hours per year Annual continuing education requirements will increase to 30 hours per year A minimum of three CE credit hours must cover professionalism topics A minimum of three CE credit hours must cover professionalism topics A minimum of six must be from “organized” activities A minimum of six must be from “organized” activities A credit hour is 50 minutes A credit hour is 50 minutes 2008 will be a transition year 2008 will be a transition year

14 New CAS Journal

15 ERM Initiatives ERM Vision ERM Vision 2008 ERM Symposium 2008 ERM Symposium Online Course: Introduction to ERM Online Course: Introduction to ERM 2007 CAS Spring Meeting – ERM track (six sessions) 2007 CAS Spring Meeting – ERM track (six sessions)

16 ERM for CAS Committee Prioritized actuarial credibility as the most important strategic risk for the CAS. Prioritized actuarial credibility as the most important strategic risk for the CAS. Developed Crisis Communication Plan. Developed Crisis Communication Plan. Addressed catastrophe risk as it pertains to: Addressed catastrophe risk as it pertains to: CAS Office (Disaster Recovery Plan) CAS Office (Disaster Recovery Plan) CAS Web Site CAS Web Site

17 CERA Chartered Enterprise Risk Analyst What is CERA? What is CERA? New Associate-level credential offered by the SOA. New Associate-level credential offered by the SOA. CAS position: CAS position: In 2005, the CAS Board resolved that at this time, the Board discourages consideration of an independent ERM credential sponsored by the actuarial profession. In 2005, the CAS Board resolved that at this time, the Board discourages consideration of an independent ERM credential sponsored by the actuarial profession.

18 CERA Chartered Enterprise Risk Analyst CAS position: CAS position: The CAS, in conjunction with the Risk Management Section, should focus on enhancing the role of actuaries in ERM by: The CAS, in conjunction with the Risk Management Section, should focus on enhancing the role of actuaries in ERM by: Providing continuing education on ERM; Providing continuing education on ERM; Conducting research to address unanswered ERM questions (e.g., operational risks, risk aggregation) Conducting research to address unanswered ERM questions (e.g., operational risks, risk aggregation) Promoting actuarial skills in addressing ERM issues; and Promoting actuarial skills in addressing ERM issues; and Exploring possible changes to the CAS basic education syllabus. Exploring possible changes to the CAS basic education syllabus.

Calendar of Events NEW - Reserve Variability Webinar September 27, 2007 NEW - Reserve Variability Webinar September 27, 2007 Predictive Modeling Seminar October 11-12, 2007, Las Vegas Predictive Modeling Seminar October 11-12, 2007, Las Vegas Annual Meeting November 11-14, 2007, Chicago Annual Meeting November 11-14, 2007, Chicago Seminar on Ratemaking March 17-18, 2008, Boston Seminar on Ratemaking March 17-18, 2008, Boston ERM Symposium April 14-16, 2008, Chicago ERM Symposium April 14-16, 2008, Chicago

20 I welcome your input regarding... CAS Centennial Goal CAS Centennial Goal CAS Education Strategy and Initiatives CAS Education Strategy and Initiatives New AAA Qualification Standards New AAA Qualification Standards CAS Publications CAS Publications ERM Initiatives ERM Initiatives Other Topics Other Topics Questions? Questions?

Thank You! Joanne Spalla MAF Fall Meeting September 21, 2007