CAS Update Part 2 Steve D’Arcy Midwestern Actuarial Forum March 23, 2004

Current CAS Topics n CAS Centennial Goal for 2014 n Educational Process and Recent Exam Changes n Two Important Task Forces n Research Working Parties n Getting Involved in CAS n CAS Web Site n Your input

CAS in 2014 The CAS will be 100 years old!

The Planning Horizon n Core Ideology u Core purpose F A concise statement of the organization’s reason for being u Core values F Essential and enduring tenets of the organization n Years: Envisioned Future u Big audacious goal n 5-10 Years: Critical Factors n 3-5 Years: Strategic Planning n 1-2 Years: Action Planning

Centennial Goal (March ‘03) The CAS will be globally recognized as the preeminent resource in educating casualty actuaries and conducting research in casualty actuarial science. CAS members will be recognized as the leading experts in the evaluation of hazard risk and the integration of hazard risk with strategic, financial and operational risk. The CAS will be globally recognized as the preeminent resource in educating casualty actuaries and conducting research in casualty actuarial science. CAS members will be recognized as the leading experts in the evaluation of hazard risk and the integration of hazard risk with strategic, financial and operational risk.

International Issues n Historically, CAS predominantly North American u 95% of members live and practice in North America u Many papers and syllabus materials use U.S. examples u Major meetings and seminars n “Preeminent global resource” u Support of CAS Members working abroad u Support basic education process in various countries u Exam waivers and mutual recognition u Practice rights for CAS members (Ireland, Australia, India) u Participation in international actuarial community

Risk Integration n Aspects of risk addressed by a multitude of professions u Financial, Operational, Hazard, Strategic n Actuaries can be uniquely positioned to integrate the risks u Tools in our Education Process u Professionalism n Coordinating activities with the SOA u Joint ERM Seminar summer ’03 (CAS led) u ERM and RCMS merge in ’04 under CAS leadership u In conjunction in ’04 with GA State Bowles Research Symposium

Implementing the Centennial Goal n Traditionally Vice Presidents and Committee Chairs have annual goals u To do list u Only occasionally connected to long range plans n LRPC working with other CAS leaders to change our short- and medium-term planning processes u Does my goal support the Centennial Goal? u What does my committee need to be doing in the next three years to support the Goal?

Educational Process n FACT – Travel time is too long! u Partitioning u Syllabus “Creep” n BOARD GUIDANCE TO ADMISSIONS COMMITTEES: u Expect 5 to 7 years as median time from first actuarial employment to FCAS Number of Sittings to Designation Year Achieving Designation ACASFCAS

Exam 3 Pass Ratios Pass Ratios 11/00 05/01 11/01 05/02 11/02 05/03 11/03 11/00 05/01 11/01 05/02 11/02 05/03 11/03 CAS Exam 344% Overall 36% 43% 42% 42% 40% 40%34% CAS Workers 20% 33% 34% 33% 35% 39%24% SOA Workers 26% Non-CAS Workers 31% 38% 36% 36% 31% 35%27% Students 54% 60% 54% 57% 55% 50%47%

Changes to Preliminary Ed n Current u Prerequisites: Linear Algebra and Statistics u Exam 1: Calculus and Probability (4 hours) u Exam 2: Interest, Economics, Finance (4 hours) u Exam 3: Actuarial Models– NOT JOINT (4 hours) u Exam 4: Actuarial Modeling (including applied stats) (4 hours)

Changes to Preliminary Ed Approved March 2004 Board Meeting n Starting Spring 2005 u Prerequisites: Linear Algebra and Calculus u Exam 1: Probability with Calculus (3 hours) u Exam 2: Interest (2 hours) u Exam 3: Actuarial Models & Statistics (4 hours) u Exam 4: Actuarial Modeling (4 hours) u Verification by Educational Experience: Economics, Finance, Applied Stats

Verification by Educational Experience n Option 1: Submit a grade of B- or better and the college catalog u Intermediate Micro and Macroeconomics u Intermediate Corporate Finance u Regression and Time Series (could be separate courses) n Option 2: Pass an appropriate exam, such as the AP exams for Micro and Macroeconomics, CFA exams, etc. n Option 3: Pass college-level exams offered by the CAS (may be joint with the SOA). CAS committed to at least 2 years n Option 4: Other experiences u College correspondence courses u Courses/seminars designed specifically for VEE credit

Transition n 2000 Syllabus u Exam 1  Exam 1 u Exam 2  Exam 2 + VEE for Econ & Finance u Exam 3  Exam 3 u Exam 4  Exam 4 + VEE for Applied Stats n Pre-2000 Syllabus u Part 3A  VEE for Applied Stats u Part 4A  Exam 2 u Part 4B  Exam 4 u Part 5A  VEE for Economics u Part 5B  VEE for Finance

Why VEE? n Most candidates take Econ and/or Finance u No need to examine topics that require background but not mastery u But verification is needed to meet international standards n Test questions for Applied Stats stress memorization rather than application u Our candidates need to learn how to appropriately apply regression and time series models to real data u This competency cannot easily be validated in a timed paper-and-pencil exam

Shorter or Longer? n Actuarial Science majors currently graduate with two or more exams u Unlikely to have much effect on these candidates n Other majors who take VEE courses in school benefit n Candidates who did not have VEE courses in school u Can tackle VEE while studying for interest exam u Or between exam “seasons” u VEE pass rates on first attempt should be very high F Increases predictability of travel time

Another Initiative to Reduce Travel Time n Computer Based Testing u Early exams u Targeting Spring 2005 – Exam 1 u Candidate will receive results immediately u More than two exam “windows” per year n RFP responses currently being evaluated

Exams - Education Consultant n Hired Education Consultant to help: u Construct appropriate learning objectives u Train to develop good thinking questions u Help with methods for setting pass score u Provide input on evaluating exam length and difficulty n CAS Policy: Pass marks reflect sufficient grasp of material. No predetermined pass mark.

Two Important Task Forces n Classes of membership u How many classes should the CAS have? u How should these classes be defined? n What governance rights should ACAS’s have in the CAS? u Vote? All ACAS’s? After N Years? u Chair committees? Which ones? u Serve as a VP? u Serve on the Board?

CAS Board n This is where policy is made n Board meets 4 times per year u May and November at the CAS meetings u March and September n Board meetings are open to the membership! u Come and see how decisions are made in the CAS n May Board meeting u Sunday, May 16 – Colorado Springs u Task Forces on Membership Classes and ACAS Rights

Research Working Parties n Traditional CAS Approach u Focused on individual research u Call paper programs F No interaction among researchers n Working Parties u Focused topic u Collaborative, interactive process u Short (1 year) time frame with report at next meeting u First parties formed at CLRS ‘03

Getting Involved in CAS n Why: u Learn u Make useful contacts u Contribute to your profession n How: u Pick committees/topic(s) that interest you most u Respond to Participation Survey or contact committee chair directly u Join a working party u Write papers u Give presentations u Regional Affiliate involvement

CAS Web Site n u Syllabus, study materials, past exams, study notes n All PCAS (1914), CAS Forums (1987) and Discussion paper programs (1979), ASTIN Journals n ASOPs, Casualty Reserve Practice Note n Discussion forum n Member Services: u Membership Directory u CAS Board Q&A u Board minutes

I welcome your input regarding... n Centennial Goal n CAS role internationally n CAS role outside traditional p/c insurance n Exams and Education Process n Travel time n Membership n Research working parties n What’s on your mind? n Questions?

THANK YOU !!!!!