Current CAS Issues and Directions Bob Miccolis, FCAS, MAAA Midwestern Actuarial Forum March 7, 2008 Chicago

2 Agenda CAS Centennial Goal CAS Centennial Goal CAS Education Strategy and Initiatives CAS Education Strategy and Initiatives New Actuarial Qualification Standards New Actuarial Qualification Standards ERM Initiatives ERM Initiatives Academy Update Academy Update Upcoming CAS Events Upcoming CAS Events CUSP CUSP Your Input Your Input

3 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.

4 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 Status of CAS Associate

5 Update on Education Strategy Summary of Feedback: Elective Fellowship Tracks – no real support – career mobility issues. Elective Fellowship Tracks – no real support – career mobility issues. “Deep dive” continuing education offerings – overwhelming support – “boot camps”, etc. “Deep dive” continuing education offerings – overwhelming support – “boot camps”, etc. Possible exams plus workshops for basic education – some support/some concerns. Possible exams plus workshops for basic education – some support/some concerns. Improved study materials – YES. Improved study materials – YES.

6 Update on Education Strategy Board extensively discussed feedback and ideas during its 2007 meetings. Board extensively discussed feedback and ideas during its 2007 meetings. Conclusions to date: Conclusions to date: Board not satisfied with basic education status quo Board not satisfied with basic education status quo Minimize transition issues Minimize transition issues Elective Fellowship tracks – dropped idea Elective Fellowship tracks – dropped idea Capstone Seminar after last exam – still possible Capstone Seminar after last exam – still possible Internet course/exam for topics actuaries “should be familiar with” Internet course/exam for topics actuaries “should be familiar with”

7 Update on Education Strategy No decisions yet on the specific strategy No decisions yet on the specific strategy Implementation - probably not for several years. Implementation - probably not for several years. Transition strategy will be designed to minimize disruption for candidates. Transition strategy will be designed to minimize disruption for candidates.

8 Other Education Issues - Improved Educational Materials Task Force on Developing Education Materials. Task Force on Developing Education Materials. Two Proposals accepted (June 2007) for authors to create educational publications on (1) ratemaking and Two Proposals accepted (June 2007) for authors to create educational publications on (1) ratemaking and (2) reserving. (2) reserving.

9 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.

10 Revised Qualification Standards – Who Do They Apply to? The new Qualification Standards apply to all actuaries who performing Actuarial Services which include opinions, intended by that actuary to be relied upon by the person or organization to which the opinions are provided. The new Qualification Standards apply to all actuaries who performing Actuarial Services which include opinions, intended by that actuary to be relied upon by the person or organization to which the opinions are provided. Such opinions are now considered to be Statements of Actuarial Opinion (SAO’s) – basically any professional opinion expressed by an actuary in the course of performing Actuarial Services. Such opinions are now considered to be Statements of Actuarial Opinion (SAO’s) – basically any professional opinion expressed by an actuary in the course of performing Actuarial Services.

11 General Qualification Standard (Who is a Qualified Actuary) An actuary who meets the following criteria: Member of the Academy, or Fellow or Associate of the SOA or the CAS, Fellow of the CCA, or Member or Fellow of ASPPA, or Fully qualified member of another IAA- member organization; and Three years of responsible actuarial experience

12 General Qualification Standard (Specialty Track Requirements) An actuary is also required to: Have Responsible Actuarial Experience in Specific Area of Actuarial Practice Relevant to the subject of Actuarial Opinion Depending on the Actuary’s Credentials

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 Minimum three hours on professionalism topics Minimum three hours on professionalism topics Minimum six hours from “organized” activities Minimum six hours 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 CAS ERM Initiatives CAS ERM Vision – Actuaries are qualified CAS ERM Vision – Actuaries are qualified 2008 ERM Symposium (SOA/CAS) 2008 ERM Symposium (SOA/CAS) Online Course: Introduction to ERM [Sold Out] Online Course: Introduction to ERM [Sold Out] CAS Meetings and Seminar CAS Meetings and Seminar

15 The ERM Actuary CAS is focused on enhancing the role of actuaries in ERM by: CAS is focused 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; Promoting actuarial skills in addressing ERM issues; Exploring changes to the CAS syllabus. Exploring changes to the CAS syllabus. CAS is not creating an actuarial ERM designation (like the CERA created by the SOA) CAS is not creating an actuarial ERM designation (like the CERA created by the SOA)

Upcoming Events Seminar on Ratemaking - March Boston Seminar on Ratemaking - March Boston Practical Solutions to Predictive Model Design Challenges Webinar - March 20 CAS Web Site Practical Solutions to Predictive Model Design Challenges Webinar - March 20 CAS Web Site ERM Symposium - April Chicago ERM Symposium - April Chicago Testing Loss Reserve Assumptions May 5 Chicago Testing Loss Reserve Assumptions May 5 Chicago Reserve Variability Limited Attendance Seminar - May 6-8 Chicago Reserve Variability Limited Attendance Seminar - May 6-8 Chicago CAS Spring Meeting - June Quebec City CAS Spring Meeting - June Quebec City

Copyright © 2008 by the American Academy of Actuaries American Academy of Actuaries Academy Update & Some Recent Developments

Copyright © 2008 by the American Academy of Actuaries American Academy of Actuaries FOCUS OF THE ACADEMY U.S. Public Policy Issues & U.S. Actuarial Profession Relationships among all U.S. Actuarial Organizations Professionalism for all U.S. Actuaries Support for Actuarial Standards (ASB) and Counseling & Discipline (ABCD)

Copyright © 2008 by the American Academy of Actuaries American Academy of Actuaries NEW STRATEGIC PLAN Meeting the Actuarial Needs of the U.S. Public Taking Proactive Positions on Actuarial Issues affecting the Public Board Committee and Casualty Task Force Formed

Copyright © 2008 by the American Academy of Actuaries American Academy of Actuaries CASUALTY PRACTICE COUNCIL Arm of Academy that works on P & C Issues E.G., Financial Reporting, Terrorism, RBC, Cats, etc. Closely follow Federal Government and NAIC Looks to CAS for Input & Supporting Research Work New Casualty Task Force on Emerging P & C Issue Possible Network of Actuaries Identify Issues & Initial Triage for possible Academy involvement

Copyright © 2008 by the American Academy of Actuaries American Academy of Actuaries COUNCIL OF U.S. PRESIDENTS (CUSP) Academy Board Committee Response to some CRUSAP recommendations Fostering of increased co-operation and co-sponsorship Alternative to merger of U.S. Actuarial Organizations Defining appropriate roles & oversight of U.S. profession

22 We welcome your input regarding... Catastrophe availability and cost issues – How are these actuarial issues? Coverage where it was not intended (Katrina). Communications Skills – More crucial than EVER for actuaries. Should the CAS provide communication training? Rapid Advance of Technology and Science – How does the actuary keep up the tempered by an equal skill for analysis and judgment? (More information/less data) Outsourcing/offshoring – Competition from lower cost and more highly trained “offshore “ actuaries – threat or expansion? Merge the North American Actuarial Organizations? WHAT ELSE?

Thank You!