1. Luis Huerta Rosas Immediate Past President International Actuarial Association DEVELOPMENT OF THE ACTUARIAL PROFESSION IN LATIN AMERCIA November, 2005 Washington, D.C.

2. IAIS International Association of Insurance Supervisors

3. IAIS  Established in 1994  Insurance Supervision Authorities  In over 100 jurisdictions

4. IAIS OBJECTIVES  Promote cooperation among supervision authorities  Establish international standards for insurance supervision and regulation  Provide training to its members  Coordinate work with regulators from other financial sectors and international financial institutions  Develop Standards that can be used by all insurance supervisors around the world

5. IAIS Actuaries are able to: Quantify present and future liabilities Implement standards to determine what should be included in the technical reserves Develop and implement techniques to guarantee sufficiency of the technical reserves and identify how the company’s liabilities are structured in case there are no standards in their jurisdiction

6. IAIS Actuaries must take this standards into consideration when: Developing technical notes on new products Reserves valuation Risk Appraisal (wrong appraisal might cause insolvency)

7. IAIS Actuaries must be certified due to the type of essential activities they carry on in: The supervision process Determining risk Determining premiums Establishing the technical provisions to face liabilities contracted by the insured parties Financial statements Insurance Operation as well as supervision

8. ACTUARIAL PROFESSION IN LATIN AMERICA

9. ACTUARIAL PROFESSION IN LATIN AMERICA Current situation There are very few actuaries What’s going on with insurance companies ? They are hiring mathematicians for actuarial jobs Consequences A general concern about the reliability on the methods and techniques used in this countries on premium calculation and technical reserves.

10. The only countries in Latin America that have Actuarial Associations members of the IAA are: -México -Brasil -Argentina What must be done: Guarantee that actuarial practice is only carried on by insurance specialists Standardize the actuarial profession in Latin America ACTUARIAL PROFESSION IN LATIN AMERICA

11. INTERNATIONAL ACTUARIAL ASSOCIATION

12. INTERNATIONAL ACTUARIAL ASSOCIATION Founded in 1895 Restructured in 1998 One of its main objectives is the development of the actuarial profession The Latin America Subcommittee was constituted in November 2004 as part of the Advice and Assistance Committee

13. PROP0SALS PHASE I: short term PHASE II: long term INTERNATIONAL ACTUARIAL ASSOCIATION

14. PROPOSALS PHASE I To satisfy immediate needs the IAA with the support of the Colegio Nacional de Actuarios (México), will certify professionals with the appropriate knowledge and experience in the actuarial practice. INTERNATIONAL ACTUARIAL ASSOCIATION

15. MEXICAN EXPERIENCE WHAT HAS BEEN DONE SO FAR: Comply with the requirements established by: IAA Syllabus Current Standards of practice The New Vision / Mission of actuaries Mutual Recognition, among others INTERNATIONAL ACTUARIAL ASSOCIATION

16. WHAT HAS BEEN DONE SO FAR: Law changes have taken place that stipulate actuaries developing and signing Technical Notes and/ or valuating technical reserves must: Follow Actuarial standards of practice Have a Professional license Be Certified INTERNATIONAL ACTUARIAL ASSOCIATION MEXICAN EXPERIENCE

17. WHO CERTIFIES? 1. CONAC 2. CNSF HOW? Feel out the application form Comply with all law requirement Have a professional license Pass the necessary exams The actuary may be certified in one or various fields: LifeNon lifeA and H Bonds Pensions INTERNATIONAL ACTUARIAL ASSOCIATION MEXICAN EXPERIENCE

18. CERTIFICATION RENEWAL The certification is renewed every two years HOW? With a continuous Education Program With Professional Practice Exams INTERNATIONAL ACTUARIAL ASSOCIATION THE MEXICAN EXPERIENCE

19. CONAC AND ASSAL Designing material for courses Implementing Courses Developing exams Applying exams Taking into consideration the standards published by IAIS. INTERNATIONAL ACTUARIAL ASSOCIATION IAA PROPOSALS

20. SUBJETCTS TO BE EVALUATED FOR CERTIFICATION Actuarial Practice -Basic concepts -Premium Calculation / Solvency Tests. -Determining Technical Provisions -Valuating / Reserves -Technical Notes -General Operation Regulation according to each jurisdiction INTERNATIONAL ACTUARIAL ASSOCIATION IAA PROPOSALS

21. PHASE II Establishing Actuarial Education Centers Founding Actuarial Associations country wise and / or region wise. INTERNATIONAL ACTUARIAL ASSOCIATION

22. Establishing Actuarial Education Centers Comply with IAA standards and Syllabus Ideally in existing Education Centers or creating faculties at existing Universities (Mexico and Argentina support) (We propose Mexico and Argentina as a basis considering the language) INTERNATIONAL ACTUARIAL ASSOCIATION

23. Founding Actuarial Associations country wise or region wise Region wise: Central America, The Caribbean, South America. Objective: International recognition Getting involved and being updated over actuarial subjects that would be of interest to governments and supranational organizations Developing and maintaining close relations with outstanding international and professional organizations. INTERNATIONAL ACTUARIAL ASSOCIATION

24. A Regional Seminar for Actuarial Leaders and Educators was held in February this year in Panama. Conclusions: Great Interest in founding Actuary Associations Have one or two Actuarial Education Centers in the region by the year 2006 with the support of Universities of Mexico and Argentina. INTERNATIONAL ACTUARIAL ASSOCIATION