1. Current CAS Issues and Directions Sheldon Rosenberg CAGNY Meeting Dec. 6, 2004, New York City

2. Agenda CAS Centennial Goal CAS Centennial Goal Two Important Task Forces Two Important Task Forces Task Force on ACAS Vote Task Force on ACAS Vote Task Force on Classes of Membership Task Force on Classes of Membership

3. CAS Centennial Goal 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

4. Implementing the Centennial Goal Centennial Goal Implementation Task Force Centennial Goal Implementation Task Force Subcommittee of Long Range Planning Committee Subcommittee of Long Range Planning Committee Working with Vice Presidents and Committee Chairs in setting goals. Working with Vice Presidents and Committee Chairs in setting goals. How does my committee and its goals support the Centennial Goal? How does my committee and its goals support the Centennial Goal? SAM Goals SAM Goals Significant, Attainable, Measurable Significant, Attainable, Measurable Interim milestones to help gauge progress towards the Centennial Goal. Interim milestones to help gauge progress towards the Centennial Goal.

5. Two Important Task Forces Task Force on the ACAS Vote Task Force on the ACAS Vote Should Associates have voting rights? Should Associates have voting rights? All ACAS? After N Years as an ACAS? All ACAS? After N Years as an ACAS? Stand for election to the Board? Stand for election to the Board? Hold officer positions, e.g., Vice President? Hold officer positions, e.g., Vice President? Serve on and chair committees? Which ones? Serve on and chair committees? Which ones? Task Force on Classes of Membership Task Force on Classes of Membership How many classes should the CAS have? How many classes should the CAS have? How should these classes be defined? How should these classes be defined?

6. Historical Perspective of Associates Since 1914, two classes of membership. Since 1914, two classes of membership. Associate and Fellow designations have changed over the years: Associate and Fellow designations have changed over the years: Initially, based on company responsibilities. Initially, based on company responsibilities. Fellows: Department heads. Fellows: Department heads. Associates: Actuaries who worked within departments. Associates: Actuaries who worked within departments. Beginning in 1915, based on exams: Beginning in 1915, based on exams: Number and content of exams has varied. Number and content of exams has varied. Currently a two-exam educational difference. Currently a two-exam educational difference.

7. Where is the ACAS Now? Educational difference is limited. Educational difference is limited. Both FCAS and ACAS are MAAA. Both FCAS and ACAS are MAAA. Continuing ed requirements are the same. Continuing ed requirements are the same. Generally little distinction in U.S. (AAA, NAIC) between FCAS and ACAS license to perform professional actuarial services. Generally little distinction in U.S. (AAA, NAIC) between FCAS and ACAS license to perform professional actuarial services. Most nations have one class of membership. Most nations have one class of membership. Already an issue in Canada (CIA). Already an issue in Canada (CIA). Complicates mutual recognition agreements. Complicates mutual recognition agreements. IAA educational requirements also an issue. IAA educational requirements also an issue.

8. Task Force on ACAS Vote Why are we considering this issue? Voting rights unchanged since 1914; reflect a time when there was a greater difference between classes. Voting rights unchanged since 1914; reflect a time when there was a greater difference between classes. Associates are an important part of the Society: Associates are an important part of the Society: 25-30% of Associates no longer take exams. 25-30% of Associates no longer take exams. Many Associates contribute extensively to the profession: as volunteers, on committees, as speakers and authors, etc. Many Associates contribute extensively to the profession: as volunteers, on committees, as speakers and authors, etc. Their contribution as practitioners is undeniable. Their contribution as practitioners is undeniable. Associates pay full dues, but cannot vote. Associates pay full dues, but cannot vote. Mutual Recognition issues. Mutual Recognition issues.

9. Task Force on ACAS Vote Right to vote should be granted upon earlier of: Fellowship or five years after Associateship. Right to vote should be unrestricted. Right to vote should be granted upon earlier of: Fellowship or five years after Associateship. Right to vote should be unrestricted. All voting members should be allowed to stand for election to the Board of Directors. All voting members should be allowed to stand for election to the Board of Directors. Voting Associates may hold all officer positions, with the exception of: Voting Associates may hold all officer positions, with the exception of: President / President Elect President / President Elect Vice President - Admissions Vice President - Admissions Committee membership is to remain restricted to Fellows for Discipline, Education Policy, Syllabus, Fellowship Exam Committees. Committee membership is to remain restricted to Fellows for Discipline, Education Policy, Syllabus, Fellowship Exam Committees.

10. Task Force on Classes of Membership Why are we considering this issue? In the U.S., two classes of membership looks like a distinction without a difference. In the U.S., two classes of membership looks like a distinction without a difference. AAA confers full rights on both classes. AAA confers full rights on both classes. Associate designation connotes lesser standing, even though the ACAS is fully qualified to sign statements of opinion. Associate designation connotes lesser standing, even though the ACAS is fully qualified to sign statements of opinion. Two designations for “fully qualified actuary” are confusing. Two designations for “fully qualified actuary” are confusing. Not considered qualified outside the U.S. Not considered qualified outside the U.S. Fails IAA “fully qualified actuary” criteria. Fails IAA “fully qualified actuary” criteria. Inadequate Finance, though other areas well beyond minimum. Inadequate Finance, though other areas well beyond minimum. Can create Mutual Recognition issues. Can create Mutual Recognition issues. Can complicate efforts to export our educational system. Can complicate efforts to export our educational system.

11. Task Force on Classes of Membership The Task Force recommended (May): Only one class of membership - Fellow. Only one class of membership - Fellow. Certificate of Achievement in Casualty Actuarial Science. Certificate of Achievement in Casualty Actuarial Science. All candidates under the Code of Professional Conduct. All candidates under the Code of Professional Conduct. ACAS continue to be awarded for a limited time. ACAS continue to be awarded for a limited time. Existing ACAS’s awarded FCAS after completing exams or after five additional years have passed. Existing ACAS’s awarded FCAS after completing exams or after five additional years have passed. Task Force was split on this issue. Task Force was split on this issue. Ideal number of exams for Fellowship is eight; necessary material can be reorganized to fit. Ideal number of exams for Fellowship is eight; necessary material can be reorganized to fit.

12. Task Force on Classes of Membership In May 2004, the Board discussed the various transition options in the Task Force Report. In May 2004, the Board discussed the various transition options in the Task Force Report. Options ranged from Options ranged from Immediately granting FCAS to ACAS and discontinuing ACAS Immediately granting FCAS to ACAS and discontinuing ACAS Completion of additional requirements Completion of additional requirements Discontinuing ACAS after a transition period and putting the ACAS into run-off. Discontinuing ACAS after a transition period and putting the ACAS into run-off. Under no circumstances would current Associates lose their status as members of the CAS. Under no circumstances would current Associates lose their status as members of the CAS.

13. Classes of Membership Follow-up Additional information was collected for the Board’s subsequent consideration during its September 2004 meeting. Additional information was collected for the Board’s subsequent consideration during its September 2004 meeting. Survey of the Membership Advisory Panel (MAP). Survey of the Membership Advisory Panel (MAP). Feedback from Regional Affiliate Presentations. Feedback from Regional Affiliate Presentations. Interviews with recruiters on the effects of one class of membership on attracting candidates. Interviews with recruiters on the effects of one class of membership on attracting candidates. Interviews with actuarial science professors. Interviews with actuarial science professors. Feedback submitted by members. Feedback submitted by members.

14. Classes of Membership Feedback Summary of additional feedback received: Summary of additional feedback received: Over two-thirds (70%) of the MAP agreed with TF recommendation of one class. Over two-thirds (70%) of the MAP agreed with TF recommendation of one class. More than three-fourths (77%) disagreed with the TF recommendation to grant all ACAS the FCAS designation without additional requirements. More than three-fourths (77%) disagreed with the TF recommendation to grant all ACAS the FCAS designation without additional requirements. Most of the feedback has indicated that one class of membership will not create a competitive disadvantage for students. Most of the feedback has indicated that one class of membership will not create a competitive disadvantage for students. Actuarial Science professors may disagree. Actuarial Science professors may disagree.

15. Board Findings on Classes of Membership Board Motions at September Board Meeting: That the Board instruct the Executive Council to establish a TF to propose within the next year a set of learning objectives by which FCAS can be attained: That the Board instruct the Executive Council to establish a TF to propose within the next year a set of learning objectives by which FCAS can be attained: with less material than the current exams, with less material than the current exams, with fewer than the current 9 exams, with fewer than the current 9 exams, while meeting the requirements of the IAA, while meeting the requirements of the IAA, while being consistent with the Centennial Goal. while being consistent with the Centennial Goal. It is the Board’s sense that this can be accomplished with eight exams (or seven exams with a workshop or seminar). It is the Board’s sense that this can be accomplished with eight exams (or seven exams with a workshop or seminar).

16. Board Findings on Classes of Membership Board Motions at September Board Meeting: Inform the CAS membership of the foregoing action, with an indication that the Board supports a move to an eventual single class of credentialed membership, with no more new Associates, concurrent with the movement to a shorter syllabus; and will seek membership reaction to this plan. (It is expected that the then-current Associates will either complete their remaining exams and become Fellows, or remain Associates until they cease their membership in the CAS.) Inform the CAS membership of the foregoing action, with an indication that the Board supports a move to an eventual single class of credentialed membership, with no more new Associates, concurrent with the movement to a shorter syllabus; and will seek membership reaction to this plan. (It is expected that the then-current Associates will either complete their remaining exams and become Fellows, or remain Associates until they cease their membership in the CAS.)

17. Membership Involvement Board is committed to obtaining member input. Board is committed to obtaining member input. Granting voting rights requires an amendment to the Constitution approved by Fellows, however, the Board agreed to postpone further action on the ACAS Vote, pending resolution of the Classes of Membership issue. Granting voting rights requires an amendment to the Constitution approved by Fellows, however, the Board agreed to postpone further action on the ACAS Vote, pending resolution of the Classes of Membership issue. Moving to one class of credentialed member may not require a change to the Constitution, but there will be a thorough exchange of ideas. Moving to one class of credentialed member may not require a change to the Constitution, but there will be a thorough exchange of ideas.

18. Thank You!