1. CIA Annual Meeting LOOKING BACK…focused on the future

2. CIA Annual Meeting Session 6612 Practice Certificates for AAs LOOKING BACK…focused on the future Current Proposal Current Proposal Feedback Feedback The way forward The way forward D. Allen Loney Current Proposal Current Proposal Feedback Feedback The way forward The way forward D. Allen Loney 1

3. CIA Annual Meeting Session 6612 Practice Certificates for AAs LOOKING BACK…focused on the future Report from AA Committee Circulated to profession on February 23 with letter from President Feedback sought by March 25 but extra time was allowed Report from AA Committee Circulated to profession on February 23 with letter from President Feedback sought by March 25 but extra time was allowed Current Proposal 2

4. CIA Annual Meeting Session 6612 Practice Certificates for AAs LOOKING BACK…focused on the future President Requested Feedback Feedback sought on all aspects of proposal Feedback sought on all aspects of proposal Specifically sought on : Specifically sought on : alternative ways of strengthening standards alternative ways of strengthening standards should practice certificates be required for other types of work should practice certificates be required for other types of work are the “appropriate practical experience” proposals too easy, too onerous, about right. are the “appropriate practical experience” proposals too easy, too onerous, about right. President Requested Feedback Feedback sought on all aspects of proposal Feedback sought on all aspects of proposal Specifically sought on : Specifically sought on : alternative ways of strengthening standards alternative ways of strengthening standards should practice certificates be required for other types of work should practice certificates be required for other types of work are the “appropriate practical experience” proposals too easy, too onerous, about right. are the “appropriate practical experience” proposals too easy, too onerous, about right. 3

5. CIA Annual Meeting Session 6612 Practice Certificates for AAs LOOKING BACK…focused on the future Feedback Received 36 Responses from a wide range of practitioners. Some were joint responses.36 Responses from a wide range of practitioners. Some were joint responses. All responses were acknowledgedAll responses were acknowledged Some in principle pro, some in principle opposedSome in principle pro, some in principle opposed Many suggested changes and improvementsMany suggested changes and improvements Feedback Received 36 Responses from a wide range of practitioners. Some were joint responses.36 Responses from a wide range of practitioners. Some were joint responses. All responses were acknowledgedAll responses were acknowledged Some in principle pro, some in principle opposedSome in principle pro, some in principle opposed Many suggested changes and improvementsMany suggested changes and improvements 4

6. CIA Annual Meeting Session 6612 Practice Certificates for AAs LOOKING BACK…focused on the future Feedback - Alternative ways of Strengthening Standards A moderate amount of feedback on this A moderate amount of feedback on this Mostly suggested strengthening Continuing Professional Development requirements Mostly suggested strengthening Continuing Professional Development requirements But there was little specific feedback on how that might be achieved But there was little specific feedback on how that might be achieved. Feedback - Alternative ways of Strengthening Standards A moderate amount of feedback on this A moderate amount of feedback on this Mostly suggested strengthening Continuing Professional Development requirements Mostly suggested strengthening Continuing Professional Development requirements But there was little specific feedback on how that might be achieved But there was little specific feedback on how that might be achieved. 5

7. CIA Annual Meeting Session 6612 Practice Certificates for AAs LOOKING BACK…focused on the future Feedback - Practice Certificates required for other types of Work Feedback mixed - a number thought should apply to all types of work, or all work requiring FCIA signatureFeedback mixed - a number thought should apply to all types of work, or all work requiring FCIA signature Others thought that it should not be expanded beyond AA work.Others thought that it should not be expanded beyond AA work. To be clear current proposal to Board from the AA Committee deals with AA work only and in no way suggests or anticipates the extension of Practice Certificates to other types of workTo be clear current proposal to Board from the AA Committee deals with AA work only and in no way suggests or anticipates the extension of Practice Certificates to other types of work Feedback - Practice Certificates required for other types of Work Feedback mixed - a number thought should apply to all types of work, or all work requiring FCIA signatureFeedback mixed - a number thought should apply to all types of work, or all work requiring FCIA signature Others thought that it should not be expanded beyond AA work.Others thought that it should not be expanded beyond AA work. To be clear current proposal to Board from the AA Committee deals with AA work only and in no way suggests or anticipates the extension of Practice Certificates to other types of workTo be clear current proposal to Board from the AA Committee deals with AA work only and in no way suggests or anticipates the extension of Practice Certificates to other types of work 6

8. CIA Annual Meeting Session 6612 Practice Certificates for AAs LOOKING BACK…focused on the future Feedback - “Appropriate Practical Experience” Reasonable amount of feedback. Reasonable amount of feedback. In general biased toward proposal being not strong enough, particularly re the timing of “appropriate experience” (3 years in last 10). Some feedback suggested 10 years was too long. We are considering changes to the recommendation in this regard. In general biased toward proposal being not strong enough, particularly re the timing of “appropriate experience” (3 years in last 10). Some feedback suggested 10 years was too long. We are considering changes to the recommendation in this regard. Clarification needed that Appendix A requirements apply to both Life & P&C Clarification needed that Appendix A requirements apply to both Life & P&C Some suggestions that pricing experience is not appropriate experience. Some suggestions that pricing experience is not appropriate experience. Some confusion re phrase “most of the following types of work” in Appendix. Some confusion re phrase “most of the following types of work” in Appendix. Feedback - “Appropriate Practical Experience” Reasonable amount of feedback. Reasonable amount of feedback. In general biased toward proposal being not strong enough, particularly re the timing of “appropriate experience” (3 years in last 10). Some feedback suggested 10 years was too long. We are considering changes to the recommendation in this regard. In general biased toward proposal being not strong enough, particularly re the timing of “appropriate experience” (3 years in last 10). Some feedback suggested 10 years was too long. We are considering changes to the recommendation in this regard. Clarification needed that Appendix A requirements apply to both Life & P&C Clarification needed that Appendix A requirements apply to both Life & P&C Some suggestions that pricing experience is not appropriate experience. Some suggestions that pricing experience is not appropriate experience. Some confusion re phrase “most of the following types of work” in Appendix. Some confusion re phrase “most of the following types of work” in Appendix. 7

9. CIA Annual Meeting Session 6612 Practice Certificates for AAs LOOKING BACK…focused on the future Other Feedback - Life/P&C Why is Workers Compensation not covered? Because it does not require AA certification. Why is Workers Compensation not covered? Because it does not require AA certification. Some P & C reserves use “Life techniques” (CALM) e.g. P & C companies that primarily write long term guaranteed products. Clarification needed as to whether Life or P&C certificate required. Some P & C reserves use “Life techniques” (CALM) e.g. P & C companies that primarily write long term guaranteed products. Clarification needed as to whether Life or P&C certificate required. It needs to be made clearer that appropriate P & C experience is required for a P&C certificate and appropriate Life experience for a Life certificate. It needs to be made clearer that appropriate P & C experience is required for a P&C certificate and appropriate Life experience for a Life certificate. Other Feedback - Life/P&C Why is Workers Compensation not covered? Because it does not require AA certification. Why is Workers Compensation not covered? Because it does not require AA certification. Some P & C reserves use “Life techniques” (CALM) e.g. P & C companies that primarily write long term guaranteed products. Clarification needed as to whether Life or P&C certificate required. Some P & C reserves use “Life techniques” (CALM) e.g. P & C companies that primarily write long term guaranteed products. Clarification needed as to whether Life or P&C certificate required. It needs to be made clearer that appropriate P & C experience is required for a P&C certificate and appropriate Life experience for a Life certificate. It needs to be made clearer that appropriate P & C experience is required for a P&C certificate and appropriate Life experience for a Life certificate. 8

10. CIA Annual Meeting Session 6612 Practice Certificates for AAs LOOKING BACK…focused on the future Other Feedback There was some feedback that Practice Certificates would not ensure that every AA was fully equipped to handle the job, or would execute the job in a fully competent way.There was some feedback that Practice Certificates would not ensure that every AA was fully equipped to handle the job, or would execute the job in a fully competent way. No measure can guarantee that, but this is a step in the right direction.No measure can guarantee that, but this is a step in the right direction. It sets threshold requirements. It should ensure that no one who is clearly unequipped to carry out AA duties takes on an AA job.It sets threshold requirements. It should ensure that no one who is clearly unequipped to carry out AA duties takes on an AA job. Rule 2 will still apply, but self assessment alone does not meet modern governance expectations.Rule 2 will still apply, but self assessment alone does not meet modern governance expectations. is up to date with respect to CPD has not been the subject of an adverse finding of a CIA disciplinary tribunal Other Feedback There was some feedback that Practice Certificates would not ensure that every AA was fully equipped to handle the job, or would execute the job in a fully competent way.There was some feedback that Practice Certificates would not ensure that every AA was fully equipped to handle the job, or would execute the job in a fully competent way. No measure can guarantee that, but this is a step in the right direction.No measure can guarantee that, but this is a step in the right direction. It sets threshold requirements. It should ensure that no one who is clearly unequipped to carry out AA duties takes on an AA job.It sets threshold requirements. It should ensure that no one who is clearly unequipped to carry out AA duties takes on an AA job. Rule 2 will still apply, but self assessment alone does not meet modern governance expectations.Rule 2 will still apply, but self assessment alone does not meet modern governance expectations. is up to date with respect to CPD has not been the subject of an adverse finding of a CIA disciplinary tribunal 9

11. CIA Annual Meeting Session 6612 Practice Certificates for AAs LOOKING BACK…focused on the future Other Feedback - Disciplinary Record Several respondents felt the sections relating to an Actuary’s past disciplinary record did not sit well with the duties of the Committee on Professional Conduct. Several respondents felt the sections relating to an Actuary’s past disciplinary record did not sit well with the duties of the Committee on Professional Conduct. There will likely be some changes to the recommendation in this regard. There will likely be some changes to the recommendation in this regard. Other Feedback - Disciplinary Record Several respondents felt the sections relating to an Actuary’s past disciplinary record did not sit well with the duties of the Committee on Professional Conduct. Several respondents felt the sections relating to an Actuary’s past disciplinary record did not sit well with the duties of the Committee on Professional Conduct. There will likely be some changes to the recommendation in this regard. There will likely be some changes to the recommendation in this regard. 10

12. CIA Annual Meeting Session 6612 Practice Certificates for AAs LOOKING BACK…focused on the future Other Feedback - Different Classes of Actuaries Some respondents suggested that Practice Certificates for AAs created different classes of actuaries. Some respondents suggested that Practice Certificates for AAs created different classes of actuaries. While we are all members of a single Canadian profession we perform many very different types of work. While we are all members of a single Canadian profession we perform many very different types of work. It hardly seems surprising that different requirements may be needed before embarking on certain types of work. It hardly seems surprising that different requirements may be needed before embarking on certain types of work. This is common in other professions e.g. auditing, healthcare, etc. This is common in other professions e.g. auditing, healthcare, etc. Other Feedback - Different Classes of Actuaries Some respondents suggested that Practice Certificates for AAs created different classes of actuaries. Some respondents suggested that Practice Certificates for AAs created different classes of actuaries. While we are all members of a single Canadian profession we perform many very different types of work. While we are all members of a single Canadian profession we perform many very different types of work. It hardly seems surprising that different requirements may be needed before embarking on certain types of work. It hardly seems surprising that different requirements may be needed before embarking on certain types of work. This is common in other professions e.g. auditing, healthcare, etc. This is common in other professions e.g. auditing, healthcare, etc. 11

13. CIA Annual Meeting Session 6612 Practice Certificates for AAs LOOKING BACK…focused on the future Feedback - Peer Review/Audit Some feedback suggested that there should be higher requirements for actuaries performing peer review. Some feedback suggested that there should be higher requirements for actuaries performing peer review. On reflection we did not feel this was practical On reflection we did not feel this was practical We are planning to extend the scope to cover “reviewing actuaries” who do work for audit firms under the expanded audit of actuarial liabilities which is anticipated soon. We are planning to extend the scope to cover “reviewing actuaries” who do work for audit firms under the expanded audit of actuarial liabilities which is anticipated soon. Feedback - Peer Review/Audit Some feedback suggested that there should be higher requirements for actuaries performing peer review. Some feedback suggested that there should be higher requirements for actuaries performing peer review. On reflection we did not feel this was practical On reflection we did not feel this was practical We are planning to extend the scope to cover “reviewing actuaries” who do work for audit firms under the expanded audit of actuarial liabilities which is anticipated soon. We are planning to extend the scope to cover “reviewing actuaries” who do work for audit firms under the expanded audit of actuarial liabilities which is anticipated soon. 12

14. CIA Annual Meeting Session 6612 Practice Certificates for AAs LOOKING BACK…focused on the future The Way Forward The recommendation is being redrafted to reflect feedback received so far. We are open to feedback at this meeting today and over the course of the next month as the redraft is prepared. AA Committee will be asked to send a redrafted recommendation to the Board for its September meeting 13

15. CIA Annual Meeting Session 6612 Practice Certificates for AAs LOOKING BACK…focused on the future The Way Forward - Cont’d. Subject to Board approval and members’ confirmation at the General Meeting in November, it is planned that Practice Certificates would be in effect for 2005 year- end. I expect there will be a session on Practice Certificates at the September AA Seminar in Montreal. 14