2008 Revised Qualification Standards

Southwest Actuarial Forum

Catherine Taylor, FCAS, MAAA

June 2008

Background

Code of Professional Conduct requires members of the American Academy of Actuaries (AAA) to Adhere to high standards of the actuarial

profession in conduct and practice

Perform professional services only when qualified to do so, and

Meet applicable qualification standards.

Let’s Talk about the Code of Conduct 14 Precepts which “identify the professional

and ethical standards with which we must comply to fulfill our responsibility to the public and the actuarial profession.”

Applies to all members of CAS, SOA, CCA, & ASPPA whether or not a member of AAA.

Pop Quiz!

Name one of the Precepts?

Also Applies to CAS Students CAS Code of Professional Ethics for Candidates

Code of Conduct modified for non-members

Also covers Exam Discipline

Application signature acknowledges adherence

Effective with 2008 exams

This is sooo last year, … Actuaries were required to meet the

Qualification Standards if they were issuing Prescribed Statements of Actuarial Opinion (PSAO).

PSAO is a statement of actuarial opinion or communication which is issued about

Laws & Regulations

Actuarial Requirements

Accounting Requirements

Qualification Standards

To issue a PSAO, an actuary had to meet General Qualification Standards, including

Basic education (exams or alternative)

Experience (sufficiently experienced to apply proper techniques)

Continuing education

For Basic Education & Experience, Ultimately…

Can you look in the mirror and say you are

qualified?

Continuing Education Requirements Obtain sufficient continuing education to

maintain current knowledge in the applicable practice area.

Casualty Life

Pension

Health

Previous Requirements

Annual average of 12 credit hours in each two consecutive calendar years.

At least 50% of the hours in “Organized Activities”

Remaining hours in “Other Activities”

Up to 25% from professionalism topics.

Organized Activities

Meetings of local or national actuarial organizations

Other meetings, seminars, & programs with actuarial content

Teleconferences or electronic conferences

Time spent taking exams successfully

Listening to tapes if accompanied by live presentations or discussion leaders

Other Activities Independent study

Listening to tapes of seminars

If content is relevant Committee participation (including in-

house committees)

Studying for actuarial exams

Writing papers

Preparing presentations

Correspondence course

Here’s What’s New!

Broadened definition of what constitutes a Statement of Actuarial Opinion

Basic Education Requirement & Experience essentially unchanged, but more specific

Significant increase in CE hour requirement

Broadened definition of what qualifies for CE

Statements of Actuarial Opinion

“Opinion expressed by the actuary in the course of performing

actuarial services and intended to be relied upon by the person or

organization to which the opinion is addressed.”

What are Professional Actuarial Services?

Client or

Employerrelying on

Findings Recommendations

Ad

viceO

pinio

ns

In Other Words…

Pretty much everything we do!

SAOs can be… Internal company communication if

contains actuarial content intended to be relied upon

Usually written, but could be oral

May or may not be a public document

Not everything an actuary communicates is an SAO - must have actuarial content!

Examples of SAO

SAO Reserve opinions Rate filing Expert testimony Ratemaking

opinion Pricing opinion Management

reports on actuarial topics

May Contain SAO Slide presentation Speech Phone conversation Data call certification Congressional

testimony

New Basic Education & Experience Member of AAA, CAS, SOA, CCA, ASPPA or

other IAA-member organization

3 years responsible actuarial experience Work requiring knowledge and skill in solving

actuarial problems

Knowledge of law on SAO defined in Code of Professional Conduct

New Continuing Ed Requirement At least 30 hours each year of relevant

continuing education (24 hours in 2008)

At least 6 of the 30 hours must be Organized Activities

At least 3 of the 30 hours must be on professionalism topics

Hours met in the year preceding the SAO

What Is Relevant?

Does it broaden understanding of the work an actuary does?

Does it expand knowledge of related disciplines that bear on an actuary’s work?

Does it facilitate entry into a new practice area?

It can also be business skills. (3 hour cap)

What are General Business & Professionalism Topics?

Business Skills

Client Relationship Presentation Communication Project Management Personnel

Management

Professionalism Studying, reviewing, or

providing input on Exposure Draft ASOP Code of Professional Conduct

Serving on ASB Professionalism Committee

Ethics Training

What Counts as Organized Activities? Interaction with other actuaries working for

different organizations Conferences Seminars Webcasts In-person or on-line course Committee work

In-house meetings only count if there is an outside speaker.

What Counts as Other Activities? Reading actuarial literature or other material

on relevant technical or professional topics Writing papers Listening to tapes of seminars Relevant in–house meetings Studying for actuarial exams Drafting actuarial exams Preparing for or speaking at a CE activity

Again with the mirror…

You must be able to look yourself in the mirror and say

this qualifies!

What Else?

50 minutes is a CE hour and fractional portions earned at a rate of 60/50 (1.2). i.e. 90 minutes is 1.8 hours not 1.5 hours

Hours can be carried over 1 year For 2008, hours above 24 in 2006 & 2007

For new members, hours spent studying count for CE in the next year.

How Do I Let Others Know I Am Qualified?

SAOs need to include an acknowledgement of qualification.

Company actuaries should be notifying their management about their qualification.

Should be done annually.

How Do I Keep Track of Everything? Records are required to be maintained

Must be kept for 6 years

At a minimum include Date of the CE Credit hours obtained Brief description of the subject matter

Possible SpreadsheetName

Record of Continuing Education

2008

Activity

          Credit

Sponsor Date(s) Event Subject Matter Type Hours

           

           

           

Total Organized Activities Credit Hours      

 0

Total Other Activities Credit Hours      

 0

Total CE Credit Hours         0

POP QUIZ!

#1

Does this session count for CE and if so, which category and how

much?

Organized Activities

& Professionalism

1 hour

#2

EMB America and Pinnacle periodically put on1 hour webinars.

Do they count for CE and if so, which category and how much?

Organized Activities

1.2 hours

#3

Would a 50 minute internal meeting summarizing information your boss

learned at an external class on communication skills count for CE and if so, which category and how much?

Other Activities & General BusinessI hour

#4

Would a 50 minute session on ERM with the AVP, Enterprise

Risk Management at your company count for CE and if so which category and how much?

Other Activities 1 hour

#5

Would a 1.5 hour Advanced Training session at your company with IIHS’s

Kim Hazelbaker count for CE and if so which category and how much?

Organized Activities

I.8 hours

Where Is All of This Information? AAA website www.actuary.org

Click on Code of Conduct on the left

CAS Website www.casact.org Click on Standards & Guidelines on the left

I urge you to read these carefully!

Questions?