CAS UpdateWhere We’ve Been, Where We Are and Where We’re Going

Casualty Actuaries ofCasualty Actuaries of

Greater New YorkGreater New York

June 3, 2004June 3, 2004

Agenda CAS Centennial GoalCAS Centennial Goal

Two Important Task ForcesTwo Important Task Forces

Research Working PartiesResearch Working Parties

Educational ProcessEducational Process

Getting Involved in CASGetting Involved in CAS

CAS Web SiteCAS Web Site

Your inputYour input

CAS in 2014

The CAS will be 100 years old!The CAS will be 100 years old!

The Planning Horizon Core IdeologyCore Ideology

Core purpose Core purpose A concise statement of the organization’s reason for A concise statement of the organization’s reason for

beingbeing Core values Core values

Essential and enduring tenets of the organization Essential and enduring tenets of the organization 10-30 Years: Envisioned Future10-30 Years: Envisioned Future

Big audacious goalBig audacious goal 5-10 Years: Critical Factors5-10 Years: Critical Factors 3-5 Years: Strategic Planning3-5 Years: Strategic Planning 1-2 Years: Action Planning1-2 Years: Action Planning

Centennial Goal (March ‘03)

The CAS will be The CAS will be globallyglobally recognized as the recognized as the preeminent resource in educating casualty preeminent resource in educating casualty actuaries and conducting research in casualty actuaries and conducting research in casualty actuarial science. CAS members will be actuarial science. CAS members will be recognized as the leading experts in the recognized as the leading experts in the evaluation of hazard risk and the evaluation of hazard risk and the integrationintegration of hazard risk with strategic, financial and of hazard risk with strategic, financial and operational risk.operational risk.

International Issues Historically, CAS predominantly North AmericanHistorically, CAS predominantly North American

95% of members live and practice in North America95% of members live and practice in North America Many papers and syllabus materials use U.S. examplesMany papers and syllabus materials use U.S. examples Major meetings and seminarsMajor meetings and seminars

““Preeminent global resource”Preeminent global resource” Support of CAS Members working abroadSupport of CAS Members working abroad Support basic education process in various countriesSupport basic education process in various countries Exam waivers and mutual recognitionExam waivers and mutual recognition Practice rights for CAS members (Ireland, Australia, Practice rights for CAS members (Ireland, Australia,

India)India) Participation in international actuarial communityParticipation in international actuarial community

Risk Integration

Aspects of risk addressed by a multitude of professionsAspects of risk addressed by a multitude of professions Financial, Operational, Hazard , StrategicFinancial, Operational, Hazard , Strategic

Actuaries can be uniquely positioned to integrate the risksActuaries can be uniquely positioned to integrate the risks Tools in our Education ProcessTools in our Education Process ProfessionalismProfessionalism

Coordinating activities with the SOACoordinating activities with the SOA Joint ERM Seminar summer ’03 (CAS led)Joint ERM Seminar summer ’03 (CAS led) ERM and RCMS merge in ’04 under CAS leadershipERM and RCMS merge in ’04 under CAS leadership In conjunction in ’04 with GA State Bowles Research In conjunction in ’04 with GA State Bowles Research

SymposiumSymposium

Implementing the Centennial Goal

Traditionally Vice Presidents and Committee Chairs Traditionally Vice Presidents and Committee Chairs have annual goalshave annual goals To do listTo do list Only occasionally connected to long range plans Only occasionally connected to long range plans

LRPC working with other CAS leaders to change our LRPC working with other CAS leaders to change our short- and medium-term planning processesshort- and medium-term planning processes Does my goal support the Centennial Goal?Does my goal support the Centennial Goal? What does my committee need to be doing in the next What does my committee need to be doing in the next

three years to support the Goal?three years to support the Goal?

CAS Board

This is where policy is madeThis is where policy is made Board meets 4 times per yearBoard meets 4 times per year

May and November at the CAS meetingsMay and November at the CAS meetings March and SeptemberMarch and September

Board meetings are open to the membership!Board meetings are open to the membership! Come and see how decisions are made in the CASCome and see how decisions are made in the CAS Next Board Meeting – Sept. 9-10, Niagara FallsNext Board Meeting – Sept. 9-10, Niagara Falls

Two Important Task Forces

Classes of membershipClasses 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?

What governance rights should ACAS’s have in the What governance rights should ACAS’s have in the CAS?CAS? Vote? All ACAS’s? After N Years?Vote? All ACAS’s? After N Years? Chair committees? Which ones?Chair committees? Which ones? Serve as a VP?Serve as a VP? Serve on the Board?Serve on the Board?

Historical Perspective on Associates

Since inception, two classes of membershipSince inception, two classes of membership Associate/Fellow designations have changed over the Associate/Fellow designations have changed over the

yearsyears Initially, company responsibilitiesInitially, company responsibilities Beginning in 1915, examsBeginning in 1915, exams

Number and content of exams has changedNumber and content of exams has changed Two exam differential today is lowest everTwo exam differential today is lowest ever

For 70%, designation of Associate is temporary; the For 70%, designation of Associate is temporary; the remaining 30% will not complete the Fellowship remaining 30% will not complete the Fellowship exams and are/will be career Associatesexams and are/will be career Associates

Task Force on ACAS Governance Rights

Right to voteRight to vote should be given to members upon attainment of should be given to members upon attainment of Fellowship or five years after they are recognized as Associates, Fellowship or five years after they are recognized as Associates, whichever comes first. Right to vote should be unrestricted.whichever comes first. Right to vote should be unrestricted.

All voting members should be allowed to stand for the All voting members should be allowed to stand for the Board of Board of DirectorsDirectors

Voting Associates may hold all Voting Associates may hold all officer positionsofficer positions, with the , with the exception of:exception of: President / President ElectPresident / President Elect Vice President - Admissions Vice President - Admissions

Committee Membership is to remain restricted to Fellows for:Committee Membership is to remain restricted to Fellows for: DisciplineDiscipline Education PolicyEducation Policy SyllabusSyllabus

Classes of Membership Task Force

Task Force recommendations include:Task Force recommendations include: One and only one class of membership - FellowshipOne and only one class of membership - Fellowship Certificate of Achievement in Casualty Actuarial Science Certificate of Achievement in Casualty Actuarial Science Bring all candidates under the Code of Professional ConductBring all candidates under the Code of Professional Conduct Transitional IssuesTransitional Issues

Current AssociatesCurrent Associates• Automatic Transition (Preferred)Automatic Transition (Preferred)• Completion of some Additional Requirement(s)Completion of some Additional Requirement(s)

Students on the Road to ACASStudents on the Road to ACAS• Continue to offer Associate designation until 2008Continue to offer Associate designation until 2008

Retain common set of examinations (ideally 8 exams total)Retain common set of examinations (ideally 8 exams total) Action expected at September Board meetingAction expected at September Board meeting

Research Working Parties

Traditional CAS ApproachTraditional CAS Approach Focused on individual researchFocused on individual research Call paper programsCall paper programs

No interaction among researchersNo interaction among researchers

Working Parties Working Parties Focused topicFocused topic Collaborative, interactive processCollaborative, interactive process Short (1 year) time frame with report at next meetingShort (1 year) time frame with report at next meeting First parties formed at CLRS ‘03First parties formed at CLRS ‘03

Changes to Preliminary Education

CurrentCurrent Prerequisites: Linear Algebra and Statistics Prerequisites: Linear Algebra and Statistics Exam 1: Calculus and Probability (4 hours)Exam 1: Calculus and Probability (4 hours) Exam 2: Interest Theory, Economics, Finance (4 hours)Exam 2: Interest Theory, Economics, Finance (4 hours) Exam 3: Actuarial Models– NOT JOINT (4 hours)Exam 3: Actuarial Models– NOT JOINT (4 hours) Exam 4: Actuarial Modeling (including Applied Stats) (4 hours)Exam 4: Actuarial Modeling (including Applied Stats) (4 hours)

Changes to Preliminary Education

Approved March 2004 Board MeetingApproved March 2004 Board Meeting Starting Spring 2005Starting Spring 2005

Prerequisites: Linear Algebra and CalculusPrerequisites: Linear Algebra and Calculus Exam 1: Probability (with Supporting Calculus) (3 hours)Exam 1: Probability (with Supporting Calculus) (3 hours) Exam 2: Interest Theory (2 hours)Exam 2: Interest Theory (2 hours) Exam 3: Actuarial Models & Statistics – NOT JOINT (4 hours)Exam 3: Actuarial Models & Statistics – NOT JOINT (4 hours) Exam 4: Actuarial Modeling (4 hours)Exam 4: Actuarial Modeling (4 hours) Validation by Educational Experience: Economics, Finance, Validation by Educational Experience: Economics, Finance,

Applied Statistics Applied Statistics

Validation by Educational Experience

Option 1: Submit a grade of B- or better on approved coursesOption 1: Submit a grade of B- or better on approved courses Micro and Macro EconomicsMicro and Macro Economics Intermediate Corporate FinanceIntermediate Corporate Finance Regression and Time Series (could be separate courses)Regression and Time Series (could be separate courses)

Option 2: Pass an appropriate exam, such as the AP exams for Option 2: Pass an appropriate exam, such as the AP exams for Economics, CFA exams, etc. Economics, CFA exams, etc.

Option 3: Pass exams offered by the CAS. CAS is committed Option 3: Pass exams offered by the CAS. CAS is committed to offering these for at least 2 yearsto offering these for at least 2 years

Option 4: Other experiencesOption 4: Other experiences College distance-learning coursesCollege distance-learning courses Courses/seminars designed specifically for VEE creditCourses/seminars designed specifically for VEE credit

Transition

2000 Syllabus2000 Syllabus Exam 1 Exam 1 Exam 1 Exam 1 Exam 2 Exam 2 Exam 2 + VEE for Economics & Finance Exam 2 + VEE for Economics & Finance Exam 3 Exam 3 Exam 3 Exam 3 Exam 4 Exam 4 Exam 4 + VEE for Applied Stats Exam 4 + VEE for Applied Stats

Pre-2000 SyllabusPre-2000 Syllabus Part 3A Part 3A VEE for Applied Stats VEE for Applied Stats Part 4A Part 4A Exam 2 Exam 2 Part 4B Part 4B Exam 4 Exam 4 Part 5A Part 5A VEE for Economics VEE for Economics Part 5B Part 5B VEE for Finance VEE for Finance

Why VEE?

Most candidates take Economics and/or Finance Most candidates take Economics and/or Finance No need to examine topics that require background but No need to examine topics that require background but

not masterynot mastery But verification is needed to meet international But verification is needed to meet international

standardsstandards Exam questions for Applied Stats stress memorization Exam questions for Applied Stats stress memorization

rather than applicationrather than application Our candidates need to learn how to appropriately Our candidates need to learn how to appropriately

apply regression and time series models to real dataapply regression and time series models to real data This competency cannot easily be validated in a timed This competency cannot easily be validated in a timed

paper-and-pencil exam paper-and-pencil exam

Impact on Travel Time

Actuarial Science majors often graduate with two or Actuarial Science majors often graduate with two or more examsmore exams Unlikely to have much effect on these candidatesUnlikely to have much effect on these candidates

Other majors who take VEE courses in school benefitOther majors who take VEE courses in school benefit Candidates who did not have VEE courses in schoolCandidates who did not have VEE courses in school

Can tackle VEE while studying for interest examCan tackle VEE while studying for interest exam Or between exam “seasons”Or between exam “seasons” VEE pass rates on first attempt should be very highVEE pass rates on first attempt should be very high

Increases predictability of travel timeIncreases predictability of travel time

Other Ways to Reduce Travel Time

Computer Based TestingComputer Based Testing Targeting 2005 pilot for Exam 1Targeting 2005 pilot for Exam 1 Expand to 4-6 computer-based administrations in 2006Expand to 4-6 computer-based administrations in 2006 Candidates will receive results immediately Candidates will receive results immediately

(beginning in 2006)(beginning in 2006) Will expand to other exams if successfulWill expand to other exams if successful

Approved May 2004 Board Meeting. Awaiting Approved May 2004 Board Meeting. Awaiting approval by SOA.approval by SOA.

Other Ways to Reduce Travel Time

More Efficient Study MaterialMore Efficient Study Material Too much material not written for study purposesToo much material not written for study purposes Institute of Actuaries (UK) hired one vendor to produce Institute of Actuaries (UK) hired one vendor to produce

all study materialall study material Material written specifically for study purposesMaterial written specifically for study purposes Enabled increased pass rates despite expanded syllabus Enabled increased pass rates despite expanded syllabus

breadthbreadth CAS Task Force determined that this could work for usCAS Task Force determined that this could work for us Syllabus Committee charged to try this on a pilot basisSyllabus Committee charged to try this on a pilot basis

Modeling Workshop

Education in Risk Integration Techniques is consistent Education in Risk Integration Techniques is consistent with Centennial Goalwith Centennial Goal DFA added to Syllabus in 2000DFA added to Syllabus in 2000 DFA taken off Part 8 in 2003 due to inability to test in a DFA taken off Part 8 in 2003 due to inability to test in a

paper-and-pencil environmentpaper-and-pencil environment Modeling Workshop Task Force establishedModeling Workshop Task Force established

Pilot a hands-on workshop experience in late 2004Pilot a hands-on workshop experience in late 2004 Consider adding this as a future FCAS requirement Consider adding this as a future FCAS requirement

and/or continuing education opportunityand/or continuing education opportunity

Getting Involved in CAS

Why:Why: LearnLearn Make useful contactsMake useful contacts Contribute to your professionContribute to your profession

How:How: Pick committees/topic(s) that interest you mostPick committees/topic(s) that interest you most Respond to Participation Survey or contact committee chair Respond to Participation Survey or contact committee chair

directlydirectly Join a working partyJoin a working party Write papersWrite papers Give presentationsGive presentations Regional Affiliate involvementRegional Affiliate involvement

CAS Web Site (www.casact.org)

Syllabus, study materials, past exams, study notesSyllabus, study materials, past exams, study notes All PCAS (1914), CAS Forums (1987) and All PCAS (1914), CAS Forums (1987) and

Discussion paper programs (1979), ASTIN JournalsDiscussion paper programs (1979), ASTIN Journals ASOPs, Casualty Reserve Practice NoteASOPs, Casualty Reserve Practice Note Discussion forumDiscussion forum Member Services:Member Services:

Membership DirectoryMembership Directory CAS Board Q&ACAS Board Q&A Board minutesBoard minutes

We welcome your input regarding . . .

Centennial GoalCentennial Goal CAS role internationallyCAS role internationally CAS role outside traditional p/c insuranceCAS role outside traditional p/c insurance Exams and Education ProcessExams and Education Process Travel timeTravel time MembershipMembership Research working partiesResearch working parties What’s on your mind?What’s on your mind? Questions?Questions?

THANK YOU !!!!!