current cas issues and directions allan kaufman casualty actuaries of europe london 20 october 2006

Current CAS Issues Current CAS Issues and Directions and Directions

Allan KaufmanCasualty Actuaries of Europe

London 20 October 2006

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AgendaAgenda Results of 2006 Elections – Ballot InitiativesResults of 2006 Elections – Ballot Initiatives

Basic Education IssuesBasic Education Issues

CAS Centennial Goal / ERM InitiativesCAS Centennial Goal / ERM Initiatives

Actuarial CredibilityActuarial Credibility

CAS Publications and ResearchCAS Publications and Research

Image of the Actuary CampaignImage of the Actuary Campaign

2006-07 Calendar of Events2006-07 Calendar of Events

Your InputYour Input

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Results of 2006 Results of 2006 Elections – Ballot Elections – Ballot

InitiativesInitiativesFellows approved the proposed governance Fellows approved the proposed governance

initiatives:initiatives: Appointed (Non-Actuary) Board MembersAppointed (Non-Actuary) Board Members

Create a class of Board Members Create a class of Board Members consisting of up to three additional Board consisting of up to three additional Board Members to be appointed by the Board.Members to be appointed by the Board.

Executive Director as Member of Executive Director as Member of Executive CouncilExecutive CouncilThe Executive Director should be The Executive Director should be officially designated as a member of the officially designated as a member of the Executive Council.Executive Council.

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Results of 2006 Results of 2006 Elections – Ballot Elections – Ballot

InitiativesInitiatives

Right to voteRight to vote should be granted upon earlier should be granted upon earlier of: Fellowship or five years after admission as of: Fellowship or five years after admission as a member.a member.

All voting members should be allowed to stand All voting members should be allowed to stand for election to the for election to the Board of DirectorsBoard of Directors..

Voting Associates may hold all Voting Associates may hold all officer officer positionspositions, with the exception of:, with the exception of:

PresidentPresident President - ElectPresident - Elect Vice President - AdmissionsVice President - Admissions

Proposals related to the rights of Associates Proposals related to the rights of Associates were not approved:were not approved:

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FCAS Education IssuesFCAS Education Issues

Task force established in late 2004 Task force established in late 2004 to recommend “Learning Objectives” to recommend “Learning Objectives” for what it means to be an FCAS.for what it means to be an FCAS.

ConsiderationsConsiderations Perhaps reducing total number of Perhaps reducing total number of

exams by one (i.e., 8 exams plus VEE).exams by one (i.e., 8 exams plus VEE). Including a mandatory workshop (e.g., Including a mandatory workshop (e.g.,

DFA Modeling Workshop).DFA Modeling Workshop). Recommendations delivered to CAS Recommendations delivered to CAS

Board in November 2005.Board in November 2005.

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FCAS Education IssuesFCAS Education Issues

Board Task Force on FCAS Education formed Board Task Force on FCAS Education formed in late 2005 to consider policy-level issues.in late 2005 to consider policy-level issues.

TF report was focus of Jan 2006 Board TF report was focus of Jan 2006 Board meeting, during which four resolutions were meeting, during which four resolutions were passed:passed: Prepare a White Paper.Prepare a White Paper. Board endorses use of electives in basic Board endorses use of electives in basic

education.education. Electives to be available post-Fellowship for CE.Electives to be available post-Fellowship for CE. Mastery of core topics must be demonstrated by Mastery of core topics must be demonstrated by

all candidates through rigorous methods.all candidates through rigorous methods. White Paper to be exposed in late 2006.White Paper to be exposed in late 2006.

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CBT Implementation CBT Implementation for Exam 2for Exam 2

September 2005 – First CBT offering of Exam 1September 2005 – First CBT offering of Exam 1(paper/pencil backup for areas without (paper/pencil backup for areas without centers).centers).

August 2006 – 98% of candidates take Exam 1 August 2006 – 98% of candidates take Exam 1 on a computer.on a computer.

2006 – Exam 1 offered four times.2006 – Exam 1 offered four times. Exam 2 is the logical choice to move to CBT.Exam 2 is the logical choice to move to CBT. May 2008 (proposed) – First CBT offering of May 2008 (proposed) – First CBT offering of

Exam 2.Exam 2. 2009 (proposed) – Offer Exam 2 four times via 2009 (proposed) – Offer Exam 2 four times via

CBT.CBT.

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CAS Centennial GoalCAS Centennial Goal

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

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CAS Centennial GoalCAS Centennial Goal SSignificant, ignificant, AAttainable, ttainable, MMeasurable Goalseasurable Goals

Interim milestones to help gauge progress Interim milestones to help gauge progress towards the Centennial Goal.towards the Centennial Goal.

2006 LRPC Goal: Critically review the SAM Goals.2006 LRPC Goal: Critically review the SAM Goals. Environmental Scans – Threats:Environmental Scans – Threats:

Competition for Risk Integration & ERM ServicesCompetition for Risk Integration & ERM Services Marketing Actuarial SkillsMarketing Actuarial Skills VolunteerismVolunteerism InternationalismInternationalism Quantification SkillsQuantification Skills Reputation of the Actuarial ProfessionReputation of the Actuarial Profession

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ERM InitiativesERM Initiatives

During 2005, the CAS Board took actions to During 2005, the CAS Board took actions to help the actuarial profession benefit from help the actuarial profession benefit from new opportunities in Enterprise Risk new opportunities in Enterprise Risk Management:Management: Approved CAS/SOA Risk Management Section.Approved CAS/SOA Risk Management Section. Launched partnership with Enterprise Risk Launched partnership with Enterprise Risk

Management Institute International, Ltd. Management Institute International, Ltd. (ERMII). (ERMII).

Created new Vice President of Risk Integration Created new Vice President of Risk Integration and ERM position to oversee ERM-related and ERM position to oversee ERM-related activities.activities.

Formed ERM Task Force to examine the CAS.Formed ERM Task Force to examine the CAS.

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Risk Management SectionRisk Management Section Similar to the existing CAS special Similar to the existing CAS special

interest sections CARe and AIR.interest sections CARe and AIR. Both CAS and SOA members are eligible Both CAS and SOA members are eligible

to serve on the Council that guides the to serve on the Council that guides the activities of the Section.activities of the Section.

Members are encouraged to join the Members are encouraged to join the Section. Annual dues are only $20.Section. Annual dues are only $20.

Learn more on the CAS Web Site Learn more on the CAS Web Site CAS CAS Special Interest Sections.Special Interest Sections.

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ERMII is a private, not-for-profit, ERMII is a private, not-for-profit, independent educational and research independent educational and research organization led by CAS Fellow Shaun organization led by CAS Fellow Shaun Wang.Wang.

ERMII is co-sponsored by an international ERMII is co-sponsored by an international group of universities and professional group of universities and professional organizations including Georgia State organizations including Georgia State University, University of New South University, University of New South Wales, University of Illinois, Wuhan Wales, University of Illinois, Wuhan University (China), and the CAS.University (China), and the CAS.

VP-Risk Integration and ERM to oversee VP-Risk Integration and ERM to oversee and coordinate ERM-related activities. and coordinate ERM-related activities.

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CAS ERM Task ForceCAS ERM Task Force Goal: Spotlight the CAS itself as an Goal: Spotlight the CAS itself as an

example of ERM best practices.example of ERM best practices. Charge: Implement an ERM process for Charge: Implement an ERM process for

the CAS, report on the outcome of this the CAS, report on the outcome of this effort by the September 2006 Board effort by the September 2006 Board meeting, and prepare an article, meeting, and prepare an article, authored by the Executive Director and authored by the Executive Director and the President, for placement in a the President, for placement in a magazine such as magazine such as Associations Now!Associations Now!

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Task Force on Task Force on Actuarial CredibilityActuarial Credibility

Established to identify, prioritize, Established to identify, prioritize, and investigate the feasibility of and investigate the feasibility of possible strategies for enhancing the possible strategies for enhancing the perceived credibility of the actuarial perceived credibility of the actuarial profession and to develop action profession and to develop action plans for implementation of those plans for implementation of those strategies considered to have the strategies considered to have the greatest potential for high impact.greatest potential for high impact.

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1.1. Enhance the transparency of the Enhance the transparency of the actuary’s conclusions by clearly actuary’s conclusions by clearly identifying differences between identifying differences between management’s “best estimate” and the management’s “best estimate” and the actuary’s “best estimate.”actuary’s “best estimate.”

2.2. Enhance the public’s understanding of Enhance the public’s understanding of actuarial estimates.actuarial estimates.

3.3. Improve the transparency of disclosures Improve the transparency of disclosures by requiring that the actuarial report by requiring that the actuarial report contain an exhibit that summarizes contain an exhibit that summarizes changes in the actuary’s estimates from changes in the actuary’s estimates from one period to the next.one period to the next.

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4.4. Enhance the quality of corporate governance Enhance the quality of corporate governance by educating audit committees or board of by educating audit committees or board of directors or both on the roles and directors or both on the roles and responsibilities of the appointed actuary.responsibilities of the appointed actuary.

5.5. Enhance the self-governance of the profession Enhance the self-governance of the profession by requiring the appointed actuary to provide by requiring the appointed actuary to provide an explanatory document with the ABCD an explanatory document with the ABCD whenever the change in the actuary’s reserve whenever the change in the actuary’s reserve estimates over a defined period exceeds estimates over a defined period exceeds certain predetermined thresholds..certain predetermined thresholds..

6.6. Elevate the unique role of the appointed Elevate the unique role of the appointed actuary within the statutory financial reporting actuary within the statutory financial reporting environment by incorporating an Actuarial environment by incorporating an Actuarial Statement within the Jurat Page of each Statement within the Jurat Page of each company’s Annual Statement.company’s Annual Statement.

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Task Force Report presented to the Task Force Report presented to the CAS Board in May 2005. Board CAS Board in May 2005. Board accepted the Report and directed the accepted the Report and directed the EC to implement recommendations as EC to implement recommendations as appropriate.appropriate.

Two additional Task Forces formed:Two additional Task Forces formed: Joint Task Force for Enhancing the Joint Task Force for Enhancing the

Reputation of Casualty ActuariesReputation of Casualty Actuaries CAS Task Force for Enhancing the CAS Task Force for Enhancing the

Reputation of Casualty ActuariesReputation of Casualty Actuaries

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CRUSAPCRUSAP

Critical Review of the U.S. Actuarial Profession Critical Review of the U.S. Actuarial Profession (CRUSAP) Task Force formed by the AAA(CRUSAP) Task Force formed by the AAA..

CRUSAP will identify and analyze risks and CRUSAP will identify and analyze risks and opportunities facing the actuarial profession opportunities facing the actuarial profession and provide recommendations for meeting and provide recommendations for meeting emerging challenges. emerging challenges.

30 members serve on the CRUSAP advisory 30 members serve on the CRUSAP advisory panel.panel.

Fred Kilbourne is chairperson of the CRUSAP Fred Kilbourne is chairperson of the CRUSAP Task Force. Task Force.

See See www.crusap.netwww.crusap.net for more information. for more information.

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Task Force on Task Force on PublicationsPublications

RecommendationsRecommendations1.1. Remove papers from PCAS. Keep Remove papers from PCAS. Keep

CAS-specific content and add CAS-specific content and add Yearbook content.Yearbook content.

2.2. Create a yearly Membership Create a yearly Membership Directory publication as a separate Directory publication as a separate soft-cover publication.soft-cover publication.

3.3. Create a new journal where refereed Create a new journal where refereed papers will be published. The editor papers will be published. The editor is Gary Dean.is Gary Dean.

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New CAS JournalNew CAS Journal

The Board approved the name and The Board approved the name and tagline for tagline for

the new Journal:the new Journal:

Variance: Advancing the Variance: Advancing the Science of RiskScience of Risk

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Research Working Research Working PartiesParties

Research task forces.Research task forces. Process should result in quality Process should result in quality

work products.work products. Brings together the research Brings together the research

energy of individual researchers.energy of individual researchers. Proven to be effective for GIRO, Proven to be effective for GIRO,

the general insurance research the general insurance research organization of the Faculty and organization of the Faculty and Institute of Actuaries (UK).Institute of Actuaries (UK).

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Research Working Research Working PartiesParties

2004-062004-06 Dynamic Risk Modeling Handbook Dynamic Risk Modeling Handbook Public-Access DFA Model Public-Access DFA Model Bornhuetter-Ferguson - Initial Bornhuetter-Ferguson - Initial

Expected LossesExpected Losses Tail FactorsTail Factors Risk Transfer TestingRisk Transfer Testing Data Management and Information Data Management and Information

Educational Materials Educational Materials Loss Simulation ModelLoss Simulation Model

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Image of the Actuary Image of the Actuary CampaignCampaign

Profession-wide campaign.Profession-wide campaign. Image Advisory Group, made up of members Image Advisory Group, made up of members

from each of the North American actuarial from each of the North American actuarial organizations, oversees campaign.organizations, oversees campaign.

www.imageoftheactuary.orgwww.imageoftheactuary.org// for more for more information.information.

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2006-07 Calendar of 2006-07 Calendar of EventsEvents

Seminar on Predictive ModelingSeminar on Predictive ModelingOctober 4-5, 2006, BostonOctober 4-5, 2006, Boston

Annual MeetingAnnual MeetingNovember 12-15, 2006, San FranciscoNovember 12-15, 2006, San Francisco

Ratemaking SeminarRatemaking SeminarMarch 8-9, 2007, AtlantaMarch 8-9, 2007, Atlanta

ERM SymposiumERM SymposiumMarch 28-30, 2007, ChicagoMarch 28-30, 2007, Chicago

Seminar on ReinsuranceSeminar on ReinsuranceMay 7-8, 2007, PhiladelphiaMay 7-8, 2007, Philadelphia

Spring MeetingSpring MeetingJune 17-20, 2007, OrlandoJune 17-20, 2007, Orlando

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ASTIN 2007ASTIN 2007

CAS is host of the 2007 ASTIN Colloquium - CAS is host of the 2007 ASTIN Colloquium - ASTIN’s 50ASTIN’s 50thth Anniversary! Anniversary!

Immediately follows the 2007 CAS Spring Immediately follows the 2007 CAS Spring Meeting, with a joint day of sessions.Meeting, with a joint day of sessions.

http://www.actuaries.org/ASTIN2007/http://www.actuaries.org/ASTIN2007/ for more information.for more information.

Look for brochure in October.Look for brochure in October.

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Any Further Any Further Comments . . . .Comments . . . .

Results of 2006 Elections – Ballot InitiativesResults of 2006 Elections – Ballot Initiatives

Basic Education IssuesBasic Education Issues

CAS Centennial Goal / ERM InitiativesCAS Centennial Goal / ERM Initiatives

Actuarial CredibilityActuarial Credibility

CAS Publications and ResearchCAS Publications and Research

Image of the Actuary CampaignImage of the Actuary Campaign

2006-07 Calendar of Events2006-07 Calendar of Events

Other TopicsOther Topics

Questions?Questions?

Thank You!Thank You!

Allan KaufmanCasualty Actuaries of Europe

London 20 October 2006

current cas issues and directions allan kaufman casualty actuaries of europe london 20 october 2006

Documents

cas board

board of directors

class of board members

board meeting

additional board members

cas members

nonactuary board members

proposed offer exam