Mutual Recognition

Casualty Actuaries of Greater New YorkCasualty Actuaries of Greater New York

June 11, 2003

Gail M. Ross

What is Mutual Recognition?

A bilateral agreement, between the CAS and Actuarial A bilateral agreement, between the CAS and Actuarial Society “X” whereby an FCAS could be granted Society “X” whereby an FCAS could be granted

Fellowship in Society “X” (subject to terms of the Fellowship in Society “X” (subject to terms of the agreement). agreement).

In turn, an actuary achieving Fellowship in In turn, an actuary achieving Fellowship in Actuarial Society “X” could be granted Actuarial Society “X” could be granted

Fellowship in the CAS.Fellowship in the CAS.

Your View

Should the CAS be willing to enter into mutual Should the CAS be willing to enter into mutual recognition agreements with selected actuarial recognition agreements with selected actuarial organizations?organizations?

All those in All those in FAVORFAVOR of the concept of MR of the concept of MR

All those All those OPPOSEDOPPOSED to the concept of MR to the concept of MR

All those All those UNCERTAINUNCERTAIN about the concept of MR about the concept of MR

Historical Background

1999 Board action1999 Board action Not pursue bilateral agreementsNot pursue bilateral agreements Work to ensure practice rights globallyWork to ensure practice rights globally

Subsequent developmentsSubsequent developments CAS members were being excluded from certain CAS members were being excluded from certain

practices in Australia, Ireland, Indiapractices in Australia, Ireland, India CAS Board set an international strategy to be an active CAS Board set an international strategy to be an active

participant in the global community of P/C actuariesparticipant in the global community of P/C actuaries November 2001 - Board created a MR Task Force to November 2001 - Board created a MR Task Force to

revisit the issuerevisit the issue

The CAS Board’s Vision (11/02)

The actuarial profession is an increasingly global community. The The actuarial profession is an increasingly global community. The CAS seeks to foster a vibrant and effective global community of P/C CAS seeks to foster a vibrant and effective global community of P/C actuaries, to be an active participant in this global community, and to actuaries, to be an active participant in this global community, and to promote casualty actuarial science.promote casualty actuarial science.

The vision of the CAS is to be a global resource for education, The vision of the CAS is to be a global resource for education, knowledge, experience and applied research for P/C actuaries. We knowledge, experience and applied research for P/C actuaries. We seek to collaborate with other organizations that research and seek to collaborate with other organizations that research and educate in this field.educate in this field.

The CAS desires that The CAS desires that CAS membersCAS members and and other actuariesother actuaries be be recognized as qualified actuaries and be able to practice in all recognized as qualified actuaries and be able to practice in all countries and on all assignments where they have appropriate countries and on all assignments where they have appropriate knowledge and experience.knowledge and experience.

The CAS desires to attract future members with diverse The CAS desires to attract future members with diverse backgrounds, including future members from around the globe.backgrounds, including future members from around the globe.

The CAS Board’s Recent Action (11/02)

CAS Board voted to endorse the concept of entering into CAS Board voted to endorse the concept of entering into MR agreements with other actuarial organizations that MR agreements with other actuarial organizations that have specialty exam tracks in general (P/C) insurance. have specialty exam tracks in general (P/C) insurance.

CAS Board recognizes that:CAS Board recognizes that: Constitutional amendment will be requiredConstitutional amendment will be required Member support is necessaryMember support is necessary Member education/feedback is underwayMember education/feedback is underway

Big Audacious 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 integration of evaluation of hazard risk and the integration of hazard risk with strategic, financial and hazard risk with strategic, financial and operational risk.operational risk.

The Mutual Recognition Opportunity

Facilitates our members’ ability to practice in various Facilitates our members’ ability to practice in various jurisdictionsjurisdictions

Increases attractiveness of our exams to students in Increases attractiveness of our exams to students in other countriesother countries Get the CAS P/C educationGet the CAS P/C education Become FCASBecome FCAS Use FCAS to gain admission in local actuarial Use FCAS to gain admission in local actuarial

organizationorganization Improves CAS visibility, stature, and influence as an Improves CAS visibility, stature, and influence as an

active player in the global actuarial communityactive player in the global actuarial community

The Controls Being Discussed

MR agreements are only being considered with organizations that MR agreements are only being considered with organizations that have rigorous property/casualty educational, testing and continuing have rigorous property/casualty educational, testing and continuing education processes similar to the CAS.education processes similar to the CAS. Institute of ActuariesInstitute of Actuaries Faculty of ActuariesFaculty of Actuaries Institute of Actuaries of AustraliaInstitute of Actuaries of Australia

Individual actuaries applying for FCAS by mutual recognitionIndividual actuaries applying for FCAS by mutual recognition Must demonstrate knowledge and experience in P/C field, e.g.,Must demonstrate knowledge and experience in P/C field, e.g.,

Took P/C specialty track in home organizationTook P/C specialty track in home organization N out of M most recent years working in fieldN out of M most recent years working in field

Take CAS Course on ProfessionalismTake CAS Course on Professionalism Letters of referenceLetters of reference

The Controls Being Discussed

FCAS by Mutual Recognition is subject to:FCAS by Mutual Recognition is subject to: Code of ConductCode of Conduct Standards of PracticeStandards of Practice Qualification StandardsQualification Standards

Candidates would not be allowed to use a “derived Candidates would not be allowed to use a “derived qualification” to apply for membership in the CASqualification” to apply for membership in the CAS

Major Objections / Responses

There will be a flood of actuaries from other There will be a flood of actuaries from other organizations applying for the FCAS organizations applying for the FCAS designationdesignation There are only 200 members of the IA/FA that have There are only 200 members of the IA/FA that have

completed the P/C track.completed the P/C track. SOA and CIA have had MR agreements with the IA/FA/ SOA and CIA have had MR agreements with the IA/FA/

IAA for a number of years and have had less than 25 IAA for a number of years and have had less than 25 MR applicants.MR applicants.

Major Objections / Responses

The other actuaries applying will be less The other actuaries applying will be less qualified since the examination path will not be qualified since the examination path will not be identicalidentical ““Different” does not imply “Less Rigorous”Different” does not imply “Less Rigorous” The IA/FA/IAA offer education and exams in areas that The IA/FA/IAA offer education and exams in areas that

we don’t (e.g., actuarial control cycle)we don’t (e.g., actuarial control cycle)

Major Objections / Responses

MR will be a distraction and will divert CAS MR will be a distraction and will divert CAS resources from focusing on issues that face our resources from focusing on issues that face our members in the USmembers in the US Will give us additional resources to achieve our goalsWill give us additional resources to achieve our goals

What’s In It For Me?

Being associated with the worldwide leader in Being associated with the worldwide leader in casualty actuarial sciencecasualty actuarial science

Broader job opportunitiesBroader job opportunities An opportunity to further develop skills and An opportunity to further develop skills and

expertiseexpertise

What Are The Implications of Not Pursuing MR?

Undermines the BAGUndermines the BAG Isolates the CAS from the rest of the worldIsolates the CAS from the rest of the world The actuarial community might perceive the The actuarial community might perceive the

CAS as not interested in the concerns of other CAS as not interested in the concerns of other countriescountries

Someone else will likely fill our spotSomeone else will likely fill our spot

Your Turn

Questions?Questions? Concerns?Concerns? Issues the Board should be certain to address?Issues the Board should be certain to address? Other ideas/commentsOther ideas/comments

Your View

Should the CAS be willing to enter into mutual Should the CAS be willing to enter into mutual recognition agreements with selected actuarial recognition agreements with selected actuarial organizations?organizations?

All those in All those in FAVORFAVOR of the concept of MR of the concept of MR

All those All those OPPOSEDOPPOSED to the concept of MR to the concept of MR

All those All those UNCERTAINUNCERTAIN about the concept of MR about the concept of MR

THANK YOU !!!!!