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CAS Update Part 2

Steve D’ArcySteve D’Arcy

Midwestern Actuarial ForumMidwestern Actuarial Forum

March 23, 2004March 23, 2004

Current CAS Topics■ CAS Centennial Goal for 2014CAS Centennial Goal for 2014

■ Educational Process and Recent Exam ChangesEducational Process and Recent Exam Changes

■ Two Important Task ForcesTwo Important Task Forces

■ Research Working PartiesResearch Working Parties

■ 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?

Educational Process

■ FACT – Travel time is too FACT – Travel time is too long!long!◆ PartitioningPartitioning◆ Syllabus “Creep”Syllabus “Creep”

■ BOARD GUIDANCE TO BOARD GUIDANCE TO ADMISSIONS ADMISSIONS COMMITTEES:COMMITTEES:◆ Expect 5 to 7 years as Expect 5 to 7 years as

median time from first median time from first actuarial employment to actuarial employment to FCASFCAS

18.414.42000-2002

16.913.21995-1999

14.711.71990-1994

14.211.01985-1989

13.29.11980-1984

FCASACASYear

Achieving Designation

Number of Sittings to Designation

Exam 3

Pass RatiosPass Ratios

11/0011/00 05/0105/01 11/0111/01 05/0205/02 11/0211/02 05/0305/03 11/03 11/03

CAS Exam 3CAS Exam 3 44%44%

Overall Overall 36% 43% 42% 42% 40% 40%36% 43% 42% 42% 40% 40% 34%34%

CAS Workers CAS Workers 20% 33% 34% 33% 35% 39%20% 33% 34% 33% 35% 39% 24%24%

SOA WorkersSOA Workers 26%26%

Non-CAS Workers Non-CAS Workers 31% 38% 36% 36% 31% 35%31% 38% 36% 36% 31% 35% 27%27%

Students Students 54% 60% 54% 57% 55% 50%54% 60% 54% 57% 55% 50% 47%47%

Changes to Preliminary Ed

■ 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, Economics, Finance (4 hours)Exam 2: Interest, 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 EdApproved 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 Calculus (3 hours)Exam 1: Probability with Calculus (3 hours)◆ Exam 2: Interest (2 hours)Exam 2: Interest (2 hours)◆ Exam 3: Actuarial Models & Statistics (4 hours)Exam 3: Actuarial Models & Statistics (4 hours)◆ Exam 4: Actuarial Modeling (4 hours)Exam 4: Actuarial Modeling (4 hours)◆ Verification by Educational Experience: Economics, Finance, Verification by Educational Experience: Economics, Finance,

Applied Stats Applied Stats

Verification by Educational Experience■ Option 1: Submit a grade of B- or better and the college Option 1: Submit a grade of B- or better and the college

catalogcatalog◆ Intermediate Micro and MacroeconomicsIntermediate Micro and Macroeconomics◆ 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 Micro and Macroeconomics, CFA exams, etc. Micro and Macroeconomics, CFA exams, etc.

■ Option 3: Pass college-level exams offered by the CAS (may be Option 3: Pass college-level exams offered by the CAS (may be joint with the SOA). CAS committed to at least 2 yearsjoint with the SOA). CAS committed to at least 2 years

■ Option 4: Other experiencesOption 4: Other experiences◆ College correspondence coursesCollege correspondence 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 Econ & Finance Exam 2 + VEE for Econ & 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 Econ and/or Finance Most candidates take Econ 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■ Test questions for Applied Stats stress memorization Test 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

Shorter or Longer?

■ Actuarial Science majors currently graduate with two Actuarial Science majors currently graduate with two or more examsor more 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

Another Initiative to Reduce Travel Time

■ Computer Based TestingComputer Based Testing◆ Early examsEarly exams◆ Targeting Spring 2005 – Exam 1Targeting Spring 2005 – Exam 1◆ Candidate will receive results immediatelyCandidate will receive results immediately◆ More than two exam “windows” per yearMore than two exam “windows” per year

■ RFP responses currently being evaluatedRFP responses currently being evaluated

Exams - Education Consultant

■ Hired Education Consultant to help:Hired Education Consultant to help:◆ Construct appropriate learning objectivesConstruct appropriate learning objectives◆ Train to develop good thinking questionsTrain to develop good thinking questions◆ Help with methods for setting pass scoreHelp with methods for setting pass score◆ Provide input on evaluating exam length and difficultyProvide input on evaluating exam length and difficulty

■ CAS Policy: Pass marks reflect sufficient grasp of CAS Policy: Pass marks reflect sufficient grasp of material. No predetermined pass mark.material. No predetermined pass mark.

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?

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

■ May Board meetingMay Board meeting◆ Sunday, May 16 – Colorado SpringsSunday, May 16 – Colorado Springs◆ Task Forces on Membership Classes and ACAS RightsTask Forces on Membership Classes and ACAS Rights

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

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 Respond to Participation Survey or contact committee

chair directlychair directly◆ Join a working partyJoin a working party◆ Write papersWrite papers◆ Give presentationsGive presentations◆ Regional Affiliate involvementRegional Affiliate involvement

CAS Web Site

■ WWW.CASACT.ORGWWW.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

I 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 !!!!!