Society of Actuaries Education UpdateMarch 12, 2013

Spring 2013 Actuarial Education EventDrake University

Stuart Klugman, FSA, CERA SOA Staff Fellow, Education

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AGENDA

FSA Requirements – Effective July 1, 2013

• Restructuring of all tracks Preliminary Exams

General Insurance Track

• Curriculum

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FSA RequirementsEffective July 1, 2013

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Fellowship Requirements (2013) Exams• Two five-hour exams• One two-hour exam

Modules• Three modules that are track-specific (though

some modules are shared)• Decision Making and Communication module

Fellowship Admissions Course

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FSA Designation (effective July 1, 2013)

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Fellowship Requirements The following tracks have separate Canada

and U.S. versions. Amount of difference depends on track.• Individual Life and Annuities• Retirement Benefits• Group and Health (new in 2013)• General Insurance

Other tracks are• Corporate Finance and ERM• Quantitative Finance and Investments

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Two Exceptions U.S. Retirement Benefits• The two Enrolled Actuaries Exams are

required. • Total of four, rather than three, exams

General Insurance• Additional exam on policy coverages and

business environment• Need background that goes beyond

introduction in FAP• May be a pilot for other tracks

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CERA option for all tracks On all tracks other than Corporate Finance

and ERM candidates may replace the two-hour track-specific exam with the four-hour ERM exam

Candidates who do so and also complete the ERM module will receive a CERA in addition to their FSA

This is not a change in CERA requirements

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Preliminary Exams

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Joint Arrangement with CAS Ending Effective December 31, 2013 Business as usual for SOA exams• Same curriculum• Same exam schedule• Same CBT availability

Candidates should proceed normally CAS will recognize the SOA exams

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Written-Answer Questions on MLC Third time a charm? Can ask questions more in line with

desired learning outcomes. Effective Spring 2014:• 40% multiple choice; 60% written answer• 4 hours (was 3 hours)• Twice per year• No change in source material• Written answers not graded for all

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General Insurance Track

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Motivation The SOA is currently the only major international

organization that covers many, but not all, practice areas

SOA candidates benefit by being able to explore all areas of actuarial practice before selecting a specialty track.

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Objectives of GI Track Be consistent with the other five SOA tracks• Track consistency is already an SOA objective

Be attractive to candidates regardless of location• Ensure that actuarial methodologies are represented

in the syllabus on a broad international basis• Nation specific material included for financial and

regulatory environment topics Be recognized as qualified to practice, including

the signing of statutory reports, in the U.S. and Canada.

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General Insurance Curriculum

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General Insurance Track

Financial and Regulatory Environment Exam(5 hours) Financial Economics Module

Applications of Statistical Techniques Module

Enterprise Risk Management Module(may be taken at any time)

Advanced Topics in General Insurance Exam (2 hours) orEnterprise Risk Management Exam (4 hours)

Introduction to Ratemaking and Reserving Exam(5 hours)

Introduction to General Insurance Exam (2 hours)

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Introduction to General Insurance Exam Coverages and business environment Multiple-choice exam with expected higher

pass rate Supplements material in FAP

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Introduction to Ratemaking and Reserving Exam

Unified view of ratemaking and reserving Global focus SOA has commissioned a textbook First offering in Fall 2013

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Financial and Regulatory Environment Exam

Will offer separate U.S. and Canadian versions

First offering in Spring 2014

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Financial Economics Module

Currently offered without General Insurance

Will add topics such as• Valuing the equity of a firm• Managing interest rate, cash flow, credit and

investment risks

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Advanced Topics in General Insurance Exam A two-hour exam Topics being considered include• Premium rates for excess, deductible and

individual risk rating• Reinsurance premium rates and reserves• Strategies for achieving a portfolio rate of

return• Estimating risk transfer

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Advanced Module - Applications of Statistical Techniques A new module to be introduced in 2013 An opportunity to provide a hands-on experience

with case studies Topics being considered include

• Generalized linear models with emphasis on classification ratemaking – including mixed models for adding credibility

• Cluster analysis• Stochastic and Bayesian reserving methods• Measuring reserve variability

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ERM Module

Same module used for other tracks Requirement for CERA Generic corporate risk management

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ERM Exam May take instead of the two-hour

Advanced Topics Exam Includes a choice of reading extension with

track-specific readings General Insurance already one of the

extensions

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Questions and Answers