Appointed Actuary Certificates Ottawa June 29 2006 John

Appointed Actuary Certificates Ottawa June 29, 2006 John Dark Bob Wilson

Why are we here? • To review the Exposure Draft of the proposed Qualification Standard for Appointed Actuaries Certificates (AAC) • Feedback at this meeting will be used by the working group on the AAC to revise the draft for presentation at the September Board Meeting • If it passes the Board it would be subject to member ratification at the October Chicago meeting (perhaps also by electronic voting)

Stakeholders • Direct – Actuaries functioning as : • AA’s • AA peer reviewers • Actuarial Specialists for auditing purposes of insurance entities (excluding Worker’s Compensation) • Indirect – – Regulators Public (whether they know it or not) All actuaries Users of the services of actuaries performing reserved roles

Who’s idea was this? • Appointed Actuaries committee put forward the first proposal which was exposed last year. • E. E. C. would administer like other qualification issues so we are proposing this.

Why do we need this? “The exposure draft has been issued partly because of the importance of the role of the AA and partly because of concerns expressed by regulators, as well as by some actuaries who have acted as external reviewers, that we need to do more to ensure that actuaries have the technical knowledge and relevant experience before taking on the role of an AA. ” - Charles Mc. Leod, C. I. A. President June 2006 CIA bulletin

Background • In the U. K. this has already happened to valuation actuaries in a form controlled by the Government not the actuaries themselves as a result of the Morris Commission (Equitable Life failure) • We believe Canadian actuaries have a very good track record setting standards for themselves and would like to retain this by being ahead of the regulators with rules we make ourselves

Who • FCIAs (life and P. &C. ) acting as : – AA’s – AA peer reviewers – Actuarial Specialists for auditing purposes of insurance entities (excluding Worker’s Compensation) • AA’s of companies, consultants etc. No plans to widen the scope

What • Yearly renewable certificate contingent on CPD, qualifications and experience • Needed before performing one (or more) of these reserved roles

Why • Demonstrates the holder has met a threshold in order to be able to consider this work • RULE 2 still applies

When • Annually renewable • Starting no later than January 1, 2008 and perhaps year end 2006

Where • Canadian work only • Qualification includes a requirement for specific Canadian experience

OK so what do you want to know? • Are there practical issues? • Are there errors or omissions in the Qualification Standard? • Do you support or oppose the concept and why? • Can we start December 31, 2006

How do I provide input • Preferably by e-mail to: john_dark@cooperators. ca Then we can share it with our working committee Otherwise right here and now – or volunteer for our Working Group!! Deadline date July 14, 2006

Nobody ever responds to Exposure drafts • 14 individuals and 2 committees so far plus 2 regulators and Assuris • Considerable thoughtful input

What kind of stuff do they say? Input received on : Start date; Experience requirements – years , specific experience etc. ; Application form; Concern about expansion to other areas; Appeals; etc.

Where can I get details ? • On the CIA website or e-mail me

What an AA has to say: • Bob Wilson, A. A. Sun Life, and Chair A. A. Committee

• Wish that we did not have to do this • Current proposal has flaws but limited by what can be passed • Significant difference in roles of AAs and this needs to be recognized. • Concern is not medium to large companies since Boards of Directors active and understand issues. • Rule 2 is not enough as the incompetent are the last to know that they are incompetent. • The job is a lot bigger than those just below the job believe.

Have there been problems? • Has anyone ever taken an AA job when they were not qualified? Yes • Has an AA ever been disciplined? Yes • Would this standard have prevented the appointment? Yes

View from the AA Committee • The Committee on the AA/VA supports the proposal. • The vote on the proposal was unanimous. – This does not happen often