CIA (e)Bulletin/(e)Bulletin de l'ICA

Canadian Institute of Actuaries/Institut canadien des actuaires

September 2010
Your Institute






By Micheline Dionne, FCIA

CIA President

It’s already been three months since I’ve been President. Wow, time really does fly!

Here I was thinking that summer would be quiet; I was planning on taking some time off before the September madness swept in and dragged me in its wake. But then came the census controversy, just when—naturally—almost everyone was on vacation.

This gave rise to all sorts of questions: Should we respond? Do we have the necessary resources to do so? Strategically, is this the best time to respond? Do we have even the slightest chance of making a difference and adding a new argument to the debate?


The challenge was certainly daunting, but at least our cause was good. What’s more, I was happy my first intervention as President was going to involve something uncontroversial—at least from an actuarial perspective . . . Wrong! That’s not even considering the fact that many of you have political opinions and that in politics, even actuaries have a hard time keeping their cool. Who ever said actuaries don’t have a personality?


I think we came out pretty well, once we got past our initial hesitation, and the group that examined the issue responded with diligence and professionalism. Our press release generated interest, and brought on my first telephone interview requests, one in English and the other French. Looking back at my "on the air" initiation, I must say the interview in French was way easier than the English . . .

Returning to our objectives, did we contribute in making a difference? I highly doubt it, unfortunately, but our effort was commendable, we managed to make good use of the general listserver and part of the population is now more aware of the importance of accurately answering census questions.

We had a lovely August, and I visited the cottage for a few days. My spouse chose our cottage somewhere in wilderness as he thinks vacations are a time to rest (translation: no telephone access or electronic signal, unless you row to that one little spot in the middle of the lake or hop on a bike for 10km). So between the rowing and the cycling, I returned home with buffed-up arms and legs, but well-rested despite all.

The next storm will come from Daniel, who—excited by his new job—told me he’ll be stepping down as executive director on October 1. Why does it have to be during my term? What did I do to deserve this? Why not a year from now, when it will be Jim’s turn to take the helm? So far I haven’t managed to convince either Daniel or Jim . . .

The silver lining—and this is indeed good news—is that we now have a golden opportunity to review the strategy pertaining to the Secretariat and find someone who can offer us something new while at the same time building on Daniel’s legacy. The last six years have brought with them a raft of changes within the Institute, and as a result our needs have evolved. Six years ago we were absent from the public stage, whereas now we participate in the social discourse on retirement, health, employment insurance, and automobile insurance pricing. However, certain internal tensions are proving increasingly divisive, and we must better encourage research and update models put to the test during the recent financial crisis. We’re going to take advantage of this opportunity and keep you apprised. In the meantime, feel free to send me ideas you may have.

As of this writing, preparations are in full swing for the Board meeting. Items on the agenda include reform of retirement income plans, research projects, a new education system, changes in international standards, an updated Board governance mode and alterations to Rule 13. I’ll have an opportunity to discuss all of this in our October issue. Stay tuned . . . Talk to you soon!

If you have any questions or comments that you would like to share, please contact me at president@actuaries.ca.
 
Spotlight

By Jean-Yves Rioux, FCIA


Risk management attracted a lot of attention recently as many risk professionals reviewed the impact of the financial crisis and reassessed what worked well and what had to be improved. There is no doubt that higher importance and priority is now placed on developing a strong enterprise risk management (ERM) framework.
 
I am pleased to have been appointed Chair of the ERM Applications Committee guiding and coordinating the efforts of talented individuals sharing a common vision: "the positioning of the profession within the ERM space". This positioning faces many challenges, including competition from other risk professionals and the fact ERM is an evolving practice.
 
I see the committee’s activities falling in four key areas under which we have a number of initiatives, many of them included in the latest CIA strategic plan. The following summarizes them by area:

Promotion within and outside the profession Education and Continuing Professional Development Technical knowledge
Collaboration, relationships and
opinions
Actuaries’ profiles in (e)Bulletin

ERM booklets

Strengths, weaknesses, opportunities and threats (SWOT) survey

Qualification brochure(s)

Elevator speeches

Reaching out
Annual Meeting ERM Track

ERM webcast


Feedback to Eligibility and  Education Council from SWOT survey
Joint Risk Management Section (JRMS) research dissemination

ERM web-based index
JRMS relationship

Chartered Enterprise Risk Analyst (CERA) relationship

Committee on Risk Management and
Capital Requirements (CRMCR) relationship


Recommendations related to public policy research

In addition to the above initiatives, the committee is contemplating other potential activities such as supporting specialty seminars, contributing to e-learning and other CPD initiatives and developing a risk framework.
 
The SWOT exercise completed last year, which entailed surveying actuaries with interest in the ERM field, allowed us to develop a consensus on our weaknesses and strengths in competing for leading roles in the ERM space. The survey results can feed into many of our projects, including the promotion initiatives and recommendations for the education and continuous development activities.
 
Examples of visible products from the committee include the production over the past couple of years of two booklets (Enterprise Risk Management:  Should you be doing it? and Enterprise Risk Management:  Who is doing it?) and the supporting of the production of 35 essays on the financial crisis, jointly published by the CIA, Casualty Actuarial Society and Society of Actuaries. I encourage you to read these pieces if you have not had the opportunity to do so. They are available at:

As we are working on delivering on those initiatives and planning for others, we realize the need to add to our team of volunteers. If you are interested in helping toward this vision, please contact the Institute and mention your interest in volunteering with the ERM Applications Committee by going to the Members Site > Toolkit > Update Committee/Task Force Interest.
 
Jean-Yves Rioux is Chair of the Enterprise Risk Management Applications Committee.
 
MOVERS AND SHAKERS
We want cleaner air, but we also want to drive to work or our vacation.

Vehicles are a significant source of pollution. And with the price of gas now exceeding a dollar a litre in many parts of the country, it just makes sense to change a few habits to save money while improving the fuel efficiency of the family car.

The environmental cost of personal transportation

Whenever your vehicle is using fuel, it produces emissions including greenhouse gases (GHGs). Carbon dioxide (CO2) is a primary GHG, and the amount of CO2 your vehicle generates depends on the amount and type of fuel used.

For every litre of gasoline used, about 2.4 kg of CO2 are produced; for every litre of diesel, about 2.7 kg of CO2 are produced. The good news is that there are many things you can do to decrease your GHG numbers, save gas and reduce your impact on the environment.

Get pumped about tires

Under-inflated tires means your vehicle isn't driving as smoothly as it should, which decreases your vehicle's fuel efficiency and produces greater greenhouse gas emissions. This is especially true in urban areas where poor air quality, like smog, is prevalent. In fact, driving your vehicle with just one tire under-inflated by eight pounds per square inch can reduce the life of your tires by a whopping 15,000 kilometres.

Once a month, you should check your vehicle's tire pressure is correct.

Easy on the gas and the brake

Abandon dreams of being a racecar driver out on the open road. Cruising at the speed limit allows you to take in all of the scenery and cut your gas consumption. With most vehicles, revving up your engine from 100 km/h to 120 km/h will burn 20 percent more gas.

Some drivers leave their left foot resting on the brake pedal while driving. This habit decreases fuel efficiency and wears out the brakes prematurely. It also can be dangerous because it causes heat build-up in the brakes, which reduces braking power. In addition, this means the brake lights stay on all the time and the poor souls travelling behind have no warning when the driver actually applies the brakes to slow down or stop.

Rent a greener car

If your regular ride is a bit of a gas hog, consider reducing your environmental footprint by renting a hybrid for your next road trip. Many companies are now offering these vehicles along with their regular fleet. They’re cleaner and quieter, and the visit to the pump is much less traumatic.

A hybrid vehicle combines the conventional gas engine with a battery. In city traffic, energy stored in the battery powers the vehicle, virtually using no gasoline. On the open road, the gas engine kicks in, but the rate of fuel efficiency is high.

Driving Tips

  • Drive smartly Avoid rapid acceleration and heavy braking. Driving aggressively can lower fuel mileage by as much as 37 percent. Slow down to save gas, and smell the fresh air instead of emissions.
  • Minimize drag Remove roof and rear-mounted racks when they are not needed. A loaded roof rack can increase gas consumption by up to five per cent. Even empty racks increase aerodynamic drag and reduce fuel efficiency.
  • Hot weather Even if your automobile is serviced regularly, be sure to have it inspected before a major road trip in warm weather and advise your technician of your travel plans, such as whether you’re headed to the mountains or towing a trailer.
  • Cold weather Snow building up in wheel wells and under bumpers adds weight and rubs against tires, further increasing rolling resistance. And snow piled on top of the vehicle increases aerodynamic drag and vehicle weight. For safety as well as fuel efficiency, clear snow off your vehicle before you drive away.
Environment Canada's website is the source of this article:
http://ec.gc.ca/education/
 
Institute News

 A group of young actuaries were honoured at this year's CIA Annual Meeting after reaching what then-President Bob Howard called "a very significant milestone in their careers".
 
A large audience at one of the meeting's two luncheons watched Mr Howard present Fellowship certificates to the following new Fellows, pictured above with him:
 
 
Philippe Allard Johnny Chun Yee Lam 
Irfan Shariff
Mark Andrews Henry Leung Weibing Tian
Cecilia Wing Sze Ho  Andrew Loach Shawnee Thorsteinson
Yongwoon Kang David Ménard Brant Wipperman
Andy Kenyon Paul Rothery


   The event also included presentations to several long-serving CIA members.
 
Bronze Awards were earned by Julie Chambers, Geoffrey Gibson, Linda Goss, Naveed Irshad, Jean-Marc Léveillé, Cara Low, Robert Mallette, Lloyd Milani, Laura Newman, Phil Rivard, Lorne Schinbein, Jason Wiebe and Lisa Zwicker.

Silver Awards went to Stephen Humphreys, Jacques Lafrance, Shriram Mulgund and Faisal Siddiqi.
 
 The top honour, the Gold Award for those who have completed 12 periods of service, was achieved by Wally Bridel, Luc Farmer, Chris Townsend, Doug Townsend and Jacques Tremblay.
 
Pictured below are Jacques Tremblay, Luc Farmer, Jacques Lafrance and Chris Townsend with then-President Bob Howard.
   
 







By Abinash Churoria

Not many people realize that a year in which a person is born can be a critical factor in determining how long they will live. Welcome to the fascinating world of cohort research in particular, and mortality research in general.
 
In actuarial science we come across cohort a number of times, but seldom do we explore deeper. Its dictionary meaning is a group of people who share a common feature or aspect of behavior. In mortality research what we consider primarily is a cohort of people born in the same time period, say in the same decade—more commonly known as "year of birth cohort." Though a "cohort effect" can be observed in any population, the cohort effect in the UK’s population is quite pronounced and well researched.

The Continuous Mortality Investigation Bureau (CMI) is an organization of the Actuarial Profession whose mandate is research into the UK’s mortality and morbidity experience. It is funded by its members, the majority of whom also submit data. They also receive regular reports. CMI has sponsored research into the detailed examination of the cohort effect, the results of which were published in 2002 in Working paper 1.

In the context of the UK, cohort effect denotes a phenomenon whereby people born between 1925 and 1945 (centered on the generation born in 1926) have experienced more rapid improvements in mortality than people on either side of the period. A graphical representation of the cohort effect may give a more insightful view.
 

















 
Figure 1. Mortality improvement by age and decade for males in the population of England and Wales. Data source: Office of National Statistics (ONS), 2001.

The data used to produce figure 1 are given in table 1. The age groups showing the fastest improvement are highlighted in bold type and can be seen to move diagonally, indicating that the same birth cohort has consistently experienced the most rapid mortality improvement.

The equivalent information for females is given in table 2.  The figures in table 2 indicate that exactly the same "cohort effect" has applied for females as males. This is notable given that the relative importance of different causes of death varies by gender.

Table 1
Percentage mortality improvement by age and decade for males in the population of England and Wales. Data source: ONS, 2001.

 Age group
 Decade
   1960s  1970s  1980s  1990s
 25-29 1.5 0.1 0.4  -0.9
 30-34 1.7 1.4  -0.6  -0.8
 35-39 1.7 1.0 0.3 0.9
 40-44 0.1
2.1 2.1
0.5
 45-49 -0.2
1.8
2.3
1.3
 50-54 0.2
0.9
3.1
2.3
 55-59 1.0
0.9
3.1
2.4
 60-64 1.0
1.0
2.0
3.2
 65-69 0.1
1.4
1.6
3.1
 70-74 0.1
1.2
1.7
2.2
 75-79 0.7
0.3
1.6
1.9


Table 2
Percentage mortality improvement by age and decade for females in the population of England and Wales. Data source: ONS.

 Age group
 Decade
   1960s  1970s  1980s  1990s
 25-29 1.6
0.7
 2.6  0.4
 30-34  2.5  1.2  0.8  0.6
 35-39  1.7  1.5  1.4  0.7
 40-44  0.5  2.0  1.7  0.3
 45-49  0.4  1.8  2.2  1.2
 50-54  0.0  0.6  2.7  1.4
 55-59  0.3  0.3  2.0  2.0
 60-64  1.1  0.3  0.9  2.7
 65-69  1.2  0.9  0.6  2.4
 70-74  1.4  1.3  1.0  1.2
 75-79  1.6  1.2  1.5  1.0

What was so unique about people born between 1925 and 1945 that their mortality rates were markedly lower from those of people born either side of that period? Experts highlighted a combination of primary factors that led to this cohort effect:

a) World War II: People born in the 1930s and early 1940s did not fight in a major global conflict, as earlier generations did in the form of World War II. So the cohort effect can be attributed to more adverse effects experienced by those previous generations rather than beneficial effects experienced by the later generations (born in 1930–1945).

b) Diet: The diet in postwar Britain had health benefits for children growing up in that period. Food rationing lasted until the 1950s, but the average consumption of fresh vegetables, milk, potatoes, bread, fish, etc., was higher during the postwar years. Conversely, the consumption of meat and cheese was lower during the same period.

c) Welfare state: the period after 1940 was a time of great social change in the UK. For instance, the right to secondary education was made universal in 1942 and the National Health Service was launched in 1947. Hence the social environment in the 1940s was very different to that of previous decades.

d) Smoking histories: the smoking histories of various generations are very different. During World War II cigarettes were distributed free to those on active service, and many of those born in the 1920s and earlier were probably in the forces and smoking profusely. But it was after the war that tobacco’s hazardous health effects began to be investigated in earnest. So by the time those born in the 1930s reached adulthood the link between smoking and adverse health effects was becomingly increasingly well-known. Consequently, cigarette consumption slowly began to fall. Also, the so-called Doctors Study which investigated the impact of smoking patterns on mortality differentials between smokers and non-smokers was initiated in 1951.

e) Historic birth rates: last but not least is the fact that the "high improvement birth cohort" coincided with a trough in birth rates relative to the period immediately before and after it. A graphical representation will clarify the point.

 

















 
Figure 2. Live births in England & Wales – 1900 to 1970. Data source: www.mortality.org

Birth rates increased by 31 percent between 1941 and 1945, which may be quite relevant. One possible consequence of dramatic change in the rates is that the "average" child is likely to be quite different from children born immediately before and after that period. Further evidence of this can be found if we plot the birth rates over this period by socio-economic class. Amid declining birth rates, if we find that the rates of the affluent class have improved vis-à-vis the not-so-affluent class, the population’s socio-economic mix changes.

Once we are familiar with the causes, we need to ask, how does it affect various actuarial tasks? The mortality projections released by CMI in its report CMIR 17—more popularly known as "the 92 series"—did not incorporate the impact of these birth cohorts. So in 2002 the CMI produced the Interim Cohort Projections, a revised set applicable to the 92 series:

a) Long cohort: under this set of improvements it was presumed that the cohort effects would tail off by the year 2040.
b) Medium cohort: under this set it was presumed the effects would tail off by 2020.
c) Short cohort: under this set it was presumed the effects will tail off by 2010.

The world of mortality analysis is an intriguing field of research with the study of cohorts being just a small part. Predicting death is not an easy task, but at least small efforts can be made to understand the way human lives have evolved and are evolving over time. As singer Kanye West said: "Nothing in life is promised except death."

Sources:

CMI. Working paper 1
Richard Willets, FFA. ‘Mortality in the next millennium.’ Presented to the Staple Inn Actuarial Society, December 7, 1999.

Abinash Churoria is a student member of the Institute of Actuaries of India, and the Faculty and Institute of Actuaries.
 
Leon Leckie, FCIA (1965)
John Linnell, FCIA (1965)
J.C. Alan Macdonald, FCIA (1965
)
Jacques Pellerin, FCIA (1992)
Rodney C. Wilton, FCIA (1974)
 
THIS MONTH'S PUBLICATIONS

Guidance for Assumptions for Hypothetical Wind-Up and Solvency Valuations Update – August 2010

The most recent guidance from the Committee on Pension Plan Financial Reporting (PPFRC) regarding assumptions for hypothetical wind-up and solvency valuations was provided in an educational note dated April 13, 2010. An update was issued on June 15, 2010 which was based on a review of data collected as of March 31, 2010. The review concluded that there was insufficient evidence to warrant amending the guidance provided in the April 2010 educational note.

Methodology


The guidance contained in the April educational note as to estimated annuity purchase costs for non-indexed group annuities was based primarily on quotes provided by six insurance companies on illustrative group annuities using pricing conditions as at December 31, 2009.


Analysis


In an effort to continue to monitor group annuity pricing, the PPFRC obtained illustrative quotes on a similar basis to those obtained at December 31, 2009, but based on pricing conditions as at June 30, 2010. The illustrative non-indexed quotations at December 31, 2009 and June 30, 2010 may be summarized as follows:

 
 Average of the three most competitive quotes
(using UP94@2020 mortality tables)
   Large purchase Small purchase
   31/12/2009  30/06/2010  31/12/2009  30//06/2010
Retirees        
Discount rate  4.51%  4.33%  4.52%  4.28%

Spread over CANSIM V39062

 +0.42%  +0.74%  +0.43%  +0.69%
Deferred vesteds        
Discount rate  4.46%  4.31%  4.40%  4.07%

Spread over CANSIM V39062

 +0.37%  +0.72%  +0.31%  +0.48%
 
For the retiree group of the large non-indexed purchase, there was an increase in the excess (spread) of the average of the discount rates for the insurers that provided the three most competitive quotes, in conjunction with the UP94@2020 mortality tables, over the yield on Government of Canada (GoC) long-term bonds (series V39062) of 32 basis points (bps). Similarly, the spread for the deferred vested members of the large purchase increased by 35 bps.

There was an increase in the spread of 26 bps for the retiree group of the small non-indexed purchase, and the spread for the deferred vested members of the small purchase increased by 17 bps.

The illustrative quotes as at June 30, 2010 suggest that, since December 31, 2009, the spread between non-indexed group annuity purchase discount rates and the yields on GoC long-term bonds may have increased by roughly 30 to 35 bps for large purchases and by roughly 15 to 25 bps for smaller purchases.


From discussions with a few insurers, the PPFRC understands that the group annuity market was not very active during the first half of 2010. However, the PPFRC has been able to obtain limited data on recent actual group annuity purchases, which seem to corroborate an increase in discount rate spreads since December 31, 2009. Overall, the PPFRC concluded that the actual purchase data did not exhibit any pattern that invalidates the information contained in the illustrative quotes, especially given the fact that the actual purchase data were limited in quantity.


Guidance for Non-Indexed Pensions

Based on the analysis described above, the PPFRC has concluded that, for valuations with effective dates on and after June 30, 2010, an appropriate discount rate for estimating the cost of purchasing a non-indexed group annuity would be determined as the unadjusted yield on GoC long-term bonds (CANSIM V39062) increased arithmetically by 70 bps, in conjunction with the UP94@2020 mortality tables. This guidance applies to both immediate and deferred pensions and also applies regardless of the overall size of a group annuity purchase.


The revised guidance on spreads applies to valuations with effective dates on and after June 30, 2010 up to December 30, 2010, pending any further guidance or other evidence of change in annuity pricing.


Example


As at June 30, 2010, the unadjusted CANSIM V39062 rate was 3.59%. This rate would form the basis for developing an appropriate underlying discount rate for valuations of non-indexed group annuities with effective dates of June 30, 2010 and July 1, 2010. Prior to rounding, an applicable underlying discount rate would then be determined as 3.59% + 0.70% = 4.29%.


Validity of April 2010 Educational Note


With the exception of the revisions to the guidance contained in this memo, actuaries would continue to reference the April 13, 2010 educational note for guidance with respect to the selection of assumptions for hypothetical wind-up and solvency valuations with effective dates between December 31, 2009 and December 30, 2010.


Link:
http://www.actuaries.ca/members/publications/2010/210056e.pdf

Contact with Questions: Gavin Benjamin, Chair, Committee on Pension Plan Financial Reporting, at gavin.benjamin@towerswatson.com

Merger of the Faculty of Actuaries in Scotland with the Institute of Actuaries

The members of the Faculty of Actuaries in Scotland and of the Institute of Actuaries resolved on May 25, 2010 to proceed with the merger between the two bodies. The transaction to give effect to the merger was completed on August 1, when the faculty’s Royal Charter was surrendered and the institute (renamed as the Institute and Faculty of Actuaries) became the sole actuarial association in the UK. Given that the faculty no longer exists, references to the faculty in local legislation, in members’ wills, in private contracts and in trusts may no longer be effective.


Local Legislation


Any references to the Faculty of Actuaries or to the Institute of Actuaries should be reviewed, where appropriate being replaced by the Institute and Faculty of Actuaries. Where there is a reference to the Institute of Actuaries alone, a change is not needed because the legal entity will continue. However, it is recommended that this change is made to avoid any confusion in the future.


Wills and testamentary writings


If any CIA members have made a bequest to the faculty in their wills, following the merger the bequest may no longer be effective, depending on its construction. Members to whom this is relevant should review their wills with their legal adviser.


Trusts


There are likely to be a number of trusts that require adjustment upon completion of the merger. This is particularly the case where a trust deed appoints an office bearer or member of the faculty as trustee. It is recommended that anyone responsible for such a trust consult with a legal adviser to ensure that any provisions remain effective.


Court Orders


Pension valuations in litigated matters, such as divorce proceedings, may be one way in which the merger could have relevance to the orders of the court. Where there are outstanding court orders or judgments mentioning the faculty that are not capable of implementation until after the merger has completed, affected parties may require to obtain an amended judgment referring to the new merged body. Prior to approaching the court in this regard, however, individuals are recommended to consult with their legal adviser.


Link:
http://www.actuaries.org.uk/

Contact with Questions:
The institute and faculty’s main switchboard is +44 (0)20 7632 2100

To Appointed Actuaries and Other Interested Parties


The CIA is providing comments to the IASB (and subsequently to the FASB) Exposure Drafts on Insurance Contracts (IFRS 4 Phase II), and wishes to offer insights into the proposed discounting methods’ dynamics and, potentially, suggest different approaches.


Some actuaries have indicated their company’s interest in providing information and support in modeling alternative discount rate scenarios. The Institute is now broadening that opportunity to all interested parties.


If your company is willing to supply information regarding the impact of the proposed discounting methodology, and to run additional tests on existing blocks of business, please e-mail Jim Doherty (
Jim.B.Doherty@ca.ey.com), including the contact person’s details.

Contact with Questions: Jim Doherty at Jim.B.Doherty@ca.ey.com

Call for Essays – Risk Management


The Joint Risk Management Section (SOA/CAS/CIA) and the SOA Investment Section are issuing Round Two of a call for essays on Systemic Risk, Financial Reform, and Moving Forward from the Financial Crisis. Details are available at the link below.


Unlike the first call for papers, there is also a nominal monetary prize for worthy papers – 1st Place, $500; 2nd Place, $250; and 3rd Place, $100.

Link: click here

Contact with Questions: Bob Wolf, SOA staff Fellow, risk management, at rwolf@soa.org or at 847-706-3560

Report – Task Force on Segregated Fund Liability and Capital Methodologies

The Task Force on Segregated Fund Liability and Capital Methodologies has developed the attached report. It presents recommendations for the determination of policy liabilities for segregated fund guarantees and considerations for setting capital requirement for these guarantees.


Should you have any queries or comments regarding this report, please contact Alexis Gerbeau at
alexis.gerbeau@standardlife.ca.

Link:
http://www.actuaries.ca/members/publications/2010/210053e.pdf

Contact with Questions:
Alexis Gerbeau, Chair, Task Force on Segregated Fund Liability and Capital Methodologies, at alexis.gerbeau@standardlife.ca

Permanent Position for an Actuary at Essec Business School Paris


The Department of Information Systems and Decision Sciences at Essec Business School invites applications for a full-time faculty position in applied mathematics: statistics, applied probability or econometrics, specializing in actuarial sciences, in order to create a research and teaching Chair in Actuarial Sciences.


Essec is a leading European business school (one of the top French grande ecole), with two campuses in the Paris metropolitan area and one in Singapore. It offers mostly graduate-level training in business administration (MSc, executive MBA, specialized masters, PhD/doctorate). In 1997, it became the first AACSB-accredited business school outside North America. Details about Essec and the department can be found at
http://www.essec.edu/.

To be considered, candidates should hold a PhD (or equivalent) in applied mathematics: statistics, applied probability or econometrics, as well as the title of actuary.


The position is open with the objective of creating a research and teaching Chair in Actuarial Science, and the candidate should hold significant non-academic professional experience in the actuarial field.


Rank of appointment and salary will be commensurate with qualifications and experience. Candidates will have the opportunity to teach in statistics or/and econometrics at the master or PhD levels.


Candidates should send a cover letter, a complete vita, and sample copies of their research (published or working papers) to:


Administrative Assistant in Decision Sciences

Department of Information Systems and Decision Sciences
Essec Business School
Avenue Bernard Hirsch
BP 50105
95021 Cergy-Pontoise Cedex
France
Preferably, please send applications via e-mail only to: stats@essec.fr

The final closing date for applications is November 15, 2010.


For further information on academic matters at Essec, prospective candidates are invited to contact Prof. Kratz (
kratz@essec.fr).

Contact with Questions: See above

Annual Meeting Audio Files on CIA Website


The audio files of the presentations recorded at the CIA Annual Meeting held on June 29–30, 2010 have been posted to the CIA website (Members Site), available under Publications > Proceedings > Annual Meeting.


Contact with Questions:
Nancy Jenkinson, Manager, Meeting Services at nancy.jenkinson@actuaries.ca

Voluntary Survey No Substitute for Mandatory Census

The Canadian Institute of Actuaries released a press release on the current debate regarding the mandatory nature of the long-form census questionnaire.


Link:
http://www.actuaries.ca/members/publications/2010/210052e.pdf

Contact with Questions:
Les Dandridge, Director, Communications and Public Affairs, at les.dandridge@actuaries.ca

The Profession’s Public Position on the Long-form Census Questionnaire


The CIA has prepared a public position on the current debate regarding the mandatory nature of the long-form census questionnaire. Members are encouraged to click on the link below to review the document.

Link: pdf

Contact with Questions: Chris Fievoli, Resident Actuary, chris.fievoli@actuaries.ca

2010 Annual Meeting of the Conference of Consulting Actuaries (CCA) – October 24–27, 2010

You are invited to attend the Conference of Consulting Actuaries’ (CCA) 2010 Annual Meeting in Rancho Mirage, California (just outside Palm Springs). The meeting is from Sunday through Wednesday, October 24–27. The CCA has put together an international track and a broad spectrum of other session topics; many could be beneficial in helping to meet your continuing professional development (CPD) requirements.


The CCA Annual Meeting is widely recognized for its quality continuing education sessions and diverse program. Attendees also have numerous opportunities to meet and interact with thought leaders in the actuarial profession. These opportunities extend beyond the sessions with our Tuesday afternoon networking forums, from Healthcare Reform to Public Pension Plans and Small Firms. In addition, we have our Monday evening gala event on site at the Westin Mission Hills. On Tuesday evening we have a poker event.


We hope to see you in sunny Rancho Mirage, California!


For more information, please click on the link below.


Link:
http://www.ccactuaries.org/events/am2010/register.html

Contact with Questions:
Conference Office – phone 847-719-6500; e-mail conference@ccactuaries.org

The Practice Council Approves a Public Opinion on IFRS


International Financial Reporting Standard 4 (IFRS 4) deals with the measurement of liabilities for insurance contracts. It is still a preliminary standard (often called "Phase 1"), but will apply in Canada when we move to IFRS in 2011.


The Practice Council of the CIA believes that current methods of valuation satisfy the requirements of paragraph 14 of IFRS 4, and hence PPICPs may continue to use current methods for the measurement of PPICP benefits in Canada after IFRS is adopted.


Link:
pdf

Contact with Questions:
Tyrone Faulds, Chair, Practice Council, at ty.faulds@londonlife.com

The Profession’s Response to the Long Census Form Issue


CIA President Micheline Dionne sent a letter yesterday to Minister Clement stating the Institute’s concerns about the recent Statistics Canada announcement regarding the replacement of the mandatory version of the long census form with a voluntary version.


A robust exchange on the issue is happening on the general list (general@actuaries.ca). If you do not yet subscribe to the general list, log on to the members website, then click on Toolkit and then on Update List Subscriptions.


To learn more, please read the letter at the link below.


Links:

Letter to Minister Clement:
pdf

To subscribe to the general list: http://www.actuaries.ca/members/security/index_e.cfm

Contact with Questions:
Micheline Dionne, President, at president@actuaries.ca

Submission to the Nova Scotia Pension Review Panel

The Canadian Institute of Actuaries presented its comments on the discussion paper on pensions issued in March 2010 by the Nova Scotia Department of Labour and Workforce and which followed Promises to Keep, the report issued by the Nova Scotia Pension Review Panel.


Link:
http://www.actuaries.ca/members/publications/2010/210050e.pdf

Contact with Questions:
Michel St-Germain, Chair, Member Services Council, at michel.st-germain@mercer.com

Continuing Professional Development (CPD) Opportunities!

The following opportunity is available to you in the fall to network with your peers and accumulate structured CPD hours:


CIA Pension Seminar – November 3, 2010 at the Hilton Bonaventure Hotel in Montréal, Québec.


Link:
http://www.actuaries.ca/meetings/specialty_seminars_e.cfm

Contact with Questions: Nancy Jenkinson at nancy.jenkinson@actuaries.ca; telephone: 613-236-8196 ext. 104; fax: 613-233-4552

CIA Pension Seminar – November 3, 2010

Registration is now open!


The CIA Pension Seminar will take place on November 3 at the Hilton Montréal Bonaventure Hotel.


The program and the online registration form are now available on the CIA website. You can register by fax, by mail, or online with our secure transaction registration form.


You will find information on the sessions, registration, accommodation and transportation at the link below.


Link:
http://www.actuaries.ca/meetings/pension/2010/index_e.html

Contact with Questions:
Nancy Jenkinson, Meeting Services, at nancy.jenkinson@actuaries.ca. Tel: 613-236-8196 ext. 104; fax: 613-233-4552

Revised Study on Canadian Group Long-Term Disability Termination Experience (1988–1997)

A revised version of the Study on Canadian Group Long-Term Disability Termination Experience (1988–1997) has been published following changes to the acknowledgements section.

The study also now includes a table on disabled recovery and mortality.


To view the revised study and table, please access the links below.

Contact with Questions: Peter Douglas, Chair, Group Life and Health Experience Subcommittee, at douglas@uregina.ca

Exposure Draft to Revise the Standards of Practice – Dynamic Capital Adequacy Testing – Section 2500

This exposure draft for amendments to the Standards of Practice – Dynamic Capital Adequacy Testing – Section 2500 was approved by the Actuarial Standards Board on June 3, 2010.

It proposes changes to Section 2500 resulting from the publication of Guideline E-18 (Stress Testing) by the Office of the Superintendent of Financial Institutions (pdf).

Comments on this exposure draft are invited, particularly from actuaries practicing in this area, by September 10, 2010. Please send your comments, preferably in an electronic format, to Jacques Tremblay at jacques.tremblay@oliverwyman.com with a copy to Chris Fievoli at Chris.Fievoli@actuaries.ca.

Link: http://www.actuaries.ca/members/publications/2010/210049e.pdf

Contact with Questions: Jacques Tremblay, Chair, Designated Group, at jacques.tremblay@oliverwyman.com

Discipline Bulletin – Volume 16, No. 2

This Discipline Report has been prepared by the Committee on Professional Conduct to educate and inform all members of the CIA about the disciplinary process and current disciplinary activities.

Link: http://www.actuaries.ca/members/publications/2010/210046_e.pdf

Contact with Questions:
Bill Weiland, Chair, Committee on Professional Conduct at bweiland@eckler.ca

Notice of Intent – Amendment to the Practice-Specific Standards for Post-Employment Benefit Plans
  

The notice of intent for amendments to the Practice-Specific Standards for Post-Employment Benefit Plans (Part 6000) was approved by the Actuarial Standards Board on June 3, 2010.

It proposes a review and revision of Part 6000 of the Standards of Practice.

Comments on the proposed changes are invited, particularly from actuaries practicing in the post-employment benefit plans area, by August 30, 2010. Please send them, preferably in an electronic format, to Ellen Whelan at ellen.whelan@mercer.com, with a copy to Chris Fievoli at Chris.Fievoli@actuaries.ca.

Link: http://www.actuaries.ca/members/publications/2010/210035e.pdf

Contact with Questions: Ellen Whelan, Chair, Designated Group, at ellen.whelan@mercer.com

A new and exciting opportunity for CPD – Interviews in MP3 Format

Interviews with Chris Fievoli, resident actuary

The CIA is pleased to present a new opportunity for your continuing professional development (CPD): an exciting series of interviews with resident actuary Chris Fievoli, who will be discussing current topics with industry professionals. Each is approximately 30 minutes long and available in MP3 format so you can listen and learn on the go. Whether in the car, on the train, at home or at work, CIA CPD is now available in flexible formats to suit your busy schedule.

Member price: $29.00
Non-member price: $58.00

Link: To purchase the downloadable MP3 file: http://www.actuaries.ca/interviews/index_e.cfm

Contact with Questions: Alicia Rollo, CHRP, director, education and professional development, by e-mail at alicia.rollo@actuaries.ca or by phone at 613-236-8196, ext. 136

Submission to the Financial Services Commission of Ontario

The Canadian Institute of Actuaries presented its comment on the Financial Services Commission of Ontario’s Statement of Priorities.

Link: http://www.actuaries.ca/members/publications/2010/210045e.pdf

Contact with Questions:
Michel St-Germain, Chair, Member Services Council, at michel.st-germain@mercer.com

Final Standards of Practice for Revised Practice-Specific Standards for Pension Plans (Part 3000)

The attached final Standards of Practice for Revised Practice-Specific Standards for Pension Plans (Part 3000) were approved by the Actuarial Standards Board on June 3, 2010.

The effective date is December 31, 2010. Early implementation of the revised Standards is not permitted.


Actuaries practising in the pension area will need to review the final Standards carefully before completing work governed by them.


To read the final Standards of Practice for Pension Plans, please access the links below.


Links:

Memorandum: http://www.actuaries.ca/members/publications/2010/210040e.pdf

Changes to the Standards of Practice – General Standards of Practice, Subsection 1110: http://www.actuaires.ca/members/publications/2010/210041e.pdf

Standards of Practice – Practice-Specific Standards for Pension Plans (Part 3000): http://www.actuaires.ca/members/publications/2010/210043e.pdf
 

Contact with Questions: Michael Banks, Chair, Working Group on Pension-Specific Standards, at Michael_Banks@mercer.com

Guidance for Assumptions for Hypothetical Wind-Up and Solvency Valuations Update – June 2010

The most recent guidance from the Committee on Pension Plan Financial Reporting (PPFRC) regarding assumptions for hypothetical wind-up and solvency valuations was provided in an educational note dated April 13, 2010 (pdf).

The guidance contained in the April educational note as to estimated annuity purchase costs for non-indexed group annuities was based primarily on quotes provided by six insurance companies on illustrative blocks of group annuity business using pricing conditions as at December 31, 2009.


In an effort to continue to monitor group annuity pricing, the PPFRC obtained illustrative quotes on a similar basis to those obtained at December 31, 2009, but based on pricing conditions as at March 31, 2010. The illustrative non-indexed quotations at December 31, 2009 and March 31, 2010 may be summarized as follows:

Average of the three most competitive quotes
  Large purchase
Small purchase
31/12/2009 31/03/2010 31/12/2009 31/03/2010
Retirees    
Discount rate
4.51 % 4.53 % 4.52 % 4.47 %
Spread over CANSIM V39062 +0.42 % +0.54 % +0.43 % +0.48 %
Deferred vesteds
   
Discount rate
4.46 % 4.51 %
4.40 %
4.26 %
Spread over
CANSIM V39062
+0.37 % +0.52 % +0.31 % +0.27 %

For the retiree group of the large non-indexed purchase, there was an increase in the excess (spread) of the average of the discount rates for the insurers that provided the three most competitive quotes, in conjunction with the UP94@2020 mortality tables, over the yield on Government of Canada (GoC) long-term bonds (series V39062) of 12 basis points (bps). Similarly, the spread for the deferred vested members of the large purchase increased by 15 bps.

There was an increase in the spread of 5 bps for the retiree group of the small non-indexed purchase, and the spread for the deferred vested members of the small purchase decreased by 4 bps.

The illustrative quotes as at March 31, 2010 suggest that the spread between non-indexed group annuity purchase discount rates and the yields on GoC long-term bonds may have increased by 10 to 15 bps for large purchases, while the spread appeared to remain unchanged for smaller purchases.


From discussions with a few insurers, it is the PPFRC’s understanding that the group annuity market was not very active during the first quarter of 2010. The PPFRC has not been able to obtain data on a sufficient number of recent actual group annuity purchases to validate the discount rates obtained from the March 31, 2010 illustrative quotes for consistency.


Considering the lack of actual purchase data, the high volatility in group annuity purchase discount rates experienced during certain periods over the past 24 months, and the relatively modest change in the spreads that may be suggested by the March 31, 2010 illustrative quotes, the PPFRC has decided that there is not sufficient evidence at this time to warrant changing the guidance provided in the April 2010 educational note.

Contact with Questions: Michael Banks, Chair, Committee on Pension Plan Financial Reporting, at Michael_Banks@mercer.com

New survey finds that Canadians are worried about retirement – but they won’t seek help

As part of its ongoing public policy commentary, the Canadian Institute of Actuaries (CIA) has published a report based on a survey it commissioned from Ipsos Reid, which involved more than 2,000 Canadians, split between pre-retirees (adults over age 45 who are not retired) and retirees (adults over 45 who identify themselves as retired).

The goal of the research was to assess Canadians’ awareness of, planning for and management of retirement risks.


Almost half of the pre-retirees are not fully prepared for a comfortable retirement according to the survey, which was released on June 14.


The response from the media was excellent, especially in light of the meeting of finance and pension ministers in PEI to discuss changes to Canada’s retirement income system. The media was crowded with groups looking to get their messages out, and the Institute ended up breaking through the clutter to have its biggest newsday ever.


To view the entire press release and the report, Retirement Risk: Defining retirement horizons, please access the links below.

Link(s):

Report: http://www.actuaries.ca/members/publications/2010/210037e.pdf
Press release: http://www.actuaries.ca/members/publications/2010/210042e.pdf

 
Contact with Questions: Les Dandridge, Director, Communications and Public Affairs at les.dandridge@actuaries.ca

Second Revised Exposure Draft for Capitalized Value of Pension Plan Benefits for a Marriage Breakdown (Section 4300)

The above document was approved by the Actuarial Standards Board (ASB) on June 3, 2010. As a result of comments received, it contains some changes to a previous exposure draft published in December 2009. In addition, however, it contains a response to comments on the previous exposure draft, both as to the process followed by the ASB and to the assumptions recommended by the ASB. It also explains why the ASB is recommending specific assumptions, in particular the use of the BEIR (the Break Even Inflation Rate – the difference between the yields on non-indexed and real return Government of Canada Bonds) as the basis for the inflation assumption, and it responds to those who think the use of the BEIR is inappropriate.

Link: http://www.actuaries.ca/members/publications/2010/210036e.pdf

Contact with Questions: Charles McLeod, Chair, Actuarial Standards Board at charlesmcleod@sympatico.ca

Educational Note – Valuation of Group Life and Health Policy Liabilities

The Committee on Life Insurance Financial Reporting (CLIFR) has produced the attached educational note to assist actuaries in applying the Standards of Practice in the valuation of group life and health policy liabilities in life insurer financial statements prepared in accordance with generally accepted accounting principles (GAAP) in Canada.

This note, which is also intended to provide supplemental information to the Standards of Practice, draws on previous work by the committee and reflects input from a number of experts in the group life and health area.

To read the educational note, please access the link below.

Link: http://www.actuaries.ca/members/publications/2010/210034e.pdf

Contact with Questions: Dale Mathews, Chair, Committee on Life Insurance Financial Reporting, at Dale_Mathews@manulife.com

2010 CIA Election Results

Congratulations to the CIA members who were elected to the Board in the 2010 elections:

President-elect is:
James (Jim) K. Christie

New Directors are:

Stephen P. Bonnar
Sylvie Charest
William F. Chinery
Jacques Lafrance

The President-elect will serve a one-year term in that position, followed by a year as President and a further year as Immediate Past President. Directors are elected for three-year terms.

These elected members will commence their terms effective following the close of the Annual Meeting on June 30, 2010.


On behalf of all members, thank you to those candidates who let their names stand for election, but were unsuccessful.

Contact with Questions: Al Edwards, Chair, Elections Committee at 519-435-7069 or by e-mail at al.edwards@londonlife.com

 
Calendar of Events
October 21, 2010
Webcast
International Financial Reporting Standards Series: The CIA Response to Recent Developments Noon to
1.30 p.m.
(EDT)
October 26, 2010
Webcast
Noon to
1.30 p.m.
(EDT)
November 3, 2010 Pension Seminar Montréal Bonaventure Hilton Hotel Montréal, QC
November 16, 2010
Webcast
Defined Contribution (DC) Plans Noon to
1.30 p.m.
(EST)
December 8, 2010
Webcast
International Financial Reporting Standards Series: Canadian Standards Noon to
1.30 p.m.
(EST)
June 29-30, 2011 Annual Meeting The Westin Ottawa Ottawa, ON

Additional information on all CIA meetings can be obtained at:
www.actuaries.ca/meetings/calendar_of_meetings_e.cfm, or by contacting Nancy Jenkinson at 613-236-8196, ext.104, or nancy.jenkinson@actuaries.ca.

For information on CIA webcasts, visit http://www.actuaries.ca/webcasts/index_e.cfm.
 
Board and Council Updates
Board

The Board approved the membership of the Member Services Council for 2010–2011, effective July 1, 2010, as follows: Richard Bisson, Julie Chambers, Sylvie Charest, John Dark, Marcia Gallos, Marc-André Melançon, Michel St-Germain (Chair), Marcus Robertson, Cathy Shum-Adams, Christopher Townsend and Gary Walters (Vice-chair).

Note: Bruce Langstroth’s term ended on June 30, 2010.

The Board approved the membership of the Eligibility and Education Council for 2010–2011, effective July 1, 2010, as follows: Stephen Bonnar, Trevor Cartlidge, Dave Dickson (Chair), Angelita Graham, John Have, Neville Henderson, James Lewis, David Oakden, Paul Winokur and Jason Vary.

Note: Barb Addie and Mike Smith finished their terms effective June 30, 2010. The new member being approved was Angelita Graham.

The Board approved the membership of the Practice Council for 2010–2011, effective July 1, 2010, as follows: Alan Exley, Simon Curtis, Steve Easson, Ty Faulds (Chair), Jacqueline Friedland, Derek Gerard, Bruce Langstroth, Marie-Hélène Malenfant, Daniel Pellerin, Phil Rivard (Vice-chair) and Lesley Thomson. 

Note: Pat Johnston, Ralph Ovsec and Josephine Robinson finished their terms effective June 30, 2010. The new members being approved were Alan Exley, Simon Curtis and Bruce Langstroth.

The Board approved the membership of the Committee on Professional Conduct for 2010–2011, effective July 1, 2010, as follows: Wayne Berney (Vice-chair), Guy Breton, Douglas Brooks, Luc Farmer, Normand Gendron, Jessie Shaw Gmeiner, Bob Howard (ex officio), Danielle Lamarche, Jim McCarter, Liam McFarlane (secretary), Jim Murta, John Tarrel, William Weiland (Chair) and Ashley Witts.

Note: Randy Dutka resigned from the Committee on Professional Conduct, effective March 30, 2010. Mike Hale, Bob Baldwin and Michel St-Germain finished their terms effective June 30, 2010. Ashley Witts’ term finishes on December 31, 2010. Bob Howard is the new ex officio member effective July 1, 2010.

In accordance with Bylaw 9.01(2), the Tribunal Panel was appointed for 2010–2011, effective July 1, 2010, as follows: Nicholas Bauer, Shiraz Bharmal (Chair), Martin Brown, Marc Fernet, Neville Henderson, Daniel Murphy, J. Edward Nixon (Vice-chair), Owen O’Neil, James Paterson, Philip Pothier, Allan Shapira, David Short, William Solomon, Monique Tremblay, Hugh White and Nancy Yake.

Note: Richard Bisson and James A. Brierley finished their terms effective June 30, 2010. The new members being approved were David Short, Monique Tremblay and Nancy Yake.

The Board approved the appointment of Jim Doherty as the Vice-chair of the Committee on International Relations, effective immediately.

The Board approved the appointment of Ben Marshall as the CIA representative on the IAA Education Committee, effective immediately.

Anthony Benjamin, Rob Brown, Micheline Dionne, Neil Duffy, Chris Fievoli, Bob Howard (Chair), Manuel Monteiro, Céline Plante and Fred Vettese were appointed the Task Force on Pension Vision, reporting to the Board, effective June 10, 2010 and terminating on August 31, 2010. Jean-Claude Ménard participated as an observer.

Paul Della Penna, John Christie, James Christie, John Dark, Leslie Lohmann, Moi-Yin Ng, Catherine Robertson, Marc Tardif and Ashley Witts have resigned from the Committee on Rules of Professional Conduct.

Eligibility and Education Council

Danielle Harrison and Mei-Hsuan Chao have been confirmed as members of the Property and Casualty Subcommittee of the Organizing Committee for the Joint Appointed Actuary Seminar. Germain Denoncourt has resigned from the subcommittee.

Sophie Cournoyer has been appointed Chair, and Melissa Kirshenbaum Vice-chair, of the Organizing Committee for the Pension Seminar. Michael Banks, Anne-Marie Lainesse and Deborah McMillan have been appointed members of the committee.

The Webcast Committee and the Annual and General Meeting Organizing Committee and subcommittees have been disbanded with thanks.

The membership of the Committee on the Application of Rules and Standards (CARS) has been restructured as follows:
  • Chair: Dave Dickson
  • Members: Roger Allen, Chair of the Subcommittee on CPD Compliance; Louis-Georges Simard, Chair of the 2009 Pension Review Task Force, and David Short and Roderick Sproule, both members of the 2009 Pension Review Task Force.
Richard Bisson, Liam McFarlane, Owen O’Neil, M. David Brown, René Delsanne, K. Paul Duxbury, D. Cameron Hunter, J. Chris Kutney, John McKellar, Peter Morse, Thomas Schinbein, William Solomon and Cecil Van Bolhuis have resigned from the committee.

Rémi Villeneuve has been appointed Vice-chair of the Committee on Eligibility.

Claudette Cantin has resigned from the Organizing Committee for the Joint Appointed Actuary Seminar.

Amy Pun, John Dark, Peter Muirhead, Bruce Jones and Ben Marshall have been appointed members of the Accreditation Committee. Harry Panjer has resigned as its Chair, and Mary Millard, Jean-Louis Massé, B. John Manistre, René Delsanne, James Christie and Allan Brender have resigned from it.

Amy Pun has been appointed Vice-chair of the Committee on Continuing Education. Ralph Ovsec, Lynn Grenier-Lew, Gary Walters, Mike Smith, Mariève Tétreault and Nathalie Bégin have been appointed members of the committee, and Frank Grossman, Nathalie Rahman, Frank Reynolds, Graham Rogers, Evelyn Somer and Guy Poliquin have resigned from it.

Member Services Council

Marc-André Belzil has been appointed Chair of the Research Committee, effective October 1, 2010.

Julie Chambers has been appointed Chair of the Annuitant Experience Subcommittee of the Research Committee, effective immediately. Roland Johnson has been appointed a member of the subcommittee, effective immediately.

Stephen W.I. Cheng has been appointed Vice-chair of the Communications Committee, effective immediately.

For information purposes only:

On June 28, 2010, the Board approved the following motion:
That the Board approves the membership of the Member Services Council for 2010–2011, effective July 1, 2010, as follows: Richard Bisson, Julie Chambers, Sylvie Charest, John Dark, Marcia Gallos, Marc-André Melançon, Michel St-Germain (Chair), Marcus Robertson, Cathy Shum-Adams, Christopher Townsend and Gary Walters (Vice-chair).

Please Note: Richard Bisson, Sylvie Charest and John Dark are Board members.

Annie Girard has resigned as a member of the Annuitant Experience Subcommittee of the Research Committee, effective immediately.

Practice Council

Pierre Dionne has been appointed Chair, and Isabelle Périgny Vice-chair, of the Committee on Property and Casualty Insurance Financial Reporting.

A Task Force on Pension and Post-retirement Benefit Accounting Discount Rates has been created with Gavin Benjamin as Chair.