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

Canadian Institute of Actuaries/Institut canadien des actuaires

January 2011
Your Institute

By Micheline Dionne, FCIA

It was with more than a little interest that I followed the recent e-mail exchanges dealing with the new Standards of Practice for Capitalized Value of Pension Plan Benefits for a Marriage Breakdown. These exchanges are a continuation of numerous and sometimes heated discussions over the years. The CIA Board of Directors has also been following this matter closely, inquiring about the steps that have been taken and expressing the hope that all parties do everything they can to uphold the interests of the public.

But what has really happened? Logic dictates that actuaries with differing viewpoints calmly exchange ideas on the fundamental questions, substantiate their positions and reach an understanding on the best approach to take in the public interest. Unfortunately, this is not always how it works. And we must now acknowledge that the latest Standards of Practice have not been unanimously embraced. Some have said that there weren’t enough discussions between the Actuarial Standards Board (ASB) and practitioners. And yet the file has been studied by the ASB for nearly five years—this after being studied by the Practice Standards Council for a number of years before the founding of the ASB.


One would be hard-pressed, then, to conclude that there haven’t been enough discussions. On the contrary: there may have been too many discussions, if such a thing is possible. Ultimately, it seems evident that it’s not in anybody’s interest to take so long to develop a Standard of Practice. At the heart of the matter lies the quality of the discussions. How do we get a healthy exchange of opinions? With the help of a strengthened due process? Perhaps (and I applaud the ASB’s plan to review its due process), but I highly doubt that this takes the place of good will on the sides engaged in such a debate. At the extreme, when both sides are open-minded, the wording of the due process takes on lesser, if not incidental, importance.


Some say that a Standard of Practice cannot be adopted without the approval of the majority of practitioners working in the area concerned. In the past, however, there have been Standards of Practice that failed to garner such approval. One such example was the adoption of liabilities discounting in property and casualty insurance. At first, P&C insurance actuaries would hear nothing of it, whereas life insurance and pension plan actuaries agreed it made no sense to turn a deaf ear to it. Even today there are many P&C insurance actuaries outside Canada who fail to see the usefulness in discounting their liabilities. But in Canada, once the culture shock had passed, this Standard of Practice was accepted, and there has been no talk of reversing course. In other words, this Standard of Practice has stood the test of time.


More and more, actuaries have to explain their techniques and assumptions, not just to their colleagues but to Canadians in general. If actuaries are unable to explain themselves to their colleagues and to find a middle ground in related practice areas, then what chance will they have to respond to the public’s expectations? This strikes me, then, as a healthy exercise and a crucial dialogue, and only time will tell if the new Standards of Practice fit the bill, once all the dust has settled.


So it’s too early to condemn the ASB, but not too early to stress the necessity to engage in a dialogue based on good will. In this regard, I am especially encouraged by the creation of a designated group bringing together actuarial evidence practitioners and the ASB to review the other Standards of Practice affecting this area. The fact that both groups are showing a willingness to work together is cause for hope. We mustn’t forget: our profession stands out through our ability to get to the bottom of things and replace impressions with facts.


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

Micheline Dionne, FCIA, is President of the Canadian Institute of Actuaries.
 
Spotlight


By Marc-André Belzil, FCIA


The CIA’s Research Committee is overseeing just over 15 research projects in such areas as individual life insurance, individual annuities, segregated funds, pension plans, group insurance and living benefits. Several are expected to be finalized and approved in 2011, including:
  • Individual Annuitant Mortality Study for 2005–2006 (Q1);
  • Individual Life Mortality Study for 2008–2009 (Q2);
  • Critical Illness Research-based Morbidity Study (Q1);
  • Private Pension Plans Mortality Study (Q4);
  • CPP/QPP Mortality Study—Phase 2 (Q1);
  • Group LTD Termination Rates Study (Q2).
Also, new projects are in the pipeline. The Individual Life Experience Subcommittee recently sent a submission request for a study on lapse rates of T10 at renewal. A submission for the project on development of guidance on going concern margins in actuarial reports for registered pension plans will be prepared shortly. In addition, our committee has just approved the launch of a study on workers’ compensation for occupational diseases, which should be useful in light of the revised Standards of Practice with regard to valuation. We believe these projects will be of benefit to CIA members and the profession at large.

The Research Committee is also sponsoring activities in partnership with other organizations. For example, we have teamed up with the International Actuarial Association (IAA) to help produce a monograph on discount rate issues. Another good example of partnership involves the funding of the second survey on retirement risk conducted by Ipsos Reid, for which the CIA leveraged work by the Society of Actuaries (SOA) in the U.S. The results of the first survey were released in 2010 and garnered some of the most intense media coverage that the CIA has ever known, as well as a great deal of interest at the highest levels of government.

We are always on the lookout for new project ideas. In fact, we have nearly 25 ideas that came from you. Research Committee members will be following up with those who submitted them to gain a better understanding of the specific needs relating to the activity sector in question. Some of these ideas will eventually form the basis of research projects that will benefit the profession as a whole.


To accomplish all of this, the support of the research subcommittees and their volunteers is of the utmost importance. To that end, our committee is seeking a new chair for the Segregated Fund Experience Subcommittee. We are also looking to set up a Property & Casualty Research Subcommittee, and will be in touch with a number of you very soon in the hopes of recruiting volunteers for it.


If you’d like to contribute to one of our dynamic research subcommittees, if you have questions on our ongoing projects or if you’d like to discuss ideas for other projects, please feel free to contact me at Mbelzil@rgare.ca. I would be pleased to talk with you.

Marc-André Belzil, FCIA, is the Chair of the Research Committee.
 
 
MOVERS AND SHAKERS

We are in the depths of winter, yet it is never too soon to start thinking ahead to warmer weather and how it can help you grow your own organic (i.e., chemical-free) food.

A workshop on starting an organic vegetable garden takes place in Toronto next month, but for those who cannot attend here are some tips on how you can go green in the kitchen later this year.

Why grow an organic vegetable garden?

The oldest method of cultivation, organic gardening is good for you as home-grown food has none of the artificial preservatives added by supermarkets, so you can be sure of what you and your family are eating.
 

It is also good for the environment, as the increasing popularity of organic produce means fewer toxic and long-lasting chemicals are poured into the soil and water table. Experts say that all the problems common to gardening, such as diseases and pests, can be solved naturally and without chemicals.

Organic growing does not have to be confined to those with green space to spare, either: city residents can set up a rooftop plot or even a balcony garden in raised beds.

How to start
  • The key ingredient for successful organic vegetables is well cared-for soil, so start creating a compost heap as soon as the weather permits and then spread it on the soil in a layer at least two inches thick. Leave it for three weeks until planting.
  • For vegetables, choose those that are suitable for your region and are known to resist disease and pests—seed catalogues can offer such information. It is often advisable to start growing the seeds indoors, four to six weeks before the threat of the last frost of winter has passed. They should be planted in soil and left in an area with good lighting, and not be over-watered. The soil should be kept at room temperature, and once there is no danger of any more frost and they have grown two true leaves in addition to their sprouting leaves, they can be transferred into biodegradable containers and planted in the garden soil a few inches apart. Put mulch around the base to preserve heat through chilly evenings.
  • Peas, spinach are broccoli can be planted once the snow thaws, but frost will kill tomatoes, peppers and squash.
  • By avoiding the use of pesticides, you can attract beneficial insects to the garden, and removing weeds will help restrict the number of pests.
  • Towards the end of the fall, once you have harvested the last vegetables, cut the plants back so they are about six inches tall. The cover them with a thick layer of straw or wood chips to protect them from Canada’s winter temperatures.

Where to learn more

  • Information for this article came from www.helpfulgardener.com, www.vegetablegardeningguru.com and www.ehow.com.
  • For advice on growing vegetables in urban areas, visit www.cityfarmer.info.
  • Canadian Organic Growers, which has a membership including farmers, gardeners, processors, retailers, educators, policymakers and consumers, campaigns for sustainable organic stewardship of land, food and fibre.
  • The Government of Canada and YMCA Vancouver, among others, supported a detailed guide to growing organic food in a community garden.
  • On Earth Day in 2009 the Government of Ontario backed the growing popularity of organic gardening by banning cosmetic pesticides, and set up a website explaining why.
 
Institute News


By Michel C. Simard

As I write these words, I realize that it has already been three weeks since I took up my duties at the helm of the CIA Secretariat.

I would like to take this opportunity to extend my warm regards to our members, volunteers and partners, and to tell those of you whom I have not yet had the chance to meet that I am eager to make your acquaintance.

It is with pride and enthusiasm that I look forward to working with you and the CIA’s dedicated staff to achieve the objectives of a profession known for its unique expertise, high quality standards and avowed willingness to see beyond risk.

I must tell you that until quite recently, my knowledge of your profession was limited to some dictionary and website definitions:

"Actuaries specialize in statistical application, mainly as it relates to calculating probabilities in financial and insurance operations. They are charged with producing and employing economic models aimed at predicting various changes in data: interest rates, GDP growth, changes in fertility/morbidity rates . . ."

But I instinctively realized that actuaries’ area of practice is extremely broad, and that at a time when most of our social programs are being called into question (sustainability of public pension plans and public health care, precarious state of defined benefit pension plans), your expertise and your commitment to promoting the public interest are not only necessary but essential to the discourse aimed at ensuring fair and informed decisions on these important issues.

Some of you will tell me that the actuarial profession is grossly misunderstood and that scores of Canadians are unaware of its very existence. Paradoxically, the problems stemming from population aging and the myriad changes in our industrial structure affect them directly.

For my part, I feel that recognition of Canada’s actuarial profession will go hand in hand with Canadians’ interest in these issues. So, if we’re ready to deliver the goods, not only by defining the risks but by clearly identifying possible solutions most likely to serve the public interest, the role of actuary in Canada will be afforded ample recognition, and for all the right reasons.

Meanwhile, I am working very hard to become familiar with the set of challenges that the CIA is dealing with, whether it be accreditation, Standards of Practice or continuing education, to only name a few. I still have numerous acronyms to memorize and concepts to learn. I am counting on your cooperation, and at times your indulgence, in order to hasten the learning process and to be able to make a significant contribution to the success of the CIA. Thank you in advance.

Michel C. Simard is Executive Director of the Canadian Institute of Actuaries Secretariat.

 

By Roger Allen, FCIA, and Angelita Graham, FCIA

As members of the Canadian Institute of Actuaries (CIA), you might be familiar with the Institute’s continuing professional development (CPD) requirements, having filed a statement of compliance for each of the last two years. The Society of Actuaries (SOA) has adopted its own CPD Requirement, effective January 1, 2009, and its members will be required to certify compliance for the first time as of December 31, 2010. This includes CIA members who are also SOA members, which may result in additional work and/or reporting for some CIA members, in particular ASAs, new Fellows and those claiming an exemption from the CIA CPD Qualification Standard (QS).

This article looks at how the SOA CPD Requirement may impact CIA members.

Who is subject to the SOA CPD Requirement?

Effective January 1, 2009, all SOA Members, including those who are also CIA members, are subject to the SOA CPD Requirement upon attainment of their first SOA credential, usually the ASA designation. However, members are not required to begin earning CPD credits until the calendar year following attainment of their first credential and are not subject to reporting until the end of the second full calendar year following attainment of their first credential. For example, if a member qualifies as an ASA in 2011, he will first certify compliance as of December 31, 2013.

With the exception of retired members who are eligible for waiver of dues, an SOA member who elects not to comply with the SOA CPD Requirement will be shown as non-compliant on the SOA online directory, and must inform any person relying on his actuarial expertise, such as his employer, that he has not met the SOA CPD Requirement. Members who comply will be shown as compliant.

Retired members who are eligible for waiver of dues will be shown as retired on the SOA online directory and will not be required to attest to compliance under the SOA CPD Requirement unless they choose otherwise.

What is the SOA CPD Requirement?

As is the case with the CIA, at the end of each calendar year, members of the SOA will be required to attest to CPD compliance over a two-year rolling cycle. The first two-year cycle commenced on January 1, 2009 and ends on December 31, 2010.

The SOA recommends that members, where possible, comply with the SOA CPD Requirement by meeting the CPD basic requirements of another actuarial organization (approved by the SOA) of which they are a member. The CIA is one of the approved actuarial organizations under the alternative compliance provision. As a result, members of the CIA who are also members of the SOA may elect to meet the requirements of the CIA CPD standards as a means of complying with the SOA requirement. However, there may be cases where a member is considered to be in compliance with the CIA CPD standards but is not in compliance with the SOA CPD Requirement. See How am I impacted? below.

For SOA members who are not subject to, or can elect an exemption from meeting, an alternative compliance standard, the SOA has defined a basic set of requirements those SOA members can follow:

  • Complete 60 units of professional development every two years ending December 31. One unit is defined as 50 minutes, and a full hour can be converted to CPD units at the rate of 1.2 units per hour. Credit will be given for fractional hours;
  • At least 30 units per cycle must be earned in structured activities. At least 7.5 of those units must be from a source other than your employer;
  • At least 45 units per cycle must be in job-relevant skills (structured or self-study). At least three of the 45 must be earned as structured credits in professionalism;
  • No more than 15 units per cycle may be in business and management skills (structured or self-study);
  • FSA examinations that are considered an "effective attempt" (score >0) earn job-relevant structured CPD credit for the year in which the examination was taken; and
  • Successful completion of FSA modules also earn job-relevant structured CPD credit for the year in which the module is completed.

What are the main differences between SOA CPD and CIA CPD requirements?

Although CIA members are allowed to attest to compliance with the SOA CPD Requirement by meeting the CIA CPD standards, there are some notable differences between the two standards that members need to be mindful of. These include:

  • The SOA CPD does not recognize exemptions of any kind from CPD compliance, including ASAs writing exams;
  • The SOA CPD allows specific job-relevant structured CPD for effective attempts at examinations and successful completion of modules;
  • The definition of structured CPD credits may differ in some circumstances between the CIA and the SOA. For example, unlike the CIA, informal meetings between colleagues are not considered structured CPD credits under the SOA CPD standards;
  • The SOA CPD requires a minimum of 50 hours every two years whereas the CIA requires a minimum of 100 hours every two years; and
  • Unlike the CIA, where some members (those acting in a reserved role1) are required to file their CPD activities log with the Institute, there is no such requirement under the SOA. Under the SOA CPD Requirement, members are not required to file a log of their CPD activities with the society. However, members need to make sure they have their log of activities in case they are audited. Failure of an audit can result in disciplinary actions.
How am I impacted?

While most CIA members should easily meet the SOA CPD Requirement, there are a few pockets of the membership who may not. These members might be required to do additional work and/or reporting to ensure that they are in compliance with the SOA CPD standards:

  • An ASA who is also a member of the CIA and is actively writing exams will need to meet the SOA 50 hours minimum basic requirements. He cannot attest to compliance under the SOA CPD standards by stating that he complied with the CIA’s CPD standard if his compliance was by exemption. However, in meeting the SOA CPD Requirement the ASA will be able to count exam credits, module credits and time spent studying as well as all the usual activities that can be used for CPD purposes towards meeting his requirement;
  • The same holds true for new FCIAs. While under the CIA standard it is sufficient to indicate as a means of compliance that you have written an exam in the last two years, new FCIAs are expected to keep a log of their CPD activities in those two years following qualification. This will not be acceptable under the SOA CPD Requirement;
  • Retired FCIAs who are not eligible for waiver of dues as defined by the SOA will also be required to comply with the SOA CPD Requirement. Failure to do so would result in these members being shown as non-compliant. Those retired FCIA members who are classified by the SOA as eligible for waiver of dues would be shown as retired on the SOA’s online directory; and
  • Any CIA member that receives an exemption from compliance with the CIA’s CPD standards will need to comply with the SOA CPD Requirement. Otherwise they will be shown as non-complaint on the SOA online directory.

The SOA notes that any member of the CIA may elect to meet the SOA CPD Requirement by following the provisions of the CIA CPD standard or they may elect to follow the basic provisions (the 50-hour requirement outlined above), or any other CPD standard for which they may be eligible (e.g., the UKAP CPD Scheme).

In general, all members are subject to an audit of their records. If selected for audit a member who complies with the CIA CPD QS will be asked to show how they met the minimum 100 hours. Members’ records should show the amount of time spent in self-study, webcasts, meetings and seminars attended, what type of credit was earned and how many hours or units of credit were earned. This means that CIA members not acting in a reserved role and who do not track their 100 hours minimum under the CIA’s CPD QS, using the online tool provided by the CIA, should ensure that they keep proper records of their CPD activities in case of an audit by the SOA.

What do I need to do?

  • To attest to compliance with the SOA CPD Requirement follow these simple instructions:
  • Go to the SOA Member Directory;
  • Enter your user name and password;
  • Once logged in, click the button on the bottom right corner, SOA CPD Attestation;
  • You are now on the View CPD Attestation page. Click on the Update Info button at the bottom of the page;
  • If you have fulfilled the SOA CPD Requirement
    • Click on the first button ("I certify that I have fulfilled the SOA Continuing Professional Development Requirement...") certifying that you have fulfilled the requirement;
    • Then, click on at least one of the next five buttons to identify your method of compliance; and
    • If you met the requirement by multiple methods, click all that apply.
  • If you have not fulfilled the SOA CPD Requirement
    • Click the last radio button, certifying that you have not fulfilled the SOA CPD Requirement; and
  • Click the Save button and you’re done.

Technically, for those FCIA who are attesting to compliance under the SOA by virtue of satisfying the CIA CPD minimum requirements, you shouldn’t attest until you have filed your CIA compliance statement beginning on January 1, 2011, or have met another of the SOA requirement alternatives. The results will not be published until March 1, 2011 so if you have met your minimum CIA CPD requirements for the 2009–2010 period, including the inside limits, you could complete the SOA form with the expectation that your CIA compliance will be met.

Resources

The SOA has put in a number of resources to educate members on the new SOA CPD Requirement. Below are some of the resource materials. You may also call the SOA customer service number with any additional questions you may have: 1-888-697-3900.

SOA CPD Requirement: http://www.soa.org/files/pdf/current-cpd-req.pdf
Fact sheet about complying with the SOA CPD Requirement by following the CIA CPD standard: http://www.soa.org/files/pdf/cpd-cia-qualification-standard.pdf
An article on attestation: http://www.soa.org/library/newsletters/the-actuary-magazine/2010/june/act-2010-vol7-iss3-kessler.pdf
Frequently Asked Questions: http://www.soa.org/files/pdf/cpd-faqs.pdf

Roger Allen, FCIA, is Chair of the Continuing Professional Development Compliance Subcommittee of the Committee on Continuing Education. Angelita Graham, FCIA, is Chair of the Committee on Continuing Education.


 1 Reserved role is a role that legally requires an FCIA, usually pursuant to provincial or federal legislation or regulation.
 


Years of service to the financial industry in Canada have been marked with a lifetime achievement award for John Solursh, the first chair of the Actuarial Standards Oversight Council.

Mr. Solursh received the 2010 Benefits Canada Award at the fourth annual Benefits Canada Awards Gala for his work on pension law, contributing to landmark cases that have affected thousands of Canadians, and writing and speaking around the world.

The 65-year-old—the only lawyer to sit on the ASOC—said: "It’s a great personal honour. But it’s due in large part to the people I have worked with, who are so bright and pleasant to work alongside in an area of social and economic importance."


Mr. Solursh, who graduated with the gold medal from the University of Toronto and was called to the bar in 1970, has risen to become a partner emeritus at Blake, Cassels & Graydon in Toronto, but is also Chair of the Financial Services Commission of Ontario (FSCO) and the Financial Services Tribunal. He has held numerous other key positions, including serving as Chair of the Canadian Bar Association (Ontario) Pension and Benefits Section’s executive, a member of the International Pension and Employee Benefits Lawyers Association’s executive, and an instructor in the Ontario bar admissions course. He is cited in The Best Lawyers in Canada 2010, Canadian Who’s Who and Guide to the World’s Leading Labour and Employment Lawyers, among other publications.


Although he says he is largely retired from his law practice, Mr. Solursh is still very active with the ASOC and FSCO, and he warns that the retirement area will be a challenging one for Canadian financial professionals: "It is important that the public and private sectors keep working hard on solutions in the public interest. The actuarial profession in particular has made a terrific contribution to the discussion. I enjoy participating in the process.


"The ASOC, utilizing the diverse backgrounds and areas of experience of its members, has made substantial progress since it was established to provide oversight to the ASB. We strongly support the timely and thorough review and development of actuarial standards and have been concerned that the members of the ASB, who devote considerable time and effort as volunteers, have access to adequate resources including research to fulfil their public interest mandate. We are very appreciative of the responsiveness of the CIA."


Mr. Solursh, a father of three who has been married since 1966, said he would miss working with such interesting people. He added: "Those of us involved as non-actuaries in the pension and benefits field make the occasional joke about actuaries—not to deny that there are far more lawyer jokes—but they always challenge you intellectually. This has been a fun part of the practice."

 


The Casualty Actuarial Society is once again accepting applications for its scholarship program for college students pursuing a career in actuarial science. The CAS Trust Scholarship program, funded by donations to the CAS Trust, will award up to three $2,000 scholarships to deserving students for the 2011–2012 academic year.

To be eligible, applicants must be a permanent resident of the U.S. or Canada, or have a permanent resident visa, and be admitted as a full-time student to a U.S. or Canadian educational institution. Applicants must have demonstrated high scholastic achievement and a strong interest in the casualty actuarial profession, and must also have taken at least one actuarial exam prior to March 1, 2011.

Recommendations, transcripts, actuarial exam results, work experience, and written essays will all be considered in selecting the award recipients. Additional details and applications are available online at http://www.casact.org/academic/index.cfm?fa=scholarship. Applications are due by March 1, 2011 and winners will be notified in late May.

The intent of the scholarships is to further students' interest in the property/casualty actuarial profession and to encourage pursuit of the FCAS designation. Established in 1979, the Casualty Actuarial Society Trust affords CAS members and others an income tax deduction for funds contributed and used for scientific, literary, or educational purposes.


For questions, comments, or to submit an application please contact Megan O’Neill, CAS Communications Coordinator, at moneill@casact.org.
 
In order to keep our members informed on events associated with International Financial Reporting Standards (IFRS), the (e)bulletin will feature periodic updates outlining any recent activity.

Exposure Draft – Insurance Contracts

As you are likely aware, the comment period for the International Accounting Standards Board (IASB) Exposure Draft on Insurance Contracts ended on November 30, 2010. A copy of the CIA’s submission can be found on our website: http://www.actuaries.ca/members/publications/2011/211004e.pdf. The exposure draft itself, along with all comments received by the IASB, can be found on their website as well. A total of 248 comment letters were received.

IASB Meeting

The IASB resumed meetings in January, with the latest one taking place from January 18–21 in London. On January 19, a joint education session of the IASB and FASB was held, discussing the exposure draft in more detail. Different models for determination of the discount rate were presented, including:
  • EDAR (Economic Default Adjusted Rate);
  • Reference Asset Portfolio Rate; and
  • Asset-linked Discount Rate (of which CALM is a version).
Copies of the presentations are available at the IASB website:
http://www.ifrs.org/Meetings/IASB+Meeting+January+2011.htm.

Questions?

If you have questions on any information provided in this article, please contact Chris Fievoli, the CIA’s resident actuary (chris.fievoli@actuaries.ca), who will ensure that your inquiry reaches the appropriate person to respond.


 
Wallace R. Joyce, FCIA (1965)
Chris Kutney, FCIA (1983)
John C. (Jock) Maynard, FCIA (1965), the CIA's ninth President
Yvan Pouliot, FCIA (1965)
 
THIS MONTH'S PUBLICATIONS
Invitation to the 2011 ERM Symposium

Taking place from March 14-16, 2011, at the Swissôtel, Chicago, IL, the ninth annual ERM Symposium brings together enterprise risk management (ERM) knowledge from a variety of industries, and aims to build a strong cross-disciplinary framework for senior management to create systematic value and competitive advantage through effective managing of risk and capital.

This year’s premier global conference on ERM will offer:
  • Three general sessions and more than 30 concurrent sessions featuring top risk management experts;
  • Seminars on hot ERM issues;
  • Networking opportunities to renew and expand your list of ERM contacts;
  • A scientific program showcasing top brainpower in new applied research in ERM;
  • A track of sessions featuring academics presenting ERM research from leading universities; and
  • Exhibitors demonstrating their ERM services and knowledge.

Online registration is now open at: http://www.ermsymposium.org/2011/index.php

Link: http://www.ermsymposium.org/2011/index.php
 
Contact with Questions: Casualty Actuarial Society at office@casact.org

Submission to the Ontario Ministry of Finance


The Canadian Institute of Actuaries presented its comments on the document Securing Our Retirement Future: Consulting with Ontarians on Canada's Retirement Income System.

Link: http://www.actuaries.ca/members/publications/2010/210093e.pdf
 
Contact with Questions: Michel St-Germain, Chair, Member Services Council at michel.st-germain@mercer.com

Public Position on Self-Insured LTD Plans

The CIA has established a public position on self-insured long-term disability plans.

Benefit security is of vital importance to disabled employees and the CIA’s public position outlines the profession’s thinking on this issue. We offer suggestions as to how governments can take positive steps to mitigate the impact of sponsor bankruptcy on plan members.

Plans are being drawn up to hold a webcast on the position in mid-January.

Link: http://www.actuaries.ca/advocacy/self-insured_disability_e.cfm
 
Contact with Questions: Chris Fievoli, resident actuary, at chris.fievoli@actuaries.ca
 

Report on the CIA Survey of C-1 Provisions of Life and Health Insurance Organizations in Canada – 2009 Fiscal Year-End

This report documents the results of the Canadian Institute of Actuaries (CIA) Survey of C-1 Provisions for Life and Health Insurance Organizations in Canada as at fiscal year-end 2009. Westbay Research prepared the report for the CIA’s Committee on Investment Practice using survey data collected in June/July 2010.

The report is available in the Members Section of the CIA website. To access this draft report, please log into the section and click on Organization on the top menu bar. Select Practice Council and under Committees and Task Forces select Committee on Investment Practice. The link to the draft report is under Reports and Documents near the bottom of the page.

Contact with Questions: Jonathan Hede, Chair, Committee on Investment Practice at jonathan.hede@nexusrisk.com
 

The Canadian Institute of Actuaries calls on all governments to provide Canadians with the pension reform they deserve

The Canadian Institute of Actuaries (CIA) regrets that expectations for today’s meeting of finance ministers in Kananaskis were not achieved. As experts in pension issues, the actuarial profession remains committed to working with provincial, territorial and federal governments to find common ground for real and meaningful reform in Canada’s pension system.

To view the entire press release, please access the link below.

Link: http://www.actuaries.ca/members/publications/2010/210096e.pdf
 
Contact with Questions: Les Dandridge, director, communications and public affairs at les.dandridge@actuaries.ca
 

Educational Note – Calculation of Incremental Cost on a Hypothetical Wind-Up or Solvency Basis

The Actuarial Standards Board published the final Standards of Practice for Revised Practice-Specific Standards for Pension Plans (Part 3000) on June 14, 2010. The revised Standards of Practice, which come into effect on December 31, 2010, require, with limited exceptions, an external user report on the funded status or funding of a pension plan to report the incremental cost on a hypothetical wind-up or solvency basis. This educational note is intended to assist actuaries in the calculation of a pension plan’s incremental cost on a hypothetical wind-up or solvency basis.


An original draft educational note on the same subject was issued on April 9, 2009 and a revised draft educational note was issued on April 12, 2010. Several changes have been incorporated in the final educational note, considering comments received.

Link: http://www.actuaires.ca/members/publications/2010/210095e.pdf
 
Contact with Questions: Gavin Benjamin, Chair, Committee on Pension Plan Financial Reporting, at gavin.benjamin@towerswatson.com
 

Educational Note – Determination of Best Estimate Discount Rates for Going Concern Funding Valuations

This educational note is intended to assist actuaries in the selection of an appropriate best estimate discount rate for a going concern funding valuation of a pension plan.

A draft educational note on the same subject was issued on June 16, 2009. Standards of Practice for Revised Practice-Specific Standards for Pension Plans (Part 3000) (the "final Standards") were published by the Actuarial Standards Board on June 14, 2010 to be effective December 31, 2010. This educational note reflects relevant changes in the final Standards and comments received on the draft educational note.

Link: http://www.actuaries.ca/members/publications/2010/210094e.pdf
 
Contact with Questions: Gavin Benjamin, Chair, Committee on Pension Plan Financial Reporting, at gavin.benjamin@towerswatson.com
 

Submission to the IASB – Exposure Draft on Insurance Contracts

The Canadian Institute of Actuaries presented its comments on the International Accounting Standards Board Exposure Draft on Insurance Contracts.

 
Contact with Questions: Lesley Thomson, Chair, Task Force on International Accounting and Actuarial Standards (Insurance) at lesley.thomson@sunlife.com

Appointment of New CIA Executive Director


The Board of Directors of the Canadian Institute of Actuaries (CIA) is pleased to announce the appointment of Michel C. Simard to the position of Executive Director.

A seasoned lawyer and manager, M. Simard brings to the CIA extensive experience acquired in federal ministerial offices and at a national professional association in the health sector. In addition, he spent many years at the head of a national charitable organization and a federal administrative tribunal. He has also worked in the academic field, dividing his time between consulting and teaching.

An involved citizen, he has made his mark in Québec’s Outaouais region through his work with community and sports groups, and has coordinated the Canadian Bar Association’s education program on charters of rights and freedoms aimed at secondary students in that region.


M. Simard received the Commemorative Medal of the 125th Anniversary of the Confederation of Canada for his contribution to the democratization of Canadian philanthropy, and the Citizenship and Immigration Deputy Minister’s Achievement Award for Service Excellence. He holds a Bachelor of Law degree from the Université Laval and a Postgraduate Diploma in International Administration from the École nationale d’administration publique (ENAP).

Originally from Québec City, M. Simard has lived in the National Capital Region for 30 years. He is married to Isabelle Michaud. They have two teenage children, Jacob and Raphaël.


Contact with Questions: Lynn Blackburn, Interim Executive Director, by e-mail at lynn.blackburn@actuaries.ca or by phone at (613) 236-8196, ext. 117
 

Submission to the Department of Finance Canada

The Canadian Institute of Actuaries presented its comments on the federal minister’s review of legislation governing federally regulated financial institutions.

Link: http://www.actuaries.ca/members/publications/2010/210087e.pdf
 
Contact with Questions: Tyrone Faulds, Chair, Practice Council, at Ty.Faulds@londonlife.com
 

International Actuarial Association Section Membership Dues

Below is a link to the 2011 IAA section dues subscription form. Please note that the CIA is collecting membership dues on behalf of all IAA sections: AFIR, ASTIN, AWB, IAAHS, IACA, Life and PBSS.

Anyone wishing to join any of the IAA sections must complete the form and submit the appropriate amount in dues. If you have already paid your section dues for this year through another association, please do not submit them again. You may contact Lidia Frassine (see below) to ensure that your payment has been recorded.

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

Contact with Questions: Lidia Frassine (613) 236-8196, ext. 102 or by e-mail at lidia.frassine@actuaries.ca
 

Supplementary Tables to the Special Report on the CIA9704 Tables (Canadian Standard Ordinary Life Experience 2003–2008)

Supplementary tables have been added to the special report by the Individual Life Experience Subcommittee of the Research Committee detailing the intercompany mortality experience for Canadian standard ordinary life insurance policies, which was published in October 2010.

To view the supplementary tables, please access the links below.

Mortality Study: Special report on the CIA9704
5-year Tables
Supplementary – Table 8 by size 2003–2008
Supplementary – Table 8 by size 2004
Supplementary – Table 8 by size 2005
Supplementary – Table 8 by size 2006
Supplementary – Table 8 by size 2007
Supplementary – Table 8 by size 2008

Links: See above
 
Contact with Questions: Nikolai Serykh, Chair, Individual Life Experience Subcommittee, at NSerykh@munichre.ca
 

Research Paper – IFRS Disclosure Requirements for Life Insurers

For life insurers, the two primary implications of IFRS Phase I, which is due to be implemented in Canada on January 1, 2011, are related to the classification of contracts and enhanced disclosures in financial statements.

The IFRS Life Disclosure Subgroup, at the request of the Committee on the Appointed/Valuation Actuary, has drafted this research paper to identify the actuarial disclosures that are relevant to life insurers, analyze the impact of the actuarial disclosure requirements, including a comparison to current reporting under CICA, and provide guidance for actuarial disclosure, including examples.

This research paper presents the actual IFRS disclosure requirements, followed by the subgroup’s comments and suggestions along with illustrative examples of quantitative disclosures, where appropriate.

Link: http://www.actuaries.ca/members/publications/2010/210088e.pdf
 
Contact with Questions: Ralph Ovsec, Chair, IFRS Life Disclosure Subgroup, at ralph_ovsec@manulife.com

Webcast – CIA University Accreditation for Actuarial Exam Exemptions

French Webcast
December 14, 2010
12:00 – 1:30 p.m. (EST)
Presenters: CIA President Micheline Dionne and Accreditation Committee members Isabelle Larouche and Mathieu Boudreault.

English Webcast
December 15, 2010
12:00 – 1:30 p.m. (EST)
Presenters: Rob Stapleford, Chair of the Accreditation Committee, committee members Neville Henderson and Bruce Jones, and John Dark, a member of the CIA Board and the Accreditation Committee.

Learn more about the CIA University Accreditation Program. The Accreditation Committee will be hosting two webcasts, one in French on December 14, 2010, and one in English on December 15, 2010. They will provide an overview of the draft university accreditation program currently under discussion. This is an excellent opportunity to gain more information and ask questions on this important topic. The webcasts are available at no charge, but you must register in advance to attend.

Link: http://www.actuaries.ca/webcasts/index_e.cfm

Contact with Questions: Alicia Rollo, CHRP, director, education and professional development; alicia.rollo@actuaries.ca
 

September 2010 Risk Management Newsletter Now Available in Both Official Languages

The CIA has just produced a French version of the Risk Management Newsletter and the newsletter is now available in both official languages on the Society of Actuaries (SOA) website. The risk management section is jointly sponsored by the CIA, Casualty Actuarial Society and SOA. Its purpose is to promote education and research in enterprise risk management (ERM) and establish leading risk management techniques.

Link: http://www.soa.org/library/newsletters/risk-management-newsletter/2010/september/jrm-2010-iss20.pdf

Contact with Questions: Les Dandridge, director, communications and public affairs, at les.dandridge@actuaries.ca

Educational Note: Valuation of Gross Policy Liabilities and Reinsurance Recoverables

International Financial Reporting Standards (IFRS) will be effective in Canada for interim and financial statements relating to fiscal years starting on or after January 1, 2011. IFRS 4 deals with the measurement of liabilities for insurance contracts. It is a preliminary standard (often called "Phase 1") which allows the continuation of the current accounting policy for the measurement of insurance contract liabilities, provided certain criteria are met.

The Standards of Practice do not provide guidance on the calculation method or assumptions for the gross liability and the reinsurance recoverable. This educational note describes considerations in the valuation and presentation of the gross liability and the reinsurance recoverables.

If you have any questions or comments regarding this educational note, please contact B. Dale Mathews, Chair, Committee on Life Insurance Financial Reporting, at dale_mathews@manulife.com.

Link: http://www.actuaries.ca/members/publications/2010/210086e.pdf
 
Contact with Questions: B. Dale Mathews, Chair, Committee on Life Insurance Financial Reporting, at dale_mathews@manulife.com
 

Exposure Draft for Revised Standards of Practice – Practice-Specific Standards for Insurers (P&C Insurance) – Subsections 2260 and 2270

This exposure draft was approved by the Actuarial Standards Board on December 1, 2010. Changes are highlighted relative to the Standards of Practice that will be effective on January 1, 2011. An effective date of January 31, 2011, is proposed for the final Standard of Practice.

The changes affect subsections 2260 and 2270, which address margins for adverse deviations (MfADs) for property and casualty insurance. Currently, the Standards of Practice in subsections 2260 and 2270 do not allow for MfADs which are below the low end of the prescribed range. The desired outcome is to make it more clear to members that selection below the low margin may be acceptable in unique circumstances.

Comments on the exposure draft are invited by December 31, 2010. Please send your comments, preferably in an electronic form, to Jacqueline B. Friedland at jfriedland@kpmg.ca with a copy to Chris Fievoli at chris.fievoli@actuaries.ca.

Link: http://www.actuaries.ca/members/publications/2010/210084e.pdf
 
Contact with Questions: Jacqueline B. Friedland, Chair, Designated Group, at jfriedland@kpmg.ca

 
Calendar of Events
June 5-8, 2011
Practice Education Course
Delta Ottawa
Ottawa, ON
June 29-30, 2011 CIA Annual Meeting The Westin Ottawa Ottawa, ON
September
22-23, 2011
CIA Seminar for the Appointed Actuary
Doubletree by Hilton - Toronto Airport Hotel
Toronto, 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

Karen Hall (Chair), Larry Miller, Rob Stapleford, Dennis Schettler, Marc Drouin, Claudette Cantin, Yves Girouard, Elizabeth Boulanger and Betty Ma were appointed to the 2011 Elections Committee.

Jim Christie was appointed the CIA liaison to the Casualty Actuarial Society (CAS), effective immediately, until June 30, 2011.

Kathryn Hyland was appointed the CIA liaison to the Global Risk Institute (GRI), effective December 6, 2010.

Tony Williams was appointed a member of the Pension Advisory Task Force.

Rod Sproule (Chair) and André Sauvé were appointed members of the 2009 Pension Review Task Force. Louis-Georges Simard has resigned from the task force.

Daniel Pellerin was appointed Chair of the new Risk Management Committee.

A new task force to develop an implementation plan for the approved recommendations made by the Task Force to Enhance the Value Proposition of Associate Status in the Institute, as well as for the establishment of the ACIA designation, was established with the following membership: Jason Vary (Chair), Paul Winokur, Laura Newman, Dave Dickson, Chris Townsend, and Alicia Rollo from the Secretariat. It will be known as the Task Force on Associateship Implementation (TFAI).

The Committee on Board and Council Performance and the Task Force on CPC Membership were disbanded.

Practice Council

Martin Raymond and Doug Chandler have been appointed members of the Task Force on International Pension and Employee Benefits Standards.

Erika Schurr has been appointed Vice-chair of the Committee on P&C Insurance Pricing.

Kevin Lee has been appointed a member of the Committee on Property and Casualty Insurance Financial Reporting, effective July 21, 2010.
(Note that Kevin stayed on the committee after his term as chair ended on July 21.) Sarah-Salimah Bhanji and Denise Cheung have been appointed members of the committee, effective July 1, 2010.

Barry Gros, Anne-Marie Lainesse, Cameron Hunter, Mel Bartlett, Tony Williams, Tom Levy and David Short have been appointed members of the Task Force on MEPP/TBPP Funding, effective April 1, 2010.

Barbara Sanders and Dean Newell have been appointed members of the Committee on Pension Plan Financial Reporting.

For information only:

Blair Manktelow resigned from the Committee on P&C Insurance Pricing, effective September 16, 2010. Mylène Labelle, Jean-François Larochelle and Betty-Jo Walke also resigned from the committee, effective October 4, 2010.

Dale Mathews, Nathalie Bouchard and Tim Cavallin resigned from the Committee on Life Insurance Financial Reporting on January 1, 2011.