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

Canadian Institute of Actuaries/Institut canadien des actuaires

May 2011
Your Institute

By Micheline Dionne, FCIA
CIA President

The question of whether an actuary is a technician or professional often comes up, from a number of different angles. In fact, I have taken to pondering this question in recent weeks. When you get right down to it, what differentiates a professional from a technician? The CIA’s primary guiding principle puts us on the right track: the Institute holds the duty of the profession to the public above the needs of the profession and its members. But how does this actually play out?

To be sure, the actuarial profession includes a vast technical component, one that is central to our reputation and contributes to the myth of the actuary. That is why it represents an incredible asset. But at the same time, it represents one of our largest risk factors. This actuarial science of ours is not easy to convey in simple terms, and it can be tempting to shy away from even trying so as to appear more intelligent or simply not to be bothered. It can also be reassuring to confine ourselves to the role of technician, to refrain from value judgments, and to close our eyes while telling ourselves that our role is to determine a financial value and not to make decisions for our employer or our client. And make no mistake; our primary purpose as actuaries is to make good calculations when it comes to financial commitments and assumptions. Indeed, this is exactly what we are taught to do. These calculations are complex and require a great deal of judgment and experience, particularly to distinguish factors that are relevant and material from those that are not.

Being a professional means going beyond the numbers and asking ourselves whether there aren’t other pressing yet unidentified needs. This could entail making known our views on the value of the assumptions we are asked to use and on the risks taken, especially if we suspect that our employers or clients do not appreciate the full extent of the risks they are taking. It could well be that the initial reaction will not be very positive, but in the long run this sharing of knowledge will make a big difference in the future of our profession and in the future use of our services. A greater understanding of the scope of incurred risks is essential. We have a duty to be transparent and clear, and to take the time to explain the nature of our studies and recommendations in easily understood terms. Our public will be grateful for this. Their trust is increasingly dependent on our transparency. We are not God, and we can’t stop bad things from happening; we can, however, help mitigate the effects or help deal with them.
There is so much to do in a world that faces increasingly numerous and varied risks. The profession has a great future ahead of it so long as we can be more than mere technicians.

I for one am optimistic about the choices we will make!

If you have any questions or comments, please feel free to write me at

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

By Michel St-Germain, FCIA

I am sure you have noticed that there has been a significant increase in the number of submissions of public positions prepared by the CIA. Those include:
  • Submissions to OSFI and AMF on the supervision of insurance companies;
  • Responses to requests from regulators on proposed changes to pension laws;
  • A position on the role of government-facilitated retirement income plans including an increase in the Canada Pension Plan;
  • The first Retirement Risk Survey, illustrating the concerns of Canadians on retirement planning, the adequacy of retirement income and the needs for health care after retirement;
  • Proposed changes to accounting requirements under IAS;
  • A position on the elimination of the mandatory requirement of the long-form census; and
  • A position on self-funded long-term disability programs.
This follows a strategic choice by the CIA to be more active and participate in public debate on issues relevant to our profession. Indeed, taking public positions will:
  • Improve actuaries’ image and let more officials know of our special expertise; and
  • Correspond to our objective of serving the public interest before our own interests.
But, more importantly, we are taking public positions because we have something to contribute to some important debates. Actually, many of us, individually or through our employers, have been active in public debates and in submitting comments to public officials.

A few years ago, the Institute adopted a process for the development of public positions. It starts with the identification of an opportunity to prepare a submission, and this may come from an outside request or a suggestion from a CIA committee, or from an individual member. After consultation, the President and the Executive Director must agree that a submission is appropriate, appoint a Governing Entity (usually the Board, the Member Services Council or the Practice Council). Then, the Chair of the Governing Entity appoints an Authorizing Committee and a Drafting Entity. The latter will:
  • Research the issue;
  • Develop a CIA position;
  • Write the submission; and
  • Seek approval from the Authorizing Committee after the Governing Entity has had an opportunity to review and comment on the draft.
Being a member of the Drafting Entity is an excellent opportunity to contribute to the Institute. If you hear of such opportunity and would like to contribute, do not hesitate to let that be known.

There are some challenges in preparing these submissions:
  • Some topics are controversial. A firm position of the CIA may be criticized by the public; at times, we avoid taking a position and present alternatives with analysis of pros and cons.
  • Not all actuaries will agree with a position of the CIA, or with the way it is presented and the arguments used.
  • At times, our position may not fit within the field of pure actuarial expertise; some may argue that we should stay within our area of expertise.
But I do believe that our efforts are worthwhile and we can contribute something back to society. The submissions made on pension reform are a testament to this. We have helped public officials improve their understanding of these issues. As the great pension debate is not over, I am expecting that the CIA will continue to participate in the discussions on whether Canadians should save more for retirement, what is the best way to save, when should we save for retirement, what should be the respective role of government, employers and individuals, and how can defined benefit plans survive?

There will be other public hot topics. The aging of the population is increasingly perceived as one of the major challenges of our society, and in particular its effect on healthcare costs. Surely actuaries can participate in this debate.

Michel St-Germain, FCIA, is Chair of the Member Services Council.

According to Environment Canada, Canadians are the second highest water consumers in the world, each using an average of 335 litres of water every day - twice as much as Europeans.

Demand for water is on the rise, from increased populations, manufacturing, irrigation and other man-made uses. Meanwhile pollution, declining water tables and prolonged drought conditions are shrinking the usable supply.

Using less water is essential not only to ensure a steady supply, but also to lower water and heating bills associated with pumping it to our homes and warming it for various household uses. Shutting off water when it’s not being used and using less to do the same job are two simple ways you can preserve this precious resource before it literally goes down the drain.

Go with the low-flow

Installing a low-flow shower head will be a very smart addition to your water conservation plans. Available at most home building and supply stores, these fixtures use about half the water of a conventional shower head.

Also, take quick showers instead of baths; you’ll use up to 50 percent less hot water. If your shower is fitted with a cut-off valve, try a "sailor shower": turn off the water while soaping and shampooing, then turn it on long enough to rinse yourself off.

When washing or shaving, partially fill the sink and use that water rather than running the tap continuously.
Turn the flow off while you are brushing your teeth to save even more water.

A better flush

About 65 percent of indoor home water use occurs in our bathrooms, and toilets are the single greatest water users.

Upgrading your toilet can lead to significant water savings that you can bank on over the life of the purchase. Replacing an 18-litre-per-flush toilet with an ultra-low-volume six-litre flush model represents a 66 percent savings in water flushed and will cut indoor water use by about 30 percent.

The dual-flush toilet takes water-efficiency one step further by using six litres of water to flush solid waste but only three litres to flush liquid waste.

Stop the leaks

Leaky fixtures waste a huge amount of water. A hot water faucet that leaks one drip per second will waste 9,000 litres per year, while a toilet that runs after flushing can waste up to 200,000 litres of water in a year.

Fix leaking faucets as soon as possible. To find out if your toilet is leaking, put two or three drops of food colouring in the tank at the back of the toilet. Wait a few minutes. If the colour shows up in the bowl without flushing, there's a leak.

If your toilet leaks, make sure that the flapper valve inside the tank is sitting properly in the valve seat. Also check that the flush valve lift wires are not bent or misaligned and that the valve seat is not corroded. All of these can be fixed easily and inexpensively. If, however, the leak is around the base of the toilet where it sits on the floor, call a professional.

If you have a water meter, take a reading at night and again early in the morning, making sure that no one in the house used any water throughout the night. If the reading is significantly different the next morning, you may have a leak somewhere. Consult a plumber and repair the leak immediately.

Information for this article came from Environment Canada:
Institute News

Inspired by the challenge of new concepts to develop and implement, Sylvain Fortier, pictured, became interested in risk management early in his actuarial career. And now that enthusiasm has led to him becoming a key enterprise risk management (ERM) professional.

Sylvain, vice-president of models and measures of risks at Laurentian Bank in Montréal, is responsible for ensuring that the bank is prioritizing the right areas of risk. He is also involved in underwriting and investment strategies, risk tolerances and appetites, and establishing the company’s ERM framework.

He developed his taste for this area of actuarial science after being inspired by his professors while earning an MSc at Université Laval. He said, "After my exams I followed the ERM track as soon as it was created. That was a great move by the actuarial profession because we are risk professionals at heart. There was a lot to put in place and new concepts to develop, and the quantitative aspect of risk was evolving in interesting ways."

He first worked as a credit risk analyst, but his knowledge of ERM means he now considers every type of risk, such as credit, market and interest. "In ERM you are involved in all business lines, and you have a comprehensive view of the company. You are involved at a high level. You try to ensure there is coherent management of the risks while the dynamics are changing a lot, and there are constantly new problems and risks to manage."

Actuaries are important to any business, Sylvain added. "They can evolve in any risk field. You need a strong quantitative background, and actuaries have that skill. They have a good understanding of the impact of risk factors, and their impact on the balance sheet, benefits and costs. We are able to understand complex concepts and simplify them for management and the business as a whole. That makes actuaries essential in the role of enterprise risk management."

Those moving into the risk management field needed to be self-confident, he said, and the profession still had work to do on promoting the importance of actuaries to companies considering creating an ERM strategy.

"The main challenge is to believe in your aptitude and competency in doing the work," he added. "Just having an actuarial background gave me a lot of credibility, and you have to believe in your capacity. There are a lot of people in other professions who are involved in risk, and we need to defend our role so enterprises turn to us for risk management expertise and thinking. It is not yet their first reflex to turn to actuaries."

For previous interviews in this series, visit the following links: Minaz Lilani, Mariève Tetréault, Jean-Yves Rioux, Michael White, Altaf Rahim and Kathryn Hyland.


By Jason Vary, FCIA

Further to my article in last month’s (e)Bulletin regarding the overall enhancements for Associates in the CIA, the purpose of this piece is to provide more details on the most significant changes; specifically, the ACIA designation and voting rights.

ACIA Designation

It is the view of the Associateship Implementation Task Force and Board that the ability to attain and proudly display the ACIA designation would be a significant benefit to actuarial candidates in Canada who have achieved the ASA, ACAS or CERA designation. It will also provide individuals with the opportunity to achieve an Associate-level designation through the CIA’s University Accreditation Program (UAP). Until the Society of Actuaries (SOA) and Casualty Actuarial Society (CAS) recognize the UAP, this may be the only route to an Associate-level designation for some actuarial candidates in Canada.

Introduction of the ACIA designation will encourage actuarial students to enrol earlier, giving them access to the professional guidance that will strengthen their careers and their potential contribution to the Institute. An ACIA designation supports the goal of aligning the eligibility requirements for an Associate of the CIA with those of the SOA and CAS.

It is also noted that in addition to the U.S., the UK and Australia both have Associate-level designations. Further, in discussion with the UK regarding the renewal of our mutual recognition agreement (MRA), an MRA at the Associate level has been proposed, which they have initiated with other actuarial associations.

Voting Rights

The task force and Board believe Associates who have been enrolled in the CIA for five or more years have demonstrated their commitment to the profession and should be rewarded with additional rights and privileges, such as voting.

It is noted that in 2008 the SOA extended voting rights to ASAs who had been enrolled for five or more years.

Rights of Fellows

While there are a number of enhancements being implemented for Associates, the rights of Fellows are still clearly paramount:
  • Fellows will continue to hold the only membership status which will qualify as the "reserved role".
  • In accordance with the Policy on the Use of CIA Membership Titles and Designations, the term "actuary" is only to be used in reference to a person who is a qualified Fellow.
  • Only Fellows will be permitted to run for office (i.e., President, Secretary-Treasurer or Director).
Bylaw Changes

In order to implement the ACIA designation as well as the granting of voting rights for Associates after five years, bylaw changes are required which need to be confirmed by members. A membership vote will take place at the CIA Annual Meeting on June 29–30, 2011 in Ottawa. A proxy voting period will be available in advance.

For More Information

More information will follow, including official notice of the proposed bylaw changes and a webcast, as we approach the Annual Meeting.

Feedback Requested

We encourage you to provide feedback on the above enhancements for Associates to

You may also participate in the discussion related to the bylaw changes on the Amendments listserver by opting in. As a reminder, you can update the lists that you subscribe to in the Members Site of the CIA website.

Jason Vary, FCIA, is Chair of the Associateship Implementation Task Force.

Gerald Burger, FCIA (1965)
Sylvie Dion, FCIA (1983)
Michael Smith, FCIA (1989)
Kenneth Stewart, FCIA (1977)

Federal Election Questionnaire

The Institute has been involved in the last two federal elections by asking the main political parties questions of interest to the profession, and sharing their replies with members. We have done so again, and the responses from the parties will be posted on the Members Site as they are received.

Link: Check the Members Site for the latest responses.

Contact with Questions: Les Dandridge, director, communications and public affairs, at

Research Paper: Funding of Public Personal Injury Compensation Plans

This research paper is intended to provide information to assist actuaries who work on the development, review and modification of funding policies for public personal injury compensation plans. It contains a summary of the approaches to funding currently used by these plans as well as some guiding principles applied in their development.

To read the research paper, please click on the link below.


Contact with Questions: Thane Gordon MacKay, member, Committee on Workers’ Compensation, at

CIA Secretariat Moving

At the end of May, the Secretariat is moving its office to a new location at Constitution Square, Ottawa.

Our telephone number, extensions and fax number will not change.

The new address is:

Canadian Institute of Actuaries
360 Albert Street, Suite 1740
Ottawa, Ontario
K1R 7X7.

Contact with Questions: Jacques Leduc, director, operations, finance and administration, at

Notice of Annual Dues for 2011–12

Spring is in the air and it is a time of renewal, including the renewal of your CIA membership! You will be receiving your Annual Dues invoice for 2011–12 electronically in the weeks to come.

At its meeting on March 23, 2011, the Board of Directors approved the following fee structure for the coming 2011–12 year:
Fellows: $1,170
Associates > 10 years: $810
Associates, Affiliates, Correspondents: $590.

This year’s modest increase in fees will ensure members continue to receive a high level of service from the CIA and help deliver the six areas of focus in its Strategic Plan (adopted November 2009).

  • Due to significant changes in the profession and the environment, both in Canada and abroad, it is evident that the provision of professional guidance and professional development remains critical to ensuring a continued high degree of competency among actuaries. The CIA will continue to offer its speciality seminars with the addition of an Investment Seminar in the fall, as well as its Annual Meeting in June. These opportunities feature top-quality Canadian content. The Institute will also be offering more webcasts this year than last, featuring industry experts who will share their expertise on a variety of topics. This, and the promotion and dissemination of relevant research, will therefore continue to be strategic areas of focus for the CIA over the next year.
  • The CIA must also continue to focus on promoting the actuarial profession. Stronger outreach to students and employers will enable the Institute to positively promote the profession and raise the awareness of the high-quality analysis and advice our profession delivers to the public. The CIA has been discussing the potential for a university accreditation system for many years. In 2010, the Board decided to move ahead with a Canadian program. The Accreditation Committee is working hard to ensure the accreditation and review processes are robust to ensure acceptance of the program by its education partners. Implementation is now set for September 2012, but with the list of universities to be accredited finalized by October 31, 2011.
  • In 2010, a special task force looked at the value proposition for Associate members. The task force made a number of recommendations to the EEC and CIA Board based on bringing the requirements for an Associate of the CIA in line with the requirements for Associates of the SOA and CAS. In addition, the CIA Board also approved the adoption of an ACIA designation and other benefits for Associates. The Institute will be working on communicating these changes to the membership between April and June. A vote will take place on the bylaw changes at the June Annual Meeting. Any changes to the requirements for Associates would be effective June 1, 2012.
  • The CIA must continue its efforts to both raise the profile of the profession and influence public policy decisions through the provision of advice to decision-makers. By making its expertise available, the Institute will serve the public interest and demonstrate the profession’s potential contribution to matters of critical importance to Canadians.
  • In the context of globalization, International Financial Reporting Standards continue to evolve. Canadian actuarial standards of practice and Canada’s regulatory system are positively recognized worldwide. The Canadian actuarial profession has much to contribute and therefore the CIA members will take appropriate means over the next four years to positively influence the development of international actuarial standards of practice.
  • Finally, the CIA will only be successful if it is capable of effectively responding to these challenges. Its activities and programs are only made possible through the work of hundreds of dedicated volunteers and a small number of staff. The Institute must take appropriate measures to maximize the effectiveness of volunteer participation and to enhance the Secretariat’s capacity to support this critical volunteer leadership while avoiding over-burdening the volunteers.

These six areas of focus are critical to the sustainability of the profession. It is our belief the Strategic Plan will position the FCIA designation as a designation of choice in the future and will ensure the profession is poised to meet the challenges ahead.

Yours truly,

Martin Roy

Contact with Questions: Jacques Leduc, director, operations, finance and administration, at

Enhancements to Associate Status in the Institute

The CIA Board of Directors and the Task Force on Associateship Implementation are seeking input from the membership on important changes that will affect Associate enrolment in the Institute.

Some of these changes will require adjustments to the CIA Bylaws and a membership vote by advance proxy voting over several weeks in June 2011, and by in-person voting on June 29, 2011 at the General Business Session of the 2011 Annual Meeting in Ottawa.

This memo is intended as a briefing on the bylaw changes under consideration. Formal communication of the proposed bylaw changes will commence towards the end of May. We hope all members will take advantage of the opportunity to review the materials accompanying this memo, and encourage you to provide feedback by May 6, 2011 to

Memo to Members: Enhancing the Value of Associate Status in the Institute

Memo from EEC to Board: Recommendations to Enhance Associate Status in the Institute

Report: Task Force to Enhance the Value Proposition of Associate Status in the Institute

Contact with Questions: Alicia Rollo, CHRP, director, education and professional development;

Revised Rules of Professional Conduct

The CIA Rules of Professional Conduct have been revised to reflect the changes that were confirmed by members at the General Meeting held in Ottawa on March 10, 2011.


Contact with Questions: Michel Simard, Executive Director, at

Report on Canadian Economic Statistics 1924–2010 – Final Release

The final version of the Report on Canadian Economic Statistics 1924–2010 is available on the CIA website.

This document is only available to CIA members. It can be found in the Members Site on the webpage of the Committee on Investment Practice (Organization>>Committees and Task Forces>>Committee on Investment Practice>> Reports and Documents).

Link: Note: this link takes you to the final version. An earlier published version contained an error.

Contact with Questions: Jonathan Hede, Chair, Committee on Investment Practice, at
Tony Williams, Vice-chair, Committee on Investment Practice, at
Calendar of Events
June 3, 2011
Professionalism Workshop
Royal York Hotel
Toronto, ON
June 5-8, 2011
Practice Education Course
Delta Ottawa
Ottawa, ON
June 29-30, 2011 Annual Meeting The Westin Ottawa Ottawa, ON
September 9-10, 2011
Actuarial Evidence Seminar
ITHQ - Québec Tourism and Hotel Institute
Montréal, QC
September 22-23, 2011
Seminar for the Appointed Actuary
Doubletree by Hilton - Toronto Airport Hotel Toronto, ON
November 2, 2011
Pension Seminar
Doubletree by Hilton - Toronto Airport Hotel
Toronto, ON
November 3, 2011
Investment Seminar
Doubletree by Hilton - Toronto Airport Hotel
Toronto, ON

Additional information on all CIA meetings can be obtained at:, or by contacting Nancy Jenkinson at 613-236-8196, ext.104, or

For information on CIA webcasts, visit
Board and Council Updates
Eligibility and Education Council

The Organizing Committee for the 2010 Seminar for the Appointed Actuary and the Committee on Co-sponsorship of Exams have been disbanded with thanks. The latter’s Bilingual Subcommittee will now report to the Committee on Education and Examinations. Isabelle Morin has been appointed to the subcommittee as the Society of Actuaries’ translation general officer, effective April 8, 2011.

Sarah-Salimah Bhanji, Maxime-Frédéric Brochu-Leclair and Cathy Macdonald have been appointed to the Committee on Eligibility.

Heather Wolfe has been appointed to the Pension Subcommittee of the Committee on Continuing Education.

Roger Allen has resigned from the Committee on the Application of Rules and Standards’ Subcommittee on CPD Compliance.