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

Canadian Institute of Actuaries/Institut canadien des actuaires

March 2013
Your Institute

By Simon Curtis, FCIA, CIA President

As my year as President quickly passes by, one area I have found myself spending more and more time thinking about is professionalism and how it impacts our work as actuaries, and as members of the Canadian Institute of Actuaries in particular.

Today as actuaries we face increasing competition in the market from individuals who are trained with or have developed broadly similar skillsets—financial engineers, finance MBAs, Masters of Finance, financial economists, and others—which leads to the question, what are the key differentiating qualities we offer?

From my perspective, the one that stands out most is our professionalism.

A professional is described in dictionaries not only as a member of a profession that requires specialized knowledge and often intensive training, but also, importantly, as somebody conforming to technical and ethical standards of a profession. It is this "quality assurance" of a consistently high level of technical training, plus strong standards governing not just technical work but also behavior, that provides the "branding" for us as actuaries and makes us sought after as providers of services that others could also strive to provide. This, more than simply technical ability, is what ultimately separates us from others.

As a professional association we have a dual responsibility: first, a duty to the public and users of our members’ services; second, to attend to our members’ affairs and see that they are fairly dealt with. We also have a guiding principle to manage potential conflict between those responsibilities: we cannot ethically attend to our members’ needs at the expense of the service to their clients or the community’s welfare.

Despite its importance, my own observation is that, as a group, we take our status of respected professionals somewhat for granted. I think this is potentially dangerous as there are a number of challenges facing us:
  • As I mentioned above, there are an increasing number of individuals developing technical skills that overlap those of actuaries.
  • There is the risk of increasing fragmentation within the profession as different bodies, be they national like the CIA, international like the International Actuarial Association, or more education-based multinational organizations like the Society of Actuaries and Casualty Actuarial Society, all attempt to expand their reach. While there is a lot that is healthy about having several vibrant actuarial bodies, the potential for it to weaken the profession is also there.
  • Societal values have increasingly emphasized monetary rewards and interests of the organization over broader societal or ethical values, inevitably weakening bonds to a profession.
  • Our society has become much more demanding of professionals’ time, and provides many more choices for individuals to spend the time they have, reducing the hours available to give back to professions.
  • There is a trend for large numbers of actuaries to be employed by a relatively small pool of large employers. This concentration is also a challenge to the profession since it creates an environment which does not favor the free exchange of sufficiently broad and reasonably independent perspectives and views on emerging issues, given the potential concentrations of expertise in a limited number of employers.
This latter point is a particular challenge to the profession in Canada, where the number of employers is quite concentrated in several of the practice areas. The extensive in-house training and strong cultures and capabilities of large organizations have the potential to create "islands" of professional practice and reduced engagement with the broader profession. This is particularly challenging in Canada, where we substantially use a principles-based as opposed to rules-based approach to practice, a key requirement of which is a need for strong communication across the profession on appropriate practice. This concentration can challenge our independence as a profession. With a few exceptions, you will be hard-pressed to find the word "independence" in most books and textbooks about actuaries. You will find competence, freedom, stewardship, and loyalty. You will also find many references to the pitfalls of conflicts of interest. I believe the concept of independence is a lynchpin in what our profession should stand for. Independence set our standards for professionalism somewhat, and it frames our guidelines for ethical behavior.

Independence as a professional does not mean an inability to advocate or adopt a certain perspective or view. What it does mean is ensuring that we seek out, consider, and disseminate competing perspectives, and remain respectful of the views of our professional peers.

It also means ensuring we are not unduly influenced by those who would use their position or power contrary to the public interest (i.e., we should be mindful of our stewardship role), and taking care to remain free of associations and activities that can compromise our integrity or credibility.

The good news is that the degree to which the CIA (and other actuarial organizations) retain or even increase their professionalism is entirely in the hands of the members.

Volunteerism is key—a lot of Institute members are passionate about CIA involvement, but we have to have more involvement, particularly with younger members. The willingness of members to step up and take leadership roles (e.g., on councils, the Board, or as committee chairs) is also vital. A strong commitment from all members to take continuing professional development (CPD) requirements seriously, and complete CPD hours via a broad number of sources, is important. Support for our standards and discipline process and their continued development (including the emerging area of international standards) is essential. Finally, creating the time and getting out regularly and interacting with your colleagues across the profession is critical.

Simon Curtis, FCIA, is President of the CIA.


By Jason Vary, FCIA

In 2012, the Institute adopted a 10-year strategy with respect to education and qualification processes for the Associate and Fellow (ACIA and FCIA) designations to ensure a cohesive and rigorous approach to education in Canada. This approach will recognize multiple sources of education and enhance the positive recognition of FCIAs internationally.

With our education strategy clearly defined, we are now well into the implementation phase on a number of fronts, including discussions with the Society of Actuaries (SOA) regarding its recognition of our University Accreditation Program (UAP), and defining our education and eligibility requirements in Canadian terms.

SOA recognition of the UAP

The Institute is continuing its talks with the SOA with the goal of securing the society’s recognition of the UAP. Recent discussions included a meeting at the end of February with members of the SOA leadership team, as well as a presentation earlier this month at the SOA Board meeting. The society has also had an observer on the Institute’s Accreditation Committee from very early on in the implementation process.

One of the obstacles to the SOA’s recognition appears to be its largely U.S.-based membership’s resistance to moving away from a validation-by-examination education system. However, it has been my experience that once an individual understands the rigor and depth of our program, they ultimately agree that offering this alternative to some preliminary exams is a good thing for the actuarial profession.

The rigor is evidenced in part by our requirements regarding credentialed actuarial professors, syllabus coverage, and exemption mark setting. This is further controlled and verified by having external examiners employed by the Institute who, starting this spring, will perform a thorough annual audit of each university.

I remain optimistic that the SOA will recognize the program in due course, and I will continue to reach out to its leadership and members in pursuit of this goal.

While we are on the topic of the UAP, I am happy to report that the University of Montréal has been granted accreditation for courses beginning in the fall 2013 semester. The university joins 10 others, which were accredited for courses starting in the fall 2012 semester.

Task Force on Canadian Eligibility Requirements

Angelita Graham is leading a multi-disciplinary task force to define the Canadian education and eligibility criteria to become an ACIA and FCIA, and to determine how the requisite knowledge will be taught and tested. The task force is expected to complete its work by fall 2013.

Once we have our education and eligibility criteria documented in first principles, it will allow the CIA to more efficiently and consistently evaluate requests for recognition, such as those from the SOA with respect to its upcoming General Insurance track, and a new mutual recognition agreement with the Actuarial Society of South Africa.

Professionalism Workshop

The Institute’s Professionalism Workshop, which is a requirement to obtain the ACIA designation, was recently reviewed and refreshed. The updated course was rolled out last month and includes additional case studies on professional issues, various pre-readings, and added discussion on the services provided by the Institute to its members. The course is also offered at more dates and locations throughout the year, with a particular increase in the number of French offerings in response to rising demand.

ACIA volunteers wanted

I would like to personally encourage any new or existing Associates to consider volunteering with the CIA. The Institute has a strong desire to involve members of all levels in the Institute’s activities, and given the recent introduction of the ACIA designation there is an increased demand for ACIA volunteers. In fact, I am interested in recruiting one or two ACIAs to serve on the Eligibility and Education Council, so please contact me directly if you are interested.

Jason Vary, FCIA, is Chair of the Eligibility and Education Council.

Working intently on a project, one can discover that time has flown by, with all that means for those facing deadlines or filing billable hours. While many people have learned effective time management techniques, it can be difficult to manually track time spent on a certain task while switching back and forth between different activities. There are various online solutions to help you record how you filled your day; here are just two of them.

ManicTime, which comes in free and more advanced paid-for versions, is designed to run in the background while the user gets on with their activities. Once those tasks are completed, the collected data allows the worker to accurately keep track of their time.

Its process centres around three timelines, shown on a grid similar to that of an events planner or calendar:
  • The computer usage timeline tracks when the computer is active or idle.
  • The application timeline lists which application was used, when, and for how long. Different applications have different colours, making it possible to see at a glance what kind of work was performed at what time.
  • The documents timeline reveals what websites were visited and what documents were opened.
Over time, the software will gather a large amount of data, broken down to enable users to see their top applications, most-visited sites, most-used tags, and more. It can produce charts illustrating how long you spent using your computer, and custom charts that might reveal, for example, how much work was performed for a particular client.

Praised by various experts for its flexibility and ease of use, ManicTime has an active forum of users and an extensive set of frequently-asked questions for those new to the idea of software tracking their activities.

Describing itself as "insanely simple", toggl
says that it can "kill timesheets" by allowing the user to type in a description of a task and then click a button to start timing it. Once they have finished, the software generates a comprehensive report of what was done, and when.

Its makers say that tracking time with toggl is easy and intuitive, and it is possible to create fairly detailed results with just a few button clicks. Extensive lists of activities can be timed to the second and inserted into graphics of various formats to reveal what proportion of the working day revolved around a particular project or client. It works online or offline, and data can be stored "in the cloud" to be accessed whenever the user goes on the internet again at their desk or while on the move.

Although is it housed on the internet, toggl offers apps for desktop computers and Apple and Android portable devices and has won major customers, including Dell. Access is free for 30 days and then costs from $5 a month. For those who manage groups of workers, toggl's creators have developed teamweek, which can reveal if a department's workload is properly distributed or if a worker has too much time on his/her hands.

the colourful and easy-to-read interface; the amount of data recorded.
its simplicity; the ability to store data remotely to access from any device.

its website is fairly limited and static.
pricing is not clearly explained.

Institute News
As announced in last month's (e)Bulletin, elections will soon take place for four Director positions (three-year terms), the Secretary-Treasurer (two-year term), and the President-elect (one-year term, three-year commitment). Any member who wishes to run for one of these positions, and who meets the requirements below, will have their name appear on the ballot. The Elections Committee is also actively identifying and encouraging potential candidates to run.

Note: the deadline for submitting candidatures is April 2.

Joining the Board brings with it the satisfaction of contributing to the profession, a boost to your professional standing, reputation, and career prospects, exposure to every aspect of actuarial work, and the opportunity to collaborate and network with CIA members and others.

If you are interested in nominating an individual or submitting your own name for this year’s ballot, please do so before April 2 by contacting Shirley Ann Mahon at the CIA Head Office.

Getting on the Ballot

All candidates must be a Fellow of the Canadian Institute of Actuaries in good standing as per CIA Bylaw 11.02 (1) and must submit the following to the Head Office:
  • Signatures or e-mail confirmation, subject to validation by the Elections Committee of at least 15 Members indicating support for their candidacy;
  • A 500-word (maximum) position statement; and
  • Requested biographical information, including a photo, as well as past CIA volunteer service (which is verified for accuracy in the CIA database). The information and photos will be posted to the website.
The Head Office confirms that the candidate is a member who is eligible for election and coordinates with the candidate to obtain and translate his or her documentation, which is then sent back to the candidate for a final review.

The Campaign

The Campaign Period normally runs two weeks prior to the beginning of the voting period. Candidates are asked to answer questions from the membership, via an electronic discussion forum. The launch of the campaign period is signalled by the posting of the names and information (i.e., biography, photograph, and position statement) regarding all candidates to the CIA website, along with an announcement sent via the Announcements e-mail listserver. All candidates are encouraged to use the discussion forum to its full advantage, allowing the electorate to get to know them, and promoting communication and debate on the issues that are important to members.

The Vote

The voting period begins at the end of April.

When the time comes please vote!

CIA Head Office staff are closing in on the launch of the Institute’s new website, and members might be interested in the new information and tools that they will be experiencing shortly. Feedback from test groups has been very good, final tweaks and adjustments are being made daily, and documents are continuously being uploaded.

What’s new about the site?
  • Look and feel
Aside from the familiar CIA blue, the site looks completely different. Sections have been restructured, menus have been reorganized, and information is far easier to find.

Virtually everything is now open to the public, aside from detailed information on committees, councils, and task forces, the full membership directory, and the tools for members to make changes to their personal data. Almost all CIA documents are searchable and available on the public website.
  • Address
The address for the new site will be revealed on launch day, but rest assured that it is an efficient address that gives us a chance to start afresh. You may want to share it with those in your firm who use the current site but are not CIA members.

This also means that e-mail addresses for all CIA Head office staff have changed, and details of the new addresses will be announced when the website launches. For the next few months, those who use the old addresses will be forwarded automatically to the new ones.

You will be able to log in to the site using your current CIA website username and password. All existing user accounts have been migrated to the new site.
  • Publications search tool
All CIA publications will now be stored in a content management system (database), which is fully searchable (including, for the first time, the content of the documents). Check out Publications>>Search Publications to find any document posted on the site, or check out the other pages in the Publications section, where different publication types are already displayed without any need for searches (e.g., Bylaws, reports, policies).

A significant portion of the CIA publications that were posted on the old site are already available on the new site, and the uploading process will continue for many more weeks. Hundreds of documents that were created before the Institute went digital have been scanned and will be added to the database over time. The content of these documents cannot be searched, but title, publication date, author information and a number of key words will be in the database, and this will help members track them down.

When you click on the title of a document, you will view the document’s properties and details, which include in many cases its related documents and also previous versions of the document. If the properties show you that you have found the right document, you can click again to download it. The previous version details are particularly helpful as an archive tool for documents such as Bylaws and Rules of Professional Conduct.
  • Standards of Practice
Standards are displayed in a new format, which also links to past versions of each part of the Standards (archives). Of course, they are available in total and by practice area. Check out Publications>>Standards of Practice. (Note that the Standards page will also be integrated into the Actuarial Standards Board and Actuarial Standards Oversight Council websites, prior to launch.)
  • Guidance material
Guidance material is available by practice area and type (Educational Notes, Research Papers, Reports and Memoranda), is sortable by Publication Date, Title, or Accession Number, and is displayed in a much more user-friendly format. Check out Publications>>Guidance Material.
  • Research
A new Research section has been added, which will provide members with information regarding current and past CIA research projects and requests for proposals that are currently underway. A discussion listserver will foster dialogue among individuals who have an interest in the CIA’s research activities. Through regular communication, there should be a better understanding of the CIA’s research. It is also planned that this forum will generate additional suggestions for research activities and also allow members to comment on other members’ ideas, which will assist the Research Committee in prioritizing its projects.
  • e-Commerce
In the past, registering and paying for CIA events and services was awkward, involving a number of steps for members and even more for Head Office staff. An e-commerce system has been integrated into the new website, streamlining the process.
  • News service
This service is now available on the public and members home pages.
  • Members only
A fully integrated Members Site has been developed that restricts access to certain content. The Members menu only appears once you’ve logged in to the site. Most of the tools that were available to members under Toolkit on the old site are now found under My Profile on the Members menu.
  • Other new information
  • We have created a page that shows the Most Viewed Publications on the site, and another showing the Most Recent Publications posted to the site. Both of these pages are accessible in the Publications section, and also in Quick Links. It will obviously take a little while before they become useful tools, particularly the Most Viewed. But over time they will provide interesting information.
  • A new Volunteer Centre has been developed that will provide all CIA volunteers, and those members looking to volunteer, with helpful orientation and training material that will improve their volunteer experience.
There are two things to keep in mind as you explore the site:
  • We are working on it daily, mainly uploading archived content but also, at times, implementing new functionality. You may occasionally experience some slow-downs if a major update is being performed. Please be patient, wait a few minutes, and try again.
  • Some of the tools from the current CIA site have been integrated in their current form into the new site as part of Phase 1 of the website redevelopment. You will undoubtedly recognize the layout of the CPD Tracking Tool and the Member Directory Search Tool, for example. Some of these are already being reviewed and redeveloped for the new site (e.g., CPD Tracking Tool, Hire an Actuary). However, the redevelopments will not be completed prior to the launch, and will be integrated as part of Phase 2.

A CIA-backed initiative to consider the financial effects of climate change has won praise from a leading member of the profession.

The Institute was one of the organizations involved in the production of a new report, Determining the Impact of Climate Change on Insurance Risk and the Global Community. The 158-page document, which was written by three climate modelling experts, looks at factors like temporal and spatial scales, interest, judgment criteria, and the desired level of certainty to analyze how climate change can alter the risk management landscape.

It was put together following discussions involving the CIA, Casualty Actuarial Society (CAS), Society of Actuaries, and the American Academy of Actuaries, who have collaboratively commissioned committees to develop or support research in this area and assess potential risk management implications for those who work in insurance. CIA member CIA member Caterina Lindman, pictured above, chairs the Climate Index Working Group (CIWG), which fostered collaboration among the representatives of the various actuarial societies and the climate scientists at Solterra Solutions to produce the report.

Last month it was reviewed by Yves Guérard, who was secretary-general of the International Actuarial Association (IAA) from 1997-2010 and was responsible for forming the IAA Environment Working Group. Writing in The Actuary, the magazine of the UK actuarial profession, he said: "The credentials of the authors and the well-documented scientific contents make this report a highly credible source of information for all actuaries. The global actuarial community is indebted to the four North American actuarial associations for investing time and resources in commissioning this report and in particular to the members of the Climate Index Working Group for providing guidance to the authors.

"The report is targeted at an American audience, where denial of the anthropogenic component of climate change is not rare. Thus the authors were careful in dealing with scientific uncertainty that has been misused to stall action, for example, about smoking, chlorofluorocarbons and ozone depletion. They explicitly state that some existing level of uncertainty is not a reason for inaction, as expressed in article 3.3 of the UN Framework Convention on Climate Change (UNFCCC), to which the US and 194 other nations are parties. The report argues that the use of insurance instruments as means of pecuniary protection is highly resonant with this principle.

"After reading less than half of the first four chapters, I was persuaded that even hard-core deniers would have been converted already. However, scientific data continues to accumulate for two more chapters, providing the scientific background for the development of climate indices, namely the Actuaries Climate Change Index (ACCI) and the Actuaries Climate Risk Index (ACRI)."

Ms. Lindman said: "It was heartening to read these comments from Monsieur Guérard. Remarks like his show that the efforts of all the people who worked on this project will prove valuable to anybody considering the effect of climate change upon insurers and society as a whole. The Climate Index Working Group is looking forward to further serving the community by developing the Actuaries Climate Index and the Actuaries Climate Risk Index."
According to a new report, North American insurers are about to embrace usage-based insurance (UBI) in large numbers. However, UBI has divided opinion: some believe it leads to more accurate forecasting, but others are concerned about its impact on risk pooling and consumers.

Thanks to devices fitted within customers’ vehicles, usage-based auto insurance programs calculate policy discounts by analyzing data transmitted from driver to insurer. They take into account various elements; mileage is most frequently used, followed by time of day, braking, and speed.

If the new report from research firm Strategy Meets Action (SMA) proves accurate, such technology will "rapidly" expand among North American insurers this year. SMA found that 70 per cent of auto insurers are executing, developing, or planning UBI programs, and Richard Welch, guest author of the report, said: "2013 is likely to be characterized by a rapid expansion of the number of companies offering UBI options to their customers."

Almost half of the 110 North American insurance professionals who participated in the survey said customer retention was a major benefit. They also highlighted more accurate ratings, reductions in costs, and better claims control.

Canadian supporters of UBI include Québec-based Industrial Alliance. It offers Mobiliz, which it says is "specially designed to raise awareness about responsible driving". A device informs the motorist about his or her travel on a weekly basis, allowing them to improve and thereby save money on their insurance premium. Another major exponent of such data is Progressive Insurance in the U.S., which has programs active in 43 states. Its Snapshot device has been used by more than a million drivers, and its website informs customers that the in-car electronics will transmit such information as their mileage, how many times they brake, and how often they drive between midnight and 4 a.m.

However, the use of UBI may be subject to some criticism. As the information collected from insured individuals becomes more plentiful and more specific, it may become more challenging to effectively spread risks across insured groups.

The Financial Services Commission of Ontario (FSCO) is among the regulators looking at UBI programs. At a recent meeting, FSCO’s Bruce Green said the regulator was considering conditional approval for some UBI programs, which had to meet various criteria, including that rates must be reasonably predictive of risk and must distinguish fairly between risks. He added that such programs should also be voluntary and not initially be used for underwriting purposes (mid-contract or at renewal time). Insurers should also cover the costs involved.

Justin Pursaga, FCIA, FCAS, pictured, is manager of actuarial analytics at Wawanesa Mutual. So far his company has not incorporated UBI programs into its services, but he said it was "paying close attention" to this area. UBI data could provide more accurate and fairer pricing, he explained: "We use traditional rating variables like years licensed, gender, and so on, but these are just proxies for expected claims costs. Telematics [the combinations of telecommunications and data sources that make UBI programs possible] track real causative factors.

"Variables like gender and age are not controllable by the policyholder, but telematics track the way they actually drive, and studies have shown there is a resulting reduction in vehicle accidents among those who are being monitored."

Consequently, discounts and more accurate policy pricing would make insurers that offered UBI programs increasingly attractive, said Mr. Pursaga. "For the moment it is a missing variable that some companies are not using. Those who do not have these programs will inevitably suffer from adverse selection."

Marc-Olivier Faulkner, FCIA, FCAS, is actuarial senior manager in personal lines pricing for Aviva, and Chair of the CIA’s Property and Casualty Research Subcommittee. He said the subcommittee had discussed usage technology: "We are a bit skeptical about the success of this new technology in Canada but UBI would be more acceptable than using credit scores and could bring a lot of benefits to the market.

"Companies that do UBI right will have a big competitive advantage, and the most promising program so far is the one from Industrial Alliance. But that is targeted at a niche market: young drivers."

M. Faulkner added that Canadian insurers were behind their U.S. counterparts in the implementation of UBI programs, even though they had obvious benefits: "They offer you new information and show clear causal effects, which means they have a higher acceptance potential. People generally agree that if their driving is bad then they will have a higher premium."


Passing your first actuarial exam can be difficult, and achieving the top grade is harder still. So Antonio Molina (pictured) may have made history by completing both feats at the age of 16.

The Grade 11 student from Fredericton, NB, recently scored 10 in the first of the Society of Actuaries (SOA) exams, a challenge that is normally faced by third- or fourth-year university students or those on specialized actuarial programs. Although no records are kept of such statistics, CIA member Howard Slaney believes Antonio may be the youngest Canadian student to ever pass the exam.

It is partly due to Mr. Slaney, a partner at Morneau Shepell, that Antonio sat the three-hour test. Antonio—who has completed every math course offered by his school and now studies part-time at the University of New Brunswick, while still taking lessons at École Sainte-Anne—spent time job shadowing at Morneau Shepell. While he was there, Mr. Slaney mentioned the actuarial exams.

The CIA Fellow told Antonio’s local paper, the Daily Gleaner, that he was impressed to see a student performing at the same level as employees who had been there several years. He added: "He can solve problems like nobody’s business . . . I’ve been in the business for 36 years, I’ve spent my life around brilliant mathematicians because that’s who we hire into this profession. This kid is a notch above."

Following news of his achievement, Antonio, who turned 17 last month, said: "I don’t fully appreciate it at the moment. It was a challenge for me, but it feels pretty cool.

"I studied for the exam for a while, but it was still difficult. I hadn’t done all the calculus that you are expected to have done, so that did slow me up at the beginning, although I never got stuck."

Antonio told the CIA he wanted to sit the test because it represented a new challenge; he had never found math work at school very difficult, and he was enjoying his university studies, despite being much younger than his classmates, because they were "fun and challenging".

However, he said that completing the first SOA exam did not necessarily mean he wanted to become an actuary. "I like mathematics because I like seeing patterns and everything going together nicely, but I haven’t looked too far ahead. If I do choose to go along the path towards being an actuary, though, I will have done the exam already."

His friends and family have always known of his ability with numbers, and he added: "It was a bit stressful for my parents before the exam, but for them I think this is pretty normal."
Jean Framand, FCIA, FSA, who has died aged 66, worked in such fields as workplace accidents and actuarial evidence.

M. Framand graduated with a BSc in Mathematics from Université de Montréal and earned his Fellowship of the CIA in 1977. Early in his career he worked for Prudential, before becoming president of Montréal-based consulting actuaries Probatec.
CIA President Simon Curtis has joined Deloitte’s assurance and advisory practice as partner. Mr. Curtis brings deep actuarial experience to the firm, having spent the last 30 years at Manulife Financial in progressively senior roles, including more than seven years as chief actuary. Most recently, he was executive vice-president, business development.

Eric Hafeman is the new assistant vice-president of pricing and longevity, defined benefit solutions, at Sun Life Financial.

Sean Kilburn has been named senior vice-president, life insurance, at Empire Life. He formerly worked as head of insurance, warranty, gift card, and money services at Walmart Canada. Prior to that he led TD Life Group as president and CEO and Canada Trust Assurance as president.

Maryse Larouche discussed her work in the actuarial evidence practice area in a Financial Post article that comprised part of a new CIA advertising campaign. The campaign also features Minaz Lalani discussing risk management.

Ben Marshall has been appointed chief financial officer at FaithLife Financial, one of Canada’s premier fraternal insurance societies.

John McIntosh helped to explain how to transform pensions in today's collective bargaining environment in the March issue of Benefits Canada magazine.

Networking is a key part of any successful professional's career, and the CIA is offering you a fresh opportunity to inform your peers about your achievements and progress.

Our (e)Bulletin section, Actuaries on the Move, is a chance for you to publicize your new job, title, credentials or other information. This is an opportunity to tell thousands of fellow actuaries and financial professionals—whether they are ex-colleagues, former college friends, potential employers, future clients, etc.—about, for example:

  • Your new job;
  • A change of title or area of responsibility;
  • Your new qualifications;
  • A change of contact details;
  • Awards or other recognition; or
  • Publication of academic papers or articles.
Simply send an e-mail—one line of information can be enough, but feel free to add more if you so wish—to the CIA's English Editor at and we will aim to include it in the next issue of the (e)Bulletin.

For more news of CIA members and their activities, follow the CIA on Twitter.
Wanted: Student Sponsors!

The CIA is once again trying to help Jeunes Explorateurs d’un jour link up with Institute members who would like to invite a student to spend a day with them in their office. Twenty Québec high school or CEGEP students have expressed an interest in visiting actuaries for the day on April 18.

The Institute is trying to find a placement for students in the following places:
  • Montréal (5)
  • Montérégie (Longueuil) (2)
  • Laurentides (Saint-Donat, Ste-Agathe or around these municipalities) (1)
If you are interested in sponsoring one or more of these students, please visit or contact Jean-David Tremblay at 418-643-3673, or at We ask that you also let the CIA Head Office know that you have volunteered by contacting Josée Gonthier at 613-236-8196 ext. 106.

Contact with Questions: Josée Gonthier, French editor, at 613-236-8196 ext. 106 or

Exciting Volunteer Opportunity – Task Force on Mentoring

Are you interested in:
  • Ongoing career development through mentoring?
  • Being a mentor?
  • Being a protégé?
If you answered YES to any of the above, you should consider volunteering for the Task Force on Mentoring.

The task force, chaired by Sharon Giffen, FCIA, and supported by the membership, education, and professional development department, is looking for three to five additional members (Fellows and Associates) to help build the CIA’s inaugural mentoring program.

Volunteers are required to help build the parameters of the program, and to help recruit mentors and protégés between now and June 2013. They may also participate in the pilot program as a mentor or protégé, beginning in September 2013 and continuing until June 2014.

This is an exciting, short-term opportunity to contribute to the CIA and to help members reach their career development goals. If you are interested, please contact: Alicia Rollo, CHRP, director of membership, education, and professional development, at; or Sharon Giffen at

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

AcSB Staff Financial Reporting Commentary, "Reporting Employee Future Benefits by Not-for-Profit Organizations"

In January 2013, the Canadian Accounting Standards Board (AcSB) staff issued the financial reporting commentary, "Reporting Employee Future Benefits by Not-for-Profit Organizations." It discusses details on a proposed new standard to be developed on this topic for not-for-profit organizations and what to do until it is finalized. It is available here.

Contact with Questions: Nancy Estey, principal, AcSB, at

Canadian Individual Critical Illness Insurance Morbidity Experience Between Policy Anniversaries in 2002 and 2007 Using Expected CIA Incidence Tables From July 2012

This is the first report submitted by the Individual Living Benefits Experience Subcommittee of the CIA Research Committee detailing the intercompany morbidity experience for Canadian individual critical illness (CI) insurance policies.


Contact with Questions: Benoit Miclette, Chair, Individual Living Benefits Experience Subcommittee, at

Educational Note Supplement: Guidance for Assumptions for Hypothetical Wind-Up and Solvency Valuations with Effective Dates between December 31, 2012, and December 30, 2013


The purpose of this memorandum is to provide preliminary guidance from the Committee on Pension Plan Financial Reporting (PPFRC) for estimating the cost of purchasing group annuities for purposes of hypothetical wind-up and solvency valuations with effective dates of December 31, 2012, and later (but no later than December 30, 2013). Since this guidance may have an effect on valuations currently in preparation with an effective date of December 31, 2012, or later, the guidance is being released on an expedited basis in advance of formal approval by the Practice Council of a planned educational note.


An educational note was published in May 2012 on assumptions for hypothetical wind-up and solvency valuations with effective dates between December 31, 2011, and December 30, 2012. Over the course of 2012, the PPFRC reviewed its guidance on the cost of purchasing group annuities on a quarterly basis. The most recent update to the guidance was contained in an educational note supplement issued on December 4, 2012, and was effective as of September 30, 2012. That guidance concluded that for valuations with effective dates on and after September 30, 2012, an appropriate discount rate for estimating the cost of purchasing a non-indexed group annuity would be determined as the unadjusted average yield on Government of Canada (GoC) marketable bonds with maturities over 10 years (CANSIM series V39062) increased arithmetically by 70 basis points (bps), in conjunction with the UP94 generational mortality tables. That guidance applied to both immediate and deferred pensions and also applied regardless of the overall size of a group annuity purchase.


This guidance is partially based on quotes provided by eight insurance companies on illustrative group annuity business using pricing conditions at December 31, 2012. These data were collected on the same basis as the illustrative quotes as of December 31, 2011 (as described in the May 2012 educational note), and the methodology used is consistent with the methodology adopted as of each quarter end in 2012. The illustrative quote information was supplemented with data on the pricing of actual group annuity purchases during the fourth quarter of 2012 provided by certain actuarial consulting firms.


The results of the illustrative non-indexed quotations at December 31, 2012, based on the UP94 generational mortality tables, are summarized below and compared to the previous illustrative quote information provided by the insurers as at September 30, 2012.

  Large Purchase
Small Purchase
• Discount rate
• Spread over CANSIM V39062
+ 0.64%
+ 0.60%
+ 0.72%
+ 0.75%
Deferred vesteds
• Discount rate
• Spread over CANSIM V39062
+ 0.99%
+ 0.88%
+ 1.01%
+ 0.98%
• Discount rate
• Spread over CANSIM V39062
+ 0.73%
+ 0.66%
+ 0.92%
+ 0.89%

If considered in isolation, over the three-month period ending December 31, 2012, the illustrative quotes may indicate a slight decrease in the spread of the discount rates over the unadjusted average yield on GoC marketable bonds with maturities over 10 years (CANSIM V39062), in conjunction with the UP94 generational mortality tables.

The actual group annuity purchase data obtained by the PPFRC for the fourth quarter of 2012 were also considered. In particular, the data on the actual purchases of non-indexed annuities during the months of November and December 2012 that were available to the PPFRC produced an average spread of approximately 75 bps above the prevailing unadjusted yield on GoC long-term bonds (CANSIM series V39062).

While the illustrative quotes do indicate differences in the pricing for immediate and deferred annuities, some of the insurers provide their quotes on the basis that the immediate and deferred annuities are comingled in the same purchase. As such, the illustrative quotes are also shown above on a combined basis. It is recommended that this information be interpreted with caution as the actual weighting between retirees and deferred annuitants can vary by annuity purchase. In particular, the illustrative group for the small annuity purchase includes a high portion of deferred annuitants. (Information on the characteristics of the illustrative quotes can be found in the May 2012 educational note.) As a result, and based on both the illustrative quotes and the actual group annuity data, the PPFRC has concluded that it would not be appropriate at this time to differentiate the guidance on pricing of group annuities for large and small annuity purchases, and immediate and deferred annuities.


Based on the analysis described above, the PPFRC has concluded that, for valuations with effective dates on and after December 31, 2012, but no later than December 30, 2013, 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 series V39062) increased arithmetically by 70 bps, in conjunction with the UP94 generational mortality tables. This guidance applies to both immediate and deferred pensions and also applies regardless of the overall size of a group annuity purchase.


As at December 31, 2012, the unadjusted CANSIM V39062 rate was 2.26%. This rate would form the basis for developing an appropriate underlying discount rate for valuations of non-indexed group annuities with effective dates of December 31, 2012. Prior to rounding, an applicable underlying discount rate would then be determined as 2.26% + 0.70% = 2.96%.


As in prior years, data regarding the pricing of actual annuities indexed to the Consumer Price Index (CPI) are extremely limited. In most cases, the contributing insurers did provide illustrative quote data for the sample blocks on a CPI-indexed basis. It may be noted that the premiums for the illustrative quotes on this and prior occasions are substantially higher than the guidance provided by prior educational notes.

The PPFRC is conducting further research regarding the pricing of indexed annuities. The analysis includes confirmation as to whether the insurers would be willing to actually transact on the basis reflected in the illustrative annuity quotes. This research may result in the revision of future guidance for estimating the cost of purchasing indexed annuities.

Accordingly, an acceptable proxy for estimating the cost of purchasing a group annuity where pensions are fully indexed to the rate of change in the CPI would be the unadjusted yield on GoC real-return long-term bonds (CANSIM series V39057) in conjunction with the UP94 generational mortality tables. This guidance applies to both immediate and deferred pensions and also applies regardless of the overall size of a group annuity purchase.

In situations where pensions are partially indexed, indexed to a measure other than the CPI or contain a deferred component, the actuary would make appropriate provisions for such situations consistent with the guidance provided in the May 2012 educational note and other relevant educational notes.


The purpose of this educational note supplement is to provide actuaries with guidance related to the establishment of assumptions for hypothetical wind-up and solvency valuations. It is worth noting that the pricing for an actual group annuity purchase depends on many factors, with the result that the actual price may differ from the guidance provided herein. Some of the factors that may affect pricing of a particular purchase include, but are not limited to:
  • The duration of the pensions being purchased;
  • The proportion of deferred vested members included in the group being purchased;
  • The average pension amount for the pensions being purchased;
  • The mortality experience anticipated by the insurance companies bidding on the purchase; and
  • Competitive pressures in the group annuity market at the time of the purchase.

The PPFRC is preparing its annual educational note on this topic reflecting the above analysis.

The PPFRC intends to continue monitoring group annuity pricing on a quarterly basis. Actuaries may use the spreads indicated above for valuations with effective dates on and after December 31, 2012, up to December 30, 2013, pending any future guidance or other evidence of change in annuity pricing.

The PPFRC is reviewing several aspects of group annuity purchase pricing which may result in future revisions to its guidance. In particular:
  • Duration: the PPFRC has observed that the duration of obligations being purchased may have had a significant effect on annuity pricing during 2011 and 2012. The differential in the hypothetical annuity quotes between deferred vested and retired members may be related to differences in the duration of the obligations of each group. Future guidance may better reflect the effect of the duration of the obligations being valued.
  • Indexed annuities: the PPFRC’s review includes confirmation that the insurers would be willing to actually transact on the basis reflected in the illustrative annuity quotes for indexed pensions provided to the PPFRC and the relationship between indexed annuity premiums and yields on GoC real-return long-term bonds.
  • Underlying basis: currently, the annuity guidance is expressed as a spread over yields on GoC long-term bonds in conjunction with the UP94 generational mortality tables, irrespective of the basis used by insurers when submitting quotes. The PPFRC is exploring whether other bases may be more appropriate to provide more stability in the resulting spread.
  • Alternative settlement methods: on December 14, 2012, the CIA published a draft educational note on alternative settlement methods for hypothetical wind-up and solvency valuations, which may also result in future guidance for plans affected by capacity constraints within the Canadian group annuity purchase market.
It may be noted that the spreads versus GoC long-term bonds for group annuity pricing have been volatile during the past three to four years. Actuaries may wish to be mindful of this volatility when communicating advice related to future hypothetical wind-up and solvency valuations.

The PPFRC would like to express its gratitude to BMO Insurance, The Co-operators, Desjardins Financial Security, Great-West Life, Industrial Alliance, Manulife, Standard Life, and Sun Life Financial for providing the committee with the data required to issue this guidance.

Contact with Questions: Gavin Benjamin, Chair, Committee on Pension Plan Financial Reporting, at

ERM Symposium Registration Goes Live

Members can now register for the Enterprise Risk Management (ERM) Symposium online. Information about the symposium sessions and speakers is available as well as material on the pre-symposium seminars.

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

CIA Advertising Campaigns

The CIA is launching two advertising campaigns this year. The first is aimed at online readers of the Financial Post (FP), debuting today, La Presse (beginning February 25) and subscribers to a newsletter from Les (distributed at the end of March). These ads and features will stay in place 24/7 until the end of March.

There are a number of animated ads that appear on pages of the FP that lead visitors to either the Leadership in HR or Risk Management sections. On these pages, there are more animated ads, and links to several CIA website pages and documents.

In addition, two articles are being written and posted to the pages, one on risk governance featuring Minaz Lalani, and one on actuarial evidence actuaries with Maryse Larouche.

La Presse will have a number of the CIA’s animated ads and the Institute will have prime locations on a dozen La Presse electronic newsletters that will be circulated over the next six weeks.

Another element of this campaign is with Les, which circulates a newsletter to 10,000 subscribers. We have an opportunity to fill this newsletter with stories and content on the profession.

Finally, we are going to be advertising in English and French media aimed at lawyers (details still being refined). The intent is to make sure that lawyers become familiar with actuaries and what actuarial evidence actuaries can deliver for them. Stay tuned for more details.

Risk Management

Contact with Questions: Les Dandridge, director, communications and public affairs, at 613-236-8196 ext. 114 or

Final Standards for Practice-Specific Standards on Insurance Contract Valuation (Section 2300) to Narrow the Range of Practice on Certain Elements

The attached final standards were approved by the Actuarial Standards Board on January 31, 2013. The revisions clarify the standards in certain areas of life and health insurance contract valuation, specifically with regard to assumptions for non-fixed income asset classes where reliable historical data are not available, considerations where regulatory approval is required on adjustable products, and policyholder behaviour assumptions.

The effective date of the final standards is March 15, 2013.

Standards of Practice

Contact with Questions: Ty Faulds, Chair, Designated Group, at

Final Standards – Introduction of Standards Relating to Appointed Actuary Opinions with Respect to Use of Internal Models to Determine Required Capital for Segregated Fund Guarantees

The attached final standards were approved by the Actuarial Standards Board on January 31, 2013. They provide model wording for the Appointed Actuary opinion relating to models used to determine required capital for segregated fund guarantee risks, clarifying that the actuary would be opining on the compliance with the requirements of the regulator.

The effective date of the final standards is February 7, 2013.


Standards of Practice

Contact with Questions: Stephen Haist, Chair, Designated Group, at

Revised Policy on Due Process for the Approval of Guidance Material other than Standards of Practice

This document, which was recently revised by the Practice Council, describes the Institute’s process for the approval of guidance material, other than Standards of Practice (i.e., educational notes, educational note supplements, research papers, and committee and task force reports), and outlines the roles and responsibilities of the Practice Council, Actuarial Standards Board, and committees and task forces that develop the guidance material.

December 2012 Risk Management Newsletter Now Available in Both Official Languages

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

Link: click here

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

Invitation to Small-Firm Practitioners: Monthly Meeting in Milton, ON

The Independent Actuaries Network (IAN) is inviting small-firm practitioners to join its monthly dinner and meeting held in Milton, Ontario. They run on the last Tuesday of each month and begin with a social hour and buffet dinner at 6 p.m., followed by a meeting until 9 p.m. Each month one or more presenters tackle topics of interest to actuaries, including pension and actuarial evidence as well as broader subjects like enterprise risk management. The network also hosts an annual visit by the CIA President-Elect.

These meetings are an excellent form of structured continuing professional development, and regularly attract 25–35 people. The next speaker is:
  •   April 30—Barry Gross of Aon Hewitt, "Target Benefit Plans".
Actuaries interested in attending or interested in being added to the IAN’s automated invitation list can contact Andrew Gillies at

Contact with Questions: Andrew Gillies at
Calendar of Events
April 9, 2013
Professionalism Workshop InterContinental Hotel Toronto, ON
May 24, 2013
Professionalism Workshop Holiday Inn
Toronto International Airport

Toronto, ON
June 2-5, 2013
Practice Education Course
Delta Ottawa City Centre
Ottawa, ON
June 19, 2013
Professionalism Workshop Hilton Montreal Bonaventure Montréal,
June 20-21,
Annual Meeting
Hilton Montreal Bonaventure Montréal,
September 20-21, 2013
Actuarial Evidence Seminar
ITHQ – Québec Tourism and Hotel Institute
September 26-27, 2013
Seminar for the Appointed Actuary
Hilton Montreal Bonaventure Montréal,
November 12, 2013
Pension Seminar
Metro Toronto Convention Centre
Toronto, ON
November 13, 2013
Investment Seminar
St Andrew’s Club & Conference Centre
Toronto, ON
June 18-19, 2014
Annual Meeting
Hyatt Regency Hotel
Vancouver, BC
June 17-18, 2015
Annual Meeting
Westin Ottawa
Ottawa, 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 following people have been appointed to the (sub)committees and task forces named below:
  • Accreditation: John Dark (Vice-chair) and Cara Low.
  • Task Force on Canadian Eligibility Requirements: Bruce Langstroth, retroactive to November 1, 2012.
  • Pension Subcommittee of the Committee on Continuing Education: Jean-François Poitras, retroactive to November 27, 2012.
  • P&C Subcommittee of the Committee on Continuing Education: Nathalie Bégin (Chair), Rachel Dutil, Lisa Guglietti, Fiona So, and Ming Zheng. Note: the Eligibility and Education Council has approved the subcommittee’s membership for 2012–2013, retroactive to November 27, 2012. The new members being approved are Lisa Guglietti, Fiona So, and Ming Zheng.
  • Practice Education Course Organizing Committee: Thomas Hinton (Chair), Stephen Cheng, Wes Foerster, and Bruce Langstroth, effective January 1, 2013.
  • 2013 Practice Education Course exam subcommittees:
    • Retirement Benefits: Stephen Cheng (Chair), Mark Campbell, Corinne Escaravage, Murray Ferguson, Karen Kulchyski, Alexandre Larose, Katie McElwain, Bryan Merida, Haripaul Pannu, Jean-François Poitras, Shannon Tesluck, Don Tettmar, Henry Yuen, and Alexandru Zaharia. Note: the new members being approved are Mark Campbell, Murray Ferguson, Karen Kulchyski, Alexandre Larose, Katie McElwain, Bryan Merida, Shannon Tesluck, Don Tettmar, and Henry Yuen.
    • Group Benefits: Bruce Langstroth (Chair), Ken Chin, Mike Correa, Erin Crump, Loretta Di Caro, Bruno Gagnon, Lyna Gendron, Martin Laframboise, Linda Maillet, and René Norena.
    • Individual Life and Annuities and Finance/Investment: Wes Foerster (Chair), Alan Bates, Luc Bergeron, Melissa Bui, Ahwaz Chagani, Mark Edwards, Frédéric Jacques, Mark Jarvis, Jennie Leung, Alanna Rand, David Stalker, Carole Vincent, and Si Xie. Note: the new members being approved are Ahwaz Chagani, Mark Jarvis, Jennie Leung, Alanna Rand, and Si Xie.
Pierre-Paul Renaud has been appointed as the CIA Liaison to the Society of Actuaries’ General Insurance Committees, effective immediately.

David Landriault has been appointed as the Accreditation Actuary at the University of Waterloo, retroactive to January 1, 2013.

For information only:

The following people have left the (sub)committees named below, and leave with thanks from the Institute:
  • Accreditation: Neville Henderson and Amy Pun;
  • P&C Subcommittee of the Committee on Continuing Education: Fengru Liu and Xavier Bénarosch;
  • PEC Organizing Committee: Bruno Valdevit;
  • Retirement Benefits Subcommittee for the 2013 Practice Education Course: Nikolina Gateva, Jared Mickall, Bruno Valdevit, and Tulio Walles; and
  • Individual Life and Annuities and Finance/Investment Subcommittee for the 2013 Practice Education Course: Steve Sullivan, Myriam Roux, Blake Hill, Carol Moellers, and Julia Viinikka.

Member Services Council

The following people have been appointed to the (sub)committees named below:

  • Annuitant Experience Subcommittee of the Research Committee: Mark Harazny (not enrolled with the CIA), effective immediately; and Diana Pisanu (Chair), effective February 1, 2013;
  • Individual Living Benefits Experience Subcommittee of the Research Committee: Benoit Miclette (Chair), effective June 1, 2012;
  • Research: Benoit Miclette, effective June 1, 2012; and Diana Pisanu, effective February 1, 2013; and
  • Volunteer Initiatives: Minnie Green (Vice-chair), effective immediately.

For information only, regarding subcommittees of the Research Committee:

  • Annuitant Experience: Paul Gobeil and Sherry Xie have resigned as members, effective immediately, and Julie Chambers has completed her mandate as chair. All leave with the subcommittee’s thanks.
  • Individual Living Benefits Experience: Graham Dixon has resigned, effective immediately, and leaves with the subcommittee’s thanks.