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Joint Risk Management Section – Call for Essays

The Joint Risk Management Section (JRMS) of the Canadian Institute of Actuaries, Society of Actuaries and Casualty Actuarial Society, in collaboration with the International Network of Actuaries in Risk Management, propose publishing a third series of essays, focusing on Risk Metrics for Decision Making and ORSA.

The National Association of Insurance Commissioners is discussing a proposal that would require large insurer groups to perform an own risk and solvency assessment (ORSA), defined as a process undertaken by an insurer or an insurance group to assess the adequacy of its risk management and current and future solvency position.

The JRMS is inviting the submission of essays that explore such issues as:
  • What questions must a company ask under an ORSA?
  • How can a company better understand its own risks?
  • Is an economic capital model required to perform an ORSA?
  • Who are the stakeholders?
Each essay should be no more than 1,500 words, written in French or English, and submitted no later than Friday, December 2, 2011 to smartz@soa.org. Awards of up to $1,000 may be presented for worthy papers.

For more information, and to read the JRMS’ first two e-books of essays, see the links below.

Further details.

First e-book, Risk Management: The Current Financial Crisis, Lessons Learned and Future Implications.

Second e-book, Risk Management: Part Two – Systemic Risk, Financial Reform, and Moving Forward from the Financial Crisis.

Contact with Questions: David Schraub at David.Schraub@avivausa.com or Robert Wolf at rwolf@soa.org

CIA Investment Seminar – Both Pension and Insurance Topics Covered

The CIA Investment Seminar is back. This year it will be held at the Doubletree by Hilton Hotel Toronto Airport on November 3, 2011.


Don’t miss this interesting and informative program, which will cover insurance subjects such as Credit Risk in Insurance Companies and Managing Insurance Assets under Solvency II, as well as pension topics. Further program details are available at the link below.

You can register by fax, by mail, or online with our secure transaction registration form.


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

CIA Pension Seminar

The CIA Pension Seminar will be held at the Doubletree by Hilton Hotel Toronto Airport on November 2, 2011.

Don’t miss out on this opportunity to participate in informative sessions examining such topics as the Canadian annuity market, marriage breakdown and Ontario’s Bill 133, the limitations of traditional replacement rates, and accounting valuation issues.

You can register by fax, by mail, or online with our secure transaction registration form.

Link: http://www.actuaries.ca/meetings/pension/2011/program_e.asp

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

Final Standard of Practice for General Standards – Recognizing Events in Work

The final revisions to the Standards of Practice were approved by the Actuarial Standards Board on August 23, 2011. The final standard amends the definition of subsequent event, introduces new subsection 1515, and amends subsections 1520 and 1820.

The revisions to the Standards of Practice are effective October 1, 2011.

Since the changes to the Standards of Practice do not represent substantive changes from the existing Standards of Practice, but rather are a rewriting of them to improve their clarity, early implementation of the final Standards of Practice is permitted.

Final Standards of Practice (red-lined).
Final Standards of Practice (clean).
Memorandum.

Contact with Questions: Stephen Butterfield, Chair, Designated Group, at stephen.butterfield@towerswatson.com

CIA President Before the House of Commons Standing Committee on Finance

CIA President Jim Christie and Board member Michel St-Germain will appear before the House of Commons Standing Committee on Finance for pre-Budget consultations on Thursday, September 29, 2011 at 11:30 a.m. EDT. They will discuss Pooled Registered Pension Plans (PRPPs) and potential actuarial involvement in healthcare.

Members can watch the proceedings using the link below.

Link: click here then select Play, Download or Subscribe.

Contact with Questions: Josée Racette, project manager, communications and public affairs, at josee.racette@actuaries.ca

Submission to the Department of Finance Canada

The Canadian Institute of Actuaries has presented its comments regarding the Department of Finance Canada consultation document Tax Rules for Pooled Registered Pension Plans (PRPPs).

Link: http://www.actuaries.ca/members/publications/2011/211090e.pdf

Contact with Questions: Marc-André Melançon, Chair, Member Services Council, at mamelancon@rgare.ca

Webcast: Economic Roundtable

October 19, 2011
Noon to 1:30 p.m. EDT

Speakers
  • Nadine Gorsky, moderator, Chair of the Committee on Continuing Education’s Investments Subcommittee and an actuarial specialist at OSFI
  • Allan Seychuk, vice-president, economics and institutional portfolio management, Phillips, Hager & North Investment
  • Stephen Gordon, professor, department of economics, Université Laval
  • Gavin Benjamin, Chair, Committee on Pension Plan Financial Reporting (PPFRC), and senior consultant, Towers Watson
  • Edward Gibson, Chair, Committee on Life Insurance Financial Reporting (CLIFR), and senior vice-president and chief actuary at Empire Life
More than ever, the economic environment is seen as the major risk factor for pension plans and insurance companies. In 2008 we passed through the worst financial downturn since the Great Depression. In early 2009, the CIA sponsored our first Economic Roundtable webcast to a favourable reception. Now, when the economy appears to be entering a new era of uncertainty, it is crucial that actuaries continue to explore the fundamentals driving it and the financial markets. Actuarial work has always been cross-disciplinary, so the purpose of this webcast is to develop expertise in the economics branch of our discipline. This is your chance to hear from two economists—one working in a Canadian investment management firm and the other a professor at a Canadian university—who will share their insights about recent economic circumstances and future prospects. You will also hear from the chairs of the PPFRC and CLIFR, who will explore the meaning of these circumstances in the context of pension plan and life insurance actuarial work.

Please take advantage of this exciting opportunity for an important dialogue between economists and actuaries.

Link:
http://www.actuaries.ca/webcasts/index_e.cfm (members must first log in to the members site to receive member pricing.)

Contact with Questions: Leona Campbell at leona.campbell@actuaries.ca; telephone: 613-236-8196 ext. 124; fax: 613-233-4552

Webcast: Emerging Risks of Grave Importance: Providing Clarity and Understanding

October 13, 2011

Noon to 1:30 p.m. EDT

Speaker: Alan D. Roth, chief risk officer, Advanced Fusion Systems

This webcast will offer a detailed look at emerging risks including solar storms (including electromagnetic pulse), extreme weather events, water scarcity, food scarcity, cyber threats, climate change, pandemics, and earthquakes/tsunamis.

Most of these have a black swan aspect to them. We generally just go on with life with the expectation that we will be OK. It is unlikely we will suffer the full impact from any one of these risks, at least for the near future, and we are busy with life as it is. But those who are risk averse, along with some government agencies and insurance companies, are starting to look at these more closely and are trying to assess probability. Unfortunately, such assessment is difficult as there is conflicting information and many unknowns. Also, Canada has exceptional vulnerability for some of these risks, which will be addressed.

To register for this and other CIA webcasts, please click on the link below.

Link: http://www.actuaries.ca/webcasts/index_e.cfm (members must first log in to the members site to receive member pricing.)

Contact with Questions: Leona Campbell at leona.campbell@actuaries.ca; telephone: 613-236-8196 ext. 124; fax: 613-233-4552

Webcast—Killer Risks: Torpedoes in the Water

Wednesday, September 28, 2011
Noon to 1:30 p.m. EDT

Speaker: Sim Segal, president, SimErgy Consulting

There are several killer risks that most organizations commonly overlook. In this webcast, we identify these risks, discuss their root causes and characteristics, and offer suggestions on how to mitigate them.

Link:
click here (members must first log in to the members site to receive member pricing).

Contact with Questions: Leona Campbell, coordinator, eligibility and education, at leona.campbell@actuaries.ca

Revised Exposure Draft for Standards of Practice – Ratemaking: Property and Casualty Insurance (Section 2600)

The revised exposure draft for Standards of Practice – Ratemaking: Property and Casualty Insurance (section 2600) was approved for distribution by the Actuarial Standards Board (ASB) on September 20, 2011.

The ASB is soliciting comments on the changes from the original exposure draft from members of the CIA and other stakeholders. Comments should be directed to Shams Munir at shams.munir@ca.ey.com with a copy to Chris Fievoli, CIA resident actuary, at chris.fievoli@actuaries.ca, by October 31, 2011.

Link: http://www.actuaries.ca/members/publications/2011/211089e.pdf

Contact with Questions: Shams Munir, Chair, Designated Group, at shams.munir@ca.ey.com

Key Partnership Between Natcan Investment Management and the Canadian Institute of Actuaries

Montréal, September 21, 2011 – Natcan Investment Management Inc. (Natcan) and the Canadian Institute of Actuaries (CIA) are pleased to announce their new partnership to develop an accounting discount curve.


Natcan’s CIA Method Accounting Discount Rate Curve will help support Canadian actuarial practice by providing a benchmark for the valuation of pension and benefit plan liabilities. The curve will be available on Natcan’s website: www.natcan.com.

Natcan’s collaboration with the CIA demonstrates its commitment as a leading provider of specialized investment solutions and its desire to meet the needs of pension and benefit plan sponsors.

About Natcan Investment Management Inc.

Founded in 1990, Natcan Investment Management Inc. is a National Bank subsidiary that is 14% held by its management team. Recognized as an important institutional fund manager in Canada, Natcan Investment Management specializes in portfolio management for pension funds, endowment funds, pooled funds and wealth management. As at June 30, 2011, it had approximately $26 billion in assets under management and employed over 100 employees. For more information about Natcan, please visit its website: www.natcan.com.

Information

Natcan Investment Management point of contact: Michael Quigley, senior vice-president of distribution, at mquigley@natcan.com or (514) 871-7671.

CIA point of contact: Josée Racette, project manager, public affairs, at josee.racette@actuaries.ca or (613) 236-8196, ext. 107.

Educational Note – Accounting Discount Rate Assumption for Pension and Post-employment Benefit Plans

This educational note offers advice to pension actuaries who are engaged to provide guidance to a pension plan sponsor on the selection of the discount rate for a Canadian pension plan under Canadian, U.S., or international accounting standards.


Also, Natcan Investment Management (Natcan) and the Canadian Institute of Actuaries (CIA) are pleased to announce their new partnership to develop an accounting discount rate curve. Natcan’s CIA Method Accounting Discount Rate Curve, which is available for download at http://www.natcan.com, will help support Canadian actuarial practice by providing a benchmark for the valuation of pension and benefit plan liabilities.

Links:


CIA/Natcan Accounting Discount Curve: http://www.natcan.com

Contact with Questions: Gavin Benjamin, Chair, Task Force on Pension and Post-retirement Benefit Accounting Discount Rates, at gavin.benjamin@towerswatson.com

August 2011 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 jointly 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 establish leading risk management techniques.

Link: click here.

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

Minor Amendment to the Standards of Practice for the Valuation of Pension Plans (Subsection 3260) – French version

The revised Standard of Practice for the French version of subsection 3260 was approved by the Actuarial Standards Board (ASB) on August 23, 2011. Changes are highlighted against the current Standards of Practice [French version only].

The effective date of the revised Standard of Practice is September 1, 2011.

Link:
http://www.actuaries.ca/members/publications/2011/211083e.pdf

Contact with Questions: Dave Pelletier, Chair, Actuarial Standards Board, at dave@davep.ca

Educational Note Supplement: Guidance for Assumptions for Hypothetical Wind-up and Solvency Valuations Update – August 2011

The most recent guidance from the Committee on Pension Plan Financial Reporting (PPFRC) regarding assumptions for hypothetical wind-up and solvency valuations was provided in an educational note supplement dated June 7, 2011.

The June 7, 2011 guidance as to estimated purchase costs for non-indexed group annuities was partially based on quotes provided by six insurance companies on illustrative group annuities using pricing conditions as at March 31, 2011, and supplemented by data from certain actuarial consulting firms on actual group annuity purchases during the first and early second quarters of 2011.

In an effort to continue to monitor group annuity pricing, the PPFRC obtained illustrative quotes on a similar basis to those obtained at March 31, 2011, but based on pricing conditions as at June 30, 2011. The illustrative non-indexed quotations at March 31, 2011 and June 30, 2011 may be summarized as follows:

AVERAGE OF THE THREE MOST COMPETITIVE QUOTES
(USING UP94 GENERATIONAL MORTALITY TABLES)
  Large Purchase
Small Purchase
  31/03/2011
30/06/2011
31/03/2011
30/06/2011
Retirees
       
Discount rate
4.43%
4.05%
4.48%
4.12%
Spread over CANSIM V39062
+0.73% 
+ 0.56% 
+0.78%
+ 0.63%
Deferred vesteds
       
Discount rate
4.50%
4.14%
4.48%
4.11%
Spread over CANSIM V39062 + 0.80% 
+ 0.65% 
+ 0.78% 
+ 0.62%
   
If considered in isolation, the illustrative quotes suggest a decrease in the excess (spread) of the average of the discount rates for the insurers that provided the three most competitive quotes, in conjunction with the UP94 mortality table with generational projection (using improvement Scale AA), over the yield on Government of Canada (GoC) long-term bonds (series V39062). However, the June 7, 2011 guidance supplemented the March 31, 2011 illustrative quotes with data on recent actual annuity purchases and recommended a spread of 70 basis points (bps), which is slightly lower than the spread suggested solely based on the March 31, 2011 illustrative quotes.

The actual group annuity purchase data obtained by the PPFRC for the second and early third quarters of 2011 were very limited but, nonetheless, did not exhibit any pattern which caused the PPFRC to conclude that the June 7, 2011 guidance has become inappropriate. Accordingly, and given the relatively modest change in the spreads that may be suggested by the June 30, 2011 illustrative quotes, the PPFRC has decided that there is not sufficient evidence at this time to warrant changing the guidance provided in the June 7, 2011 educational note.

Link: http://www.actuaries.ca/members/publications/2011/211087e.pdf

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

Notice of Intent Regarding Standards of Practice for Modelling – A New Section Added to the General Section of the Standards of Practice

The creation and use of models is inherent to actuarial work. The Actuarial Standards Board (ASB) believes that developing Standards of Practice for the use of models would help to promote high-quality work and to enhance the capability of the actuarial profession in this area. The new Standards of Practice would address appropriateness, controls, reliance and disclosure issues for the use of models.

The ASB is soliciting feedback on this notice of intent from members of the CIA and other stakeholders. Comments are invited by October 31, 2011. Please send your comments, preferably in an electronic format, to Richard Gauthier at richard.gauthier@ca.pwc.com, with a copy to Chris Fievoli at chris.fievoli@actuaries.ca.

Link:
http://www.actuaries.ca/members/publications/2011/211086e.pdf

Contact with Questions: Richard Gauthier, Chair, Designated Group, at richard.gauthier@ca.pwc.com

Submission to the House of Commons Standing Committee on Finance

The Canadian Institute of Actuaries provided input to the 2011 pre-budget consultations being undertaken by the House of Commons Standing Committee on Finance.

Link: http://www.actuaries.ca/members/publications/2011/211082e.pdf

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

Draft Educational Note: Guidance on Fairness Opinions Required Under the Insurance Companies Act

With the changes made to the Insurance Companies Act as a result of Bill C-57 (2005) there are new governance requirements for boards of directors with respect to dividend policies, management of the participating accounts and changes to adjustable policies. The same legislation imposed on appointed actuaries the requirement to opine on the fairness of those policies and management practices. The CIA’s Task Force on Bill C-57 is preparing an educational note to assist the actuary in forming these fairness opinions.


A draft of this educational note is being published as a working document, currently available only on the Task Force on Bill C-57’s webpage. It will be officially published as an educational note once input has been received from members and other interested parties. A particular opportunity to comment will be provided at the panel session devoted to this topic during the upcoming Seminar for the Appointed Actuary.

Link: click here.

Contact with Questions: Nick Bauer, Chair, Task Force on Bill C-57, at nbauer@eckler.ca

Final Standards of Practice Concerning Revision of Subsection 2460, Report to the Directors, of the Standards of Practice, Part 2000, Practice-Specific Standards for Insurance, Incorporation of Standard Wording for Fairness Opinions

This final revision of subsection 2460 of the Standards of Practice was approved by the Actuarial Standards Board (ASB) on August 23, 2011.


Since the fairness opinions potentially would be available to the public, the ASB considers it desirable to standardize the language of unqualified fairness opinions. The objective is to ensure that opinions are unequivocal and uniform, that the interpretation by the public of such opinions of appointed actuaries is therefore consistent, and that the potential misinterpretation arising from minor differences in language among opinions intended to convey the same message is obviated.

The effective date for both the legislation and the final Standards of Practice is December 1, 2011. Early implementation is therefore permitted.

Links:

Final Standards of Practice.
Memo.

Contact with Questions: Nick Bauer, Chair, Designated Group, at nbauer@eckler.ca

Enterprise Risk Management Workshop: November 15, 2011: Registration Open

Registration is now open for the Enterprise Risk Management (ERM) Workshop on November 15 at the Metro Toronto Convention Centre, North Building, 225 Front Street West, Toronto.

This workshop will feature Sim Segal, president of SimErgy Consulting and a globally-recognized ERM thought leader. His book Corporate Value of Enterprise Risk Management was recently adopted for the Chartered Enterprise Risk Analyst (CERA) syllabus.

The first 30 registrants will receive a complimentary, autographed copy of Mr. Segal’s book.

Link: http://www.actuaries.ca/meetings/ERM/2011/erm_program_e.cfm

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

Webcast—Managing and Measuring Segregated Fund Guarantee (Variable Annuity) Risks

Tuesday, September 13, 2011

Noon to 1:30 p.m. EDT

Speakers:
  • Jonathan Edwards, senior capital markets analyst, OSFI
  • Mark Evans, vice-president and actuary, Aegon USA
  • Josh Braverman, SVP, head of derivatives, AXA Equitable
Segregated fund guarantees are a significant element of the strategy and risk profile within the Canadian life insurance industry. This webcast highlights the important considerations when managing and measuring the risks associated with these guarantees, including the following topics:

  • Governance and Oversight of Market Risk at Insurance Companies—A Regulatory Perspective
  • Market risks of variable annuities;
  • Reviewing roles and responsibilities of key stakeholders; and
  • Risk oversight, risk measurement and risk reporting.
  • Segregated Fund Hedging Fundamentals
  • Risks;
  • Hedge considerations;
  • Attribution;
  • Hedge effectiveness; and
  • Hedge objective.
  • Effective Product Design for Hedging and Hedging Volatility Exposures
Target level of expertise: moderate.

Link: click here
(members must first log in to the members site to receive member pricing).

Contact with Questions: Leona Campbell, coordinator, eligibility and education, at leona.campbell@actuaries.ca
 

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