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ICA 2014 Call for Papers and Presentations

Join your actuarial colleagues and peers from around the world for the International Congress of Actuaries (ICA) 2014, to be held March 30–April 4 in Washington, DC.

The ICA 2014 Scientific Committee is assembling an agenda of topical sessions on key issues facing actuaries, and has issued a Call for Papers and Presentations which is now available at

Anybody interested in presenting a paper or making a presentation is invited to submit an abstract to the Scientific Committee by September 30, 2012.

The 2014 congress’ theme is "Learn, Interact, Grow", and the committee’s goal is to provide an environment where attendees can learn new ideas by sharing concepts and approaches while growing the body of actuarial knowledge and improving the tools used in an actuary's daily practice.


Contact with Questions
: David Core, ICA 2014 Secretariat, at

Joint Project Publishes Research Paper on Deflation/Inflation

The North American Actuarial Council Collaborative Research Group—a joint initiative between the CIA, Society of Actuaries (SOA) and Casualty Actuarial Society—has published a research paper examining the impact of inflation upon an economy and the property/casualty and life insurance industries.

The 30-page paper, entitled The Effect of Deflation or High Inflation on the Insurance Industry, highlights the potential for decreased price stability since the 2008 financial crisis. The authors explain that on the one hand, the risk of a recession-induced period of deflation is real, and the fear of this scenario has led the U.S. Federal Reserve and the central banks of other countries to use policy tools to prevent deflation from taking hold. Meanwhile, the risk of a significant inflation rate increase has grown, largely due to expansionary fiscal policies adopted since the 2008 crisis.

The paper consists of six sections, focusing on:
  • Background information on inflation, problems connected to measuring it, and some of its effects on an economy;
  • Historical inflation rates;
  • The effects of inflation or deflation on insurance industries;
  • Risk mitigation strategies for insurers;
  • A publicly-available model that can be used to develop inflation/deflation projections under a regime-switching format; and
  • Conclusions.
As part of a package of documents that includes the paper and model, the authors have also written a user’s guide to the new model, which explains that the inflation generator is available for a variety of actuarial applications.

To read the paper and other material, visit here.

Contact with Questions: Steve Siegel, SOA research actuary, at

Efficient Link to Mortality Tables

The CIA often receives questions from the membership and others about where to locate a particular mortality table, whether it is published by the CIA or some other organization.

After reviewing how the tables were stored and how actuaries use them, we decided to create a link from the CIA home page to the SOA Mortality and Other Rate Tables page, where all Canadian tables and those from other countries are stored.

This makes the process of finding the various tables far easier than ever before.


Contact with Questions: Chris Fievoli, CIA resident actuary, at or 613-656-1927

Practice Education Course (PEC)

In order to obtain the Fellow of the Canadian Institute of Actuaries (FCIA) designation, all students who completed the Society of Actuaries examinations must attend and pass the PEC in order to become an FCIA.

The PEC can be taken if the candidate satisfies any one of the following conditions:
  • The candidate has credit for Courses P, FM, M and C (with full VEE), all FAP requirements (all eight FAP modules and both the interim and final assessments) and both FSA exams (N.B., FSA modules are NOT required) under the Society of Actuaries’ examination system; OR
  • The candidate has obtained his/her Fellowship designation from a recognized actuarial organization.
Please note that no exceptions will be made to the above requirements.

Registration is open for the Practice Education Course to be held from Sunday, June 3, through Wednesday, June 6, 2012 in Ottawa, Ontario.

Candidates who have satisfied the eligibility requirements should complete a registration form and return it to the CIA Secretariat along with payment of the registration fee by April 1. Registration forms and other information can be obtained on the CIA website at the link below.

Registration is on a first-come, first-served basis depending on the date of receipt of the registration form and payment of the registration fee. Candidates will generally be accepted, space permitting. However, due to size considerations, space may be limited for some practice area specialties.


Contact with Questions: Leona Campbell, coordinator, eligibility and education, at

ERM Webcasts

Value-Based ERM: A Best Practice Approach

Wednesday, February 29, 2012
12:15 p.m. to 1:15 p.m. (EST)

Speaker: Sim Segal, president, SimErgy Consulting LLC

Most enterprise risk management (ERM) programs suffer from three main shortcomings: (1) an inability to quantify strategic risks; (2) an unclear definition of risk appetite; and (3) a lack of integration into decision-making. In this webcast, we introduce a best practice approach called value-based ERM, and discuss how it resolves these difficulties and helps chief risk officers easily build buy-in for their ERM programs. Includes case studies.

The 10 Key ERM Criteria

Wednesday, March 28, 2012
12:15 p.m. to 1:15 p.m. (EDT)

Speaker: Sim Segal, president, SimErgy Consulting LLC

This webcast presents the 10 key criteria that define best practices for an ERM program, and which can be used to benchmark the robustness of any ERM program. We will discuss common industry practices and evaluate them against each of these 10 criteria, and discuss the advantages and disadvantages for each key criterion.

Five Keys to Successful Risk Identification

Wednesday, April 25, 2012
12:15 p.m. to 1:15 p.m. (EDT)

Speaker: Sim Segal, president, SimErgy Consulting LLC

Since risk identification is the first step in the ERM process cycle, most assume that by now standard practice must be best practice, but this is not the case. This webcast discusses the critical mistakes commonly made in risk identification that can derail an ERM process, and the five keys to successfully avoiding them.

Link: Webcasts

Contact with Questions: Leona Campbell at; telephone: 613-236-8196 ext. 124

ALM 101 Webcast

Tuesday, March 6, 2012
Noon to 1:30 p.m. (EST)
Presenter: Charles Gilbert, president, Nexus Risk Management

Recent history has highlighted the importance of sound asset liability management (ALM); many of the large losses and failures suffered by insurance companies, as well as the entire pension crisis, could have been easily avoided. Pension plans, insurers and their stakeholders learned the lessons painfully as financial markets ruthlessly punished those with inadequate ALM discipline. More education for decision-makers is needed. Simplistic yet popular duration-matching strategies are not enough to protect pension plans and insurance companies from the multiple dimensions of the interest rate risk exposure they face.

The webcast will provide an overview of the evolution of ALM, present fundamental concepts and discuss the uses and limitations of common risk metrics. ALM 101 is aimed at ACIAs and new FCIAs and is designed to be at the basic/intermediate level. It will be followed by a question-and-answer period.


Contact with Questions: Leona Campbell at; telephone: 613-236-8196 ext. 124

CAA/IPEBLA 2012 Conference at Montego Bay, Jamaica

The Caribbean Actuarial Association (CAA) and International Pension and Employee Benefit Lawyers Association (IPEBLA) will hold a conference in Montego Bay, Jamaica, from April 22–24, 2012, entitled Building Bridges: Connecting Law, Regulation and Actuarial Practice.

The program, which is available here, will cover current issues relating to public and private pension plan design, governance, investment, operation and supervision, plus deferred income arrangements for executives. The event attracts lawyers and actuaries who service the pension and benefits industry in their own countries and internationally. This is an ideal opportunity for regulators, trustees, investment managers and administrators to enjoy presentations by well-known experts, including representatives from the International Monetary Fund and the Caribbean Community and Common Market (CARICOM), and participate in discussions on topics relevant to the pension and benefits industry worldwide.

Registration at an early-bird rate of $500 USD is now open here. A preferred room rate has been arranged until March 7 at the hotel hosting the conference, the spacious Half Moon. To reserve a room at the reduced rate, visit the hotel’s website, click on "Groups", and enter the attendee code 539490, then click on "Sign In".

Contact with Questions: or 416-693-7775

AcSB Exposure Draft on Employee Future Benefits Issued for Comment

On January 24, the Canadian Accounting Standards Board (AcSB) issued the exposure draft Employee Future Benefits, proposing amendments to the standards for employee future benefits that will affect private enterprises, not-for-profit organizations, and pension plans, that have chosen the deferral and amortization approach for their defined benefit plans.

The AcSB welcomes comments on this exposure draft until May 25, 2012 (see the Comments Requested section of the draft for further details on how to comment).

Link: Exposure draft

Contact with Questions: Nancy A. Estey, CA, principal, Accounting Standards Board, at

Submission to Nova Scotia Department of Labour and Advanced Education

The Canadian Institute of Actuaries (CIA) is pleased to offer comments on Nova Scotia’s Draft Pension Benefits Regulations made under the Pension Benefits Act.

Link: Submission

Contact with Questions: Marc-André Melançon, Chair, Member Services Council, at

Registration Now Open for 2012 ERM Symposium

The 10th Enterprise Risk Management (ERM) Symposium is scheduled for April 18–20 at the Marriott Wardman Park in Washington, DC.

This is the first time the symposium has been held outside Chicago, and here are a few highlights:
  • Five general sessions and more than 25 concurrent sessions featuring risk management experts;
  • Seminars on hot issues;
  • Networking opportunities to renew and expand your list of contacts;
  • A track of sessions featuring academics presenting research from leading universities; and
  • Exhibitors demonstrating their services and knowledge.
Link: Symposium

Contact with Questions: Dave Core, director of professional education and research, Casualty Actuarial Society, at 703-562-1729, or

Discussion Paper: The Role of Individual Savings and Financial Literacy

In 2010, the Board of Directors of the Canadian Institute of Actuaries requested that a task force be formed to prepare a discussion paper on the role of individual savings and financial literacy in supporting the retirement goals of Canadians.

This paper defines "individual savings" in the context of the Canadian retirement income system. It addresses the risks and obstacles that can impede retirement saving and describes the specific challenges facing middle-income Canadians saving for retirement.

Link: Discussion paper

Contact with Questions: Paul Reaburn, Chair, Individual Savings and Financial Literacy Task Force, at

Research Paper: Calibration of Equity Returns for Segregated Fund Liabilities

The Committee on Life Insurance Financial Reporting has created a designated group to draft this paper to provide support for an updated promulgation of calibration criteria for investment returns with respect to the valuation of segregated fund guarantees.

Link: Research paper

Contact with Questions: Alexis Gerbeau, Chair, Designated Group, at

Notice of Intent to Revoke Current Standards of Practice and Introduce a New Subsection in Part 2000

When most of the Standards of Practice were consolidated in 2002, the existing Standards of Practice relating to dividend determination and illustration were left intact. The objective of the Actuarial Standards Board is to incorporate appropriate Standards of Practice relating to dividend determination within Part 2000 – Practice-Specific Standards for Insurance. It has now produced a Notice to Intent to Revoke the Current Standards of Practice Entitled Recommendations – Dividend Determination and Illustration and Explanatory Notes in Amplification of Certain Dividend Recommendations, and Introduce a New Subsection Relating to Participating Policy Dividend Determination (and Illustration), in Part 2000 – Practice-Specific Standards for Insurance.

Parties wishing to comment on this notice of intent should direct those comments to Stephen Haist at by March 31, 2012, with a copy to CIA resident actuary Chris Fievoli at

Link: Notice of intent

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

Initial Communication of a Promulgation of Calibration Criteria for Investment Returns Referenced in the Standards of Practice for the Valuation of Insurance Contract Liabilities: Life and Health (Accident and Sickness) Insurance (Subsection 2360)

The Actuarial Standards Board proposes to promulgate the use of the calibration criteria for equity returns described below, effective October 15, 2012. A research paper is being concurrently released by the CIA’s Committee on Life Insurance Financial Reporting that provides a rationale for this proposed promulgation for calibration criteria for equity returns.

Comments on the proposed changes are invited by March 31, 2012. Please send your comments, preferably in an electronic form, to Chris Fievoli at with a copy to Alexis Gerbeau at

Initial communication

Contact with Questions
: Alexis Gerbeau, Chair, Designated Group, at

Discipline Notice – Notice of Suspension

A Discipline Notice has been prepared by the Committee on Professional Conduct to inform CIA members of the suspension of Mr. Ashley B. Crozier.

Link: Discipline notice

Contact with Questions: Wayne Berney, Chair, Committee on Professional Conduct, at

Educational Note Supplement: Assumptions for Hypothetical Wind-Up and Solvency Valuations with Effective Dates from December 31, 2011, to December 30, 2012


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, 2011, and later (but no later than December 30, 2012). Since this guidance may have an effect on valuations currently in preparation with an effective date of December 31, 2011, 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 2011 on Assumptions for Hypothetical Wind-Up and Solvency Valuations with Effective Dates Between December 31, 2010, and December 30, 2011. Over the course of 2011, 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 in November 2011 and was effective as of September 30, 2011.


This guidance is partially based on quotes provided by eight insurance companies on illustrative group annuity business using pricing conditions at December 31, 2011. These data were collected on the same basis as the illustrative quotes as of December 31, 2010 (as described in the May 2011 educational note), and the methodology used is consistent with the methodology adopted as of each quarter-end in 2011. The illustrative quote information was supplemented with data on the pricing of actual group annuity purchases during the fourth quarter of 2011 provided by certain actuarial consulting firms.


The results of the illustrative non-indexed quotations at December 31, 2011, 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, 2011.

Average of the three most competitive quotes
(using UP94 generational mortality tables)
  Large purchase
Small purchase
Discount rate
Spread over CANSIM V39062
Deferred vesteds
Discount rate
Spread over CANSIM V39062 

The illustrative quotes suggest that an appropriate discount rate for estimating the cost of purchasing immediate non-indexed group annuities be determined as the unadjusted yield on Government of Canada (GoC) long-term bonds (CANSIM series V39062) increased arithmetically by approximately 90 basis points (bps), in conjunction with the UP94 mortality table with generational projection.

The actual group annuity purchase data obtained by the PPFRC for the fourth quarter of 2011 were also considered. In particular, the data on the actual purchases of non-indexed annuities during the month of December 2011 that were available to the PPFRC produced an average spread of approximately 90 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 a result, and based on both the illustrative quotes and the actual group annuity data, the PPFRC has concluded that there is not sufficient evidence at this time to differentiate the guidance on pricing of group annuities for large and small annuity purchases, and immediate and deferred annuities.

Guidance for Non-Indexed Pensions

Based on the analysis described above, the PPFRC has concluded that, for valuations with effective dates on and after December 31, 2011, but no later than December 30, 2012, 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 90 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, 2011, the unadjusted CANSIM V39062 rate was 2.41%. 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, 2011. Prior to rounding, an applicable underlying discount rate would then be determined as 2.41% + 0.90% = 3.31%.

Guidance for Indexed Pensions

As in prior years, data regarding the pricing of annuities indexed to the Consumer Price Index (CPI) are extremely limited. None of the data obtained regarding actual annuity purchases during the fourth quarter of 2011 pertains to indexed annuities. 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 intends to conduct further research in 2012 regarding the pricing of indexed annuities. The analysis will include 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 10, 2011, educational note and other relevant educational notes.

Additional Comments

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, 2011, up to December 30, 2012, pending any further guidance or other evidence of change in annuity pricing.

The PPFRC has observed that the duration of obligations being purchased may have had a significant impact on annuity pricing during 2011. Furthermore, the PPFRC believes that 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. The PPFRC intends to review the effect of duration on the pricing of group annuities. This review may result in the refinement of future guidance to better reflect the effect of the duration of the obligations being valued.

It may be noted that the spreads 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 Assurance, 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.

Link: Educational note supplement

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

December 2011 Risk Management Newsletter Now Available in Both Official Languages

The CIA has just produced a French version of the Risk Management Newsletter, and the newsletter is now available in both official languages on the Society of Actuaries (SOA) website. It is published by the Joint Risk Management Section, which 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: Newsletter

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

Major ERM/CERA Advertising Campaign

A major new advertising campaign will highlight the CIA’s extensive work in the field of enterprise risk management (ERM) and its status as a Chartered Enterprise Risk Analyst (CERA) award signatory.

Animated banner adverts will soon be included on the websites of the Financial Post and Les Affaires, the weekly business newspaper based in Montréal. The Financial Post has also interviewed former CIA President Mike Hale, a member of the steering committee that drafted the global CERA treaty, for an article that will run on a dedicated CIA page containing detailed information about the Institute’s involvement in this increasingly-important area. The adverts will be published later this month, and a further announcement will be made when they go online.

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

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