No Straightforward Answer on Reserved Roles

By Simon Curtis, FCIA
CIA President

The most recent CIA Board meeting included a discussion of "reserved roles" in Canada, and whether we should as a profession be looking to engage with regulatory bodies and governments to expand the number and scope of such roles for actuaries. Reserved roles are where work is required by statute/law/regulation to be signed or certified by an appropriately qualified FCIA. This discussion arose in the context of how to expand the profession in Canada and ultimately increase the employment opportunities for our members.

In Canada there are a significant number of reserved roles for actuaries. The most prominent are the Appointed Actuary role for insurance companies and the valuation role for defined benefit pension plans, but they extend to areas such as other insurance programs (workers’ compensation), the federal criminal code (criminal rate of interest), and rate certification (personal auto rates in Ontario), to name a few.

On the surface an increase in the number and scope of reserved roles would seem to be a straightforward win for the profession from a number of perspectives. Most fundamentally, the direct impact of reserved roles is to protect certain roles for actuaries and increase (and certainly not diminish) job opportunities. Reserved roles also buttress our position as the preferred experts and professionals most able to provide certain types of service/advice in a world where we increasingly compete with non-actuaries on the basis that they have similar skills. These roles also enhance our reputation and profile with our external stakeholders by providing recognition of the skills and professionalism we bring to the table as a profession.

There is, therefore, great appeal in pushing for new reserved roles, particularly if they allow us to access and cement roles in new or emerging practice areas where we believe we have an attractive skill set. In this context, a good example would be the concept of a Medicare actuary at the provincial or federal level to report annually on healthcare funding, similar in concept to the Canada Pension Plan actuary that currently exists federally.

However, a good argument can also be made that reserved roles—or too strong an emphasis on them—is not good for the vitality of our profession (or any profession). Indeed, at a recent discussion at the International Actuarial Association, there was significant reticence against encouraging member organizations to emphasize reserved roles as a means to grow the actuarial profession. At its most basic level, we want people to use our services because they value them—not because they are forced to. A profession that ultimately relies too strongly on protectionist roles or barriers to entry or competition will ultimately stagnate and the result will be the exact opposite of what was intended (history is littered with examples of this).

My personal belief is that the development of the CIA over the last 20–30 years has been significantly influenced by a strong focus on reserved roles—indeed, in my opinion, most of the creative energy of the CIA volunteer base has been focused on initiatives to support our reserved roles rather than more fundamentally focused on growing or re-inventing the profession through research, education, and similar activities.

At a practical level reserved roles also come with a number of issues. They require significant deployment of resources from the professional body, both initially and an ongoing basis. This inevitably means fewer resources to deploy on other activities and simply less focus on these potential activities. Reserved roles also come with significant risk, potentially, to the actuary and profession. For example, several of the opinions appointed actuaries must provide for par and adjustable policies are fairness opinions (i.e., requiring actuaries to opine that practices or actions are "fair")—opinions that I have heard many lawyers say they would flatly refuse to provide if asked (they consider them too subjective). As another example, some actuaries have raised concern with the auto rate filing opinions actuaries must give in Ontario.

So, as in most areas that impact our profession and professional work, there is no straightforward answer, and as is often the case, a balanced perspective is likely best. Reserved roles can be good for the profession—especially when we are "pulled" to provide them because we are strongly recognized as having value to add. However, we should be very cautious about "pushing" for reserved roles as a way to grow the profession when no strong "pull" exists from the other side—in this instance, we are better focused showing first the value we can have. We should also be cautious to make sure the reserved roles we are asked to fulfil are ones we can reasonably carry out.

Simon Curtis, FCIA, is President of the CIA.