Transcript from December Video Update

 

By Rob Stapleford, FCIA
CIA President

To view the video version of this message, click here.

Hello. I am Rob Stapleford and I am President of the Canadian Institute of Actuaries. This month, I will cover what happened at the CIA Board meeting on November twenty-sixth and share with you some highlights from the actuarial association meetings the leadership has attended since my last update. Merci beaucoup to Michel Simard for taking on the French version of this update!

At the Board meeting, there were a number of high-priority reports presented. Much is going on within the CIA; I want to thank the many volunteers who are at the heart of our Institute.

First up was the ongoing work on the strategic plan for 2016–2019. Thanks to the 396 members who participated in the poll which focused on the CIA’s top three strategic focus areas for the next 3–5 years. After considerable discussion and taking this feedback into account, the Board chose education, emerging areas of practice, and influencing public policy. All of these items will challenge and stretch the Institute in their planning, development, and implementation, but they will position us very positively with stakeholders.

Our next step will be to hold a special meeting or call of the Board in January where we will work through a process to identify and develop operating objectives in each of the focus areas.

The next high priority activity was to discuss what is meant by public interest. This is a very critical term in our profession, so much so that Rule 1 of our Guiding Principles states, "In carrying out its activities and programs, the Institute holds the duty of the profession to the public above the needs of the profession and its members."

Dr. Diane Girard led the Board through a discussion to help us get our arms around the task of understanding what the public expects from self-regulating professions, and how the CIA delivers on this expectation. Dr. Girard recently spoke at the IAA meeting in Vancouver. She holds a PhD in management, focused on middle managers’ ethical decision-making, an MBA, a master’s degree in law (LLM) and a post-graduate degree in applied ethics. She is a member of the Ordre des administrateurs agréés du Québec and of the Ethics Practitioners Association of Canada. She was also a member of the Québec Bar from 1983 to 2012.

The CIA meets its responsibilities in this regard through Standards of Practice, Rules of Professional Conduct, a robust discipline process, our initial education, continuing professional development, and professionalism sessions. In Dr. Girard’s view, the CIA could and should do more. Her presentation and follow-up discussion focused on support for individual members and she proposed ethical decision-making be promoted within the profession.

This topic continued into the next agenda item: a report from the Task Force on the Implementation of the Proposed Changes Regarding the Protection of the Public Interest. This work arose from the First Principles Review of the CIA’s approach to CPD and the recommendation by the 2014–2015 Governance Committee to introduce a requirement for members and those entering the CIA to report criminal convictions.

The report calls for bylaw changes to be voted on by members in 2016 and approved at the Annual Meeting next June. There will first be a 45-day consultation process with members in January and February, including webcasts, to seek member input before the proposed changes are finalized, likely at the March Board meeting. The usual protocol for bylaw changes, once the Board approves them, would then follow in April/May, and include additional informational webcasts, proxy voting, and finally discussion and approval at the General Business Session in Newfoundland in June.

The first change has to do with member compliance with CPD requirements. There is a small number of members who, for one reason or another, do not fulfill their CPD requirements, yet continue to use their professional designation with the full rights of membership. The Board has discussed and continues to discuss the implications of this non-compliance, in terms of the protection of the public. The Eligibility Committee completed a review of the CPD process and brought forward recommended changes. The EEC approved the recommendations. The Board has requested some changes. Once completed, the material will be circulated to the membership for comment.

The second change to the bylaws has to do with members reporting any criminal convictions they may have had to the Institute. Our law firm made this recommendation a few years ago, and the Governance Committee was asked to investigate. Many other professional bodies impose this requirement on their members, and having members report their criminal convictions would give the Institute an opportunity to assess and determine if such a conviction would impair the member’s ability to provide professional services.

Consider that Rule 11 of the Rules of Professional Conduct states, "A member shall be subject to the Institute’s disciplinary procedures if the member is convicted or found guilty of or pleads guilty to any criminal or similar offence." So, there is a requirement for reporting criminal convictions, but no mechanism for members and prospective members to do so. The bylaw change will take care of this gap.

Our next discussion was on the CIA’s bid to host and organize the 2026 International Congress of Actuaries, or ICA. The Institute submitted a letter of intent to bid to the IAA, which was accepted. Our competitors are Japan and South Korea.

Since the acceptance of our intent to bid, a small working group created by our International Relations Council and headed up by Bob McKay, has worked closely with the CIA Head Office and Tourism Vancouver to draft our bid. The Chair of the ICA 2026 Organizing Committee is Jason Vary, and the Chair of the Scientific Committee is Alexis Gerbeau. The detailed bid application was presented to the Board, which passed a motion empowering the IRC to submit the final bid by the February first, 2016 deadline. From there it will go to the IAA executive council at its meeting in St. Petersburg, Russia, in May 2016. A decision by the council is expected in November 2016.

Next up was the annual report to the Board by the Actuarial Standards Oversight Council. ASOC Chair Tricia O’Malley delivered the presentation. ASOC’s key issues were of great currency. ASOC has also been considering the public interest it was intended to serve. Stakeholders are satisfied with the ASB’s output but have expressed concern about timeliness of that output and just how sustainable a wholly volunteer system is, especially considering the increasing activity on the international level. Tricia noted that questions have been raised about the sometimes different approaches adopted in the standards for economically similar products or circumstances. The question is whether the differences are justifiable?

Paul Reaburn, Chair of the Actuarial Foundation of Canada board delivered the foundation’s annual report to the Institute. Paul reported that it has been a very successful year for the AFC, with high demand for funding through the Youth Education Committee; more funded programs and more awareness of the AFC’s activities through additional communications and presence at conferences and meetings. Aside from youth education, the AFC is looking into involvement in financial literacy activities and research.

Pierre Dionne, Chair of the Practice Council, presented its Annual Report to the Board. Last year, the PC published five revised educational notes, a research paper, five educational notes, a draft educational note, and quarterly educational notes. As well, the PC wrote two submissions and issued an own risk and solvency assessment survey, and took over the skills and knowledge inventory. The Committee on Life Insurance Financial Reporting and the Property and Casualty Insurance Financial Reporting Committee presented their fall letters, and the Pension Plan Financial Reporting Committee presented its quarterly and yearly update to the Guidance for Assumptions for Hypothetical Wind-Up and Solvency Valuations.

Faizel Alladina delivered the Annual Report of the Research Committee or ResCo. Faizel took over the chair of ResCo from Dave Dickson in October and has worked hard to fully control the extensive work plan and budget that this committee has. There are a number of RFPs in play at the moment which will result in committed projects shortly. ResCo initiated a committee feedback survey and implemented a new research approval process and checklist. Four research projects are scheduled for approval by the end of the year and new liaison roles have been created for several external groups. The Institute and Faculty of Actuaries has called for several large research projects to be conducted in partnership with other actuarial associations. The SOA is doing the same. Some good ideas have emerged, but work needs to be done to narrow the scope. Frankly, ResCo is not suffering from a lack of good research ideas but does need more volunteer support to meet the growing number of research opportunities. If you are interested in serving on ResCo, please contact the Institute’s resident actuary, Chris Fievoli.

Mathieu Boudreault and Thomas Hinton, Co-chairs of the Education Syllabus Committee, presented the first-ever syllabus for the ACIA and FCIA. The syllabus will be the benchmark against which all CIA education partners will be evaluated from here on, and it sets out the minimum requirements for Associate and Fellow education.

The syllabus aims to produce actuaries who are recognized internationally for work of the highest professional actuarial standards. It does this by laying out a balanced education, including theoretical concepts, technical material, practical applications, professionalism, communications, and general business acumen, while meeting the IAA and CERA global syllabus requirements and enhancing these syllabi with Canadian-specific content where appropriate.

The Board was impressed by all the work and thought that has gone into the syllabus project. Thanks to the many volunteers. After some fine-tuning, the syllabus will be published early in the new year.

The next project I want to share with you is the University Accreditation Program First Principles Review. After three years of operation, the UAP policy requires that such a review be conducted. Since UAP was first launched, it has gained in acceptance by CIA members, actuarial employers, students, and the Institute’s education partners. A key goal of the UAP is to leverage the high quality education provided by Canadian universities, reduce overlap in the preliminary education and examinations, and to enhance the quality of the ACIA and FCIA designations. The report included a detailed analysis of the proportion of students who achieved the required grade for credit for some of the preliminary actuarial examinations, benchmarked against the overall passing percentages on preliminary examinations. The report concluded that the proportion of candidates achieving the credit grade was lower than the average passing percentage by university students on exams. This indicates UAP is not an easier route than taking professional examinations, particularly given the fact that students must achieve the required grade on multiple courses to receive credit for one professional exam. We feel that even at this early stage, that our objective of enhancing quality has been met.

Accreditation actuaries are taking their roles seriously and putting the interests of the Institute and UAP process in the forefront. Universities are sharing education and assessment processes. There is consistency in the examination and grading processes. And among many students, UAP has become the preferred route. And what needs to be improved? It takes a lot of administration to keep the system moving. There needs to be some streamlining of processes to accommodate changing syllabi and technological changes. The report also contains the results of a member and employer survey conducted earlier this year. We still have work to do to ensure employers understand UAP and recognize it within their internal programs.

Fall is always a busy time for actuarial associations. I was honored to represent the Institute at the SOA and CAS annual meetings. As well, the CIA helped the American Academy of Actuaries celebrate its 50th Anniversary at its Annual Meeting.

At these meetings we take advantage of the fact that the leadership of the associations are together and we schedule bilateral meetings to help move joint issues forward. For example, at the AAA meeting, we finalized the cross-border discipline agreement that we announced on November third.

At the IAA meeting in Vancouver, it was very apparent that the CIA is active on many IAA committees, and is capably led by the IRC chaired by Dave Pelletier. While there, we met with the Institute of Actuaries of Japan as an introductory meeting, and the Actuarial Society of South Africa to discuss education of actuaries in banking and to finalize a mutual recognition agreement. We met with the CAS to discuss common education interests and the SOA for ongoing talks on a memorandum of understanding on education principles, UAP, their general insurance track, and a mutual recognition agreement. Finally, we met with the IFoA to discuss their new designation, the Certified Actuarial Analyst (CAA) which is a career pathway designed to enable students to study for the qualification while working full-time.

We are getting quite close to signing a number of agreements with our partners, the AAA, SOA, and CAS for the Actuaries Climate Index or ACI. The research work has been completed and the effort on the ACI website should start shortly, with a launch target of mid2016. The overall responsibility for the CIA’s part of this project now resides with the CIA’s Climate Change and Sustainability Committee, led by Karen Lockridge. I have seen a number of presentations on the ACI and I am very excited about its great potential!

Finally, I wish all of you a happy and safe festive season and the very best for 2016!

Rob Stapleford, FCIA, is President of the Canadian Institute of Actuaries.

Canadian Institute of Actuaries/Institut canadien des actuaires
http://www.cia-ica.ca/