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

Canadian Institute of Actuaries/Institut canadien des actuaires

November 2014
Elliott Bauer
D.W. Simpson & Company
Eckler Ltd.
Your Institute

As the November Board meeting coincided with the deadline for publication of this issue of the (e)Bulletin, there is no video update from CIA President Jacques Tremblay this month. However, his latest video informing members about what took place at the event will appear on the CIA website as soon as possible, and an announcement will be made when it is available. It will also be included in next month’s (e)Bulletin.

 
Spotlight

By Peter Muirhead, FCIA

The University Accreditation Program (UAP) provides the CIA with a robust system for recognizing the high-quality education offered by Canadian universities, and provides an option for top actuarial students to complete portions of the Institute’s preliminary eligibility requirements.

Why We Did It

Many Canadian universities:

  • Offer rigorous and high-quality actuarial education for the core technical or foundational topics;
  • Have a wealth of experience in evaluating the comprehension of the learning objectives; and
  • Are experts in education, and the CIA recognizes that. The classroom is the appropriate environment to teach (and test) many of the technical skills that actuaries require.

The CIA also feels that leveraging university accreditation is critical to enhancing the future of the actuarial profession in Canada and that overall we benefit from shifting the attention of students from practicing how to pass exams to focusing on success at university and obtaining a well-rounded education. The net effect is a reduction of duplication in the evaluation process and greater efficiency in completing the qualification requirements for the ACIA, allowing candidates to focus earlier on preparing for the Fellowship-level exams. The true test for UAP candidates will be their success and progression through the Fellowship requirements as they demonstrate that they have mastered the skills required.

The UAP’s Goals

The goal of the UAP is not to introduce a degree requirement for the profession, or make actuarial education elitist by requiring top marks. It is an option—for strong Canadian candidates—to obtain credit for some of the preliminary exams. The preliminary exams of the Society of Actuaries (SOA) and Casualty Actuarial Society (CAS) will continue to be recognized by the CIA for candidates who do not pursue exemptions.

Another advantage of the UAP is that it can allow the actuarial profession to attract top talent. The road to becoming an actuary is often seen by students as too long or having too few early rewards when compared to other professions. Creative thinking is essential regarding our education system in order to attract future actuaries who will maintain the profession’s well-respected position in the financial marketplace, and who will continue to expand opportunities for actuaries in the future.

The Canadian Actuarial Syllabus

Ultimately, the CIA has responsibility for defining what it means to be an actuary in Canada, primarily for the protection of the public interest. Across all aspects of its education system, the Institute must choose the best assessment and validation methods for the credentials (ACIA, FCIA) that we bestow on our members. The CIA takes its responsibilities very seriously and continues to do so with the UAP. Proactive responsibility lies in the appropriate education of future members and the Institute is now, more than ever, stepping up to the plate on education.

One example of this paradigm shift is the new Canadian syllabus of education. In the near future, the CIA will have its own syllabus of education that will continue to be fulfilled through:

  • University education;
  • Partnering with other actuarial organizations; and
  • Its own education and professional development programs.

The difference is that it will be uniquely defined by the CIA as a stand-alone education system leading to the ACIA and FCIA designations, rather than necessarily being derived from other actuarial credentials. This is one of the Institute’s four long-term strategic goals:

"The CIA is viewed as an educational body, not just an accreditation body. It takes full accountability for the educational path to FCIA (which may involve outsourcing) with the FCIA recognized as being a high-quality stand-alone educational designation (i.e., not having to be aligned to another designation)."

Where We Are Now

For courses beginning in the fall of 2012, 10 Canadian universities with recognized actuarial science programs were accredited by the CIA. In 2013, another was added.

Since their initial accreditation, all universities have undergone an external examiner (EE) visit in 2013 and in 2014. The EE’s review covers:

  • Testing and examination procedures;
  • Sample student exams and exam scripts;
  • The number and quality of students achieving the minimum exemption grade;
  • The faculty requirement; and
  • The potential for grade inflation.

EEs also meet with key contacts at the university, including the accreditation actuary or AcA (a Fellow who is a member of the CIA and who is responsible for the UAP within their university) and course instructors to share information regarding the CIA’s best practices.

The Students

Students applying for exemptions must achieve the minimum required exemption grade in each course mapped to a single exam syllabus. Usually two to four courses are required for a single exemption. The exemption grades were established based on the historical passing percentages of students from each university on SOA and CAS exams. The minimum exemption grades of B+ and higher vary by course and by university and are monitored annually by the CIA.

To date, 100 students have received exam exemptions, some with multiple exemptions for a total of 131 exemptions granted at the time this article was written. The average grade of those receiving CIA exam credits was, on average, 9.5 marks above the required exemption grade.

What We’ve Learned So Far

The EE process revealed that the universities are rigorous in their adherence to our syllabus and in their evaluation of the students, and that the goal of providing educational experiences that could not be obtained through the traditional self-study approach is being achieved.

One area of concern to the CIA and its stakeholders is the potential for grade inflation. This can occur for many reasons, including the possibility that instructors mark too leniently, or that the existence of the UAP may result in students working harder to achieve the required grades. In their reviews, the EEs found no evidence of grade inflation, but did identify a few areas where recommendations were made for consistency in achieving CIA best practices.

The Institute seeks to recognize the academic freedom of instructors in choosing the best examination methods, but at the same time must be confident that the syllabus is being appropriately covered and that examinations and tests demonstrate the degree to which the student has mastered the content. Universities agree that making the exemption grade easier to achieve does a disservice to all.

Success in maintaining high standards comes from good communication between the CIA, the AcAs, and the course instructors. Through regular communication including an annual face-to-face meeting with AcAs, the CIA and the universities are able to identify and share ideas with the aim of continually improving the program for the good of all.

Awareness and Acceptance of the UAP

The CAS and the UK Faculty and Institute of Actuaries both recognize CIA exemptions towards the fulfilment of their respective designations, FCAS and FIA.

Given the SOA board’s decision not to recognize exemptions from the CIA towards the ASA and FSA designations, some concern exists among students that the UAP will limit their career opportunities. We must remember that the FCIA is the designation for Canadian actuaries, and the UAP is based on the learning objectives of the preliminary exams used by the CIA, CAS, and SOA. A candidate for employment with UAP exemptions and a candidate who has written the associated exams should be treated equally. It is also important to note that the FCIA continues to be recognized by the American Academy of Actuaries (AAA) towards the MAAA designation requirements, when combined with the appropriate U.S. experience.

We are continually in communication with employers so that they understand the UAP and what it achieves. Many employers have told us that they see no difference between the two kinds of candidates. We must spread this word to the front-line recruiters so that they understand as well and do not make biased hiring decisions.

The CIA will continue promoting the value and portability of the FCIA designation and the fact that regardless of how it is obtained, it is a first-class designation, respected internationally.

The Way Forward

Now well into its third year, the UAP is gaining momentum and remains a strategic and viable component of the CIA education system. The Accreditation Committee is continually evaluating and improving aspects of it and as such will be undertaking a first-principles review over the coming months. Part of this review will include reaching out more broadly to CIA members to raise awareness of the program, gauge member perceptions, and gather feedback that will help the evolution of the UAP as part of the CIA’s overall education strategy. We hope you will engage and help us continue to strengthen the Canadian education system for future members.

For more information, click here.

Questions and comments may be directed to: accreditation@cia-ica.ca


 
MOVERS AND SHAKERS

Rob Brown's advice on planning for retirement was included in a Globe and Mail article on downsizing.

Sue Elliott has moved from her role as head of care solutions at Just Retirement to become head of product at MetLife.

Michel St-Germain and William Da Silva featured in a Montreal Gazette story about pensions, protests, and the CIA's mortality tables.


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 andrew.melvin@cia-ica.ca 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.

 

 

 

 
Institute News

By Micheline Dionne, FCIA

In a month, I will be leaving the International Relations Council (IRC) after three and a half years of service at the head of a group that has made significant changes, and not just to its name.

In 2011 it was called the Committee on International Relations (CIR). It had one major focus: regrouping the CIA delegates to the International Actuarial Association (IAA). It chose the delegates and provided a forum for exchange before and after the IAA meetings. In the same year, the CIR formalized the recruitment of delegates and reviewed the terms of their appointment. No longer would the delegate be named for life. Mandates are now for three years with a two-year potential extension, as it takes longer to become fully efficient on international committees than it does on regular committees. At the end of the term, the opening is advertised to the whole membership and a formal interview process is performed. The change in approach democratizes recruitment, ensures there is a healthy turnover, maximizes the commitment of resources, and draws younger actuaries towards international matters.

The second wave of changes involved regrouping under the CIR all the groups dealing with international issues. Two task forces were mandated to respond to the proposed standards from the International Accounting Standards Board (IASB)—one on insurance accounting and the other on pensions and employee benefits. They reported to both the Practice Council and the CIR, but the council and committee each assumed that the task forces were managed by the other group. The reporting relationship is now clearly defined under the IRC, and other committees have been added: one on insurance regulations to respond to requests from the International Association of Insurance Supervisors (IAIS) and other international regulatory bodies, and another focusing on participation with the IAA, to fulfil the original mandate of the CIR.

The council structure that has been in place since June allows for the same level of oversight over international activities as there is for the other three councils regarding their areas of responsibility. We make quarterly reports to the Board and are part of the planning activities and risk management.

In the last 12 months, the Committee on CIA Participation to the IAA has attended two international meetings of the IAA, with delegates present at all strategic sessions. Each delegate is responsible for completing a report on the sessions attended, focusing on their relevance to the CIA and any action required by the Institute.

The Committee on International Insurance Accounting provided comments to the IAA on the statement of intent (SOI) of an international standard of actuarial practice (ISAP) for insurance contracts (IFRS 4) and to the IASB on its conceptual framework paper and its exposure draft of IFRS 4.

The Committee on International Insurance Regulations commented to the IAIS on its two consecutive papers on Basic Capital Requirements (BCR) and to the IAA on the SOI for ISAP 7, which is intended to support the IAIS BCR.

The Committee on International Pension and Employee Benefits Standards commented on the exposure draft of the IAA ISAP on pension and employee benefits (IAS 19) and on its recent final revision.

In addition, a drafting team of enterprise risk management (ERM) experts has been formed to respond to the SOI on two standards proposed by the IAA on ERM matters.

As I leave my role as chair of IRC, I am proud of the involvement of CIA members on the international scene and I am confident that Dave Pelletier as its incoming chair will help push our involvement to new levels.

Micheline Dionne, FCIA, is Chair of the International Relations Council.

 

The Casualty Actuarial Society (CAS) commemorated its centenary in style earlier this month, with around 2,000 actuaries and other financial professionals attending the organization's annual meeting and celebration event in New York City.

Among the participants were many members of the CIA, and more than 50 people attended the Institute-organized Canadian Breakfast. This was an excellent networking opportunity, with actuaries enjoying the time to learn more about each other and the benefits of joining the CIA while savouring delicious food. Institute President Jacques Tremblay and President-elect Rob Stapleford were pleased to speak to the breakfast guests and promote the opportunities offered by the organization.

The four-day meeting also featured a special presentation from the CIA to congratulate the CAS on reaching its centenary. A dramatic statuette of a bear, carefully transported from Ottawa to New York, provoked a great reaction when it was handed to the society's president, Wayne Fisher.

Below are a few pictures showing some of the highlights of what proved to be a very successful visit by the CIA, and a very enjoyable occasion.

Just some of those who attended the CIA Canadian Breakfast.

The Institute's gift to the CAS: a lovingly crafted statuette of a bear.

CIA President Jacques Tremblay, left, presenting the bear to the CAS' Wayne Fisher.

From left, CIA Executive Director Michel Simard, M. Tremblay, and Mr. Stapleford at the gala dinner.

 

Steve O’Grady

1. Why did you become an actuary?

At the time it was the only job to do with a math degree.

2. When you tell people you’re an actuary, what do they think you do?

Some think I’m an actor. Others think I do something very boring at an insurance company.

3. Who has inspired you the most during your career? Did you have a mentor in your early career?

I can honestly say that I have never been inspired by anyone. I have never had a mentor.

4. What do you enjoy most about your job?

Driving to work.

5. What career would you follow if you weren’t an actuary?

Blues musician.

6. What are your hobbies?

Playing jazz piano, golf, crossword puzzles.

7. What is your favourite music, book, and film?

Music: jazz/blues.

Book: The Art of Always Being Right.

Movie: The Maltese Falcon.

8. Where is your dream vacation destination?

North Vancouver.

9. What do you do better than anyone you know?

I fill in surveys better than anyone else I know.

10. If you could be anybody else, alive or dead, who would it be, and why?

Oscar Peterson. I want to play jazz piano like he did.

Steve O’Grady is a senior consulting actuary at Westcoast Actuaries.

 

If you would like to be featured in Introduce Yourself, please answer the 10 questions above by completing our online form here.

 

The CIA Head Office has welcomed its latest recruit: Elliot Hughes, MBA, the new manager of government relations and communications. Elliot is responsible for the Institute’s engagement with external audiences—politicians, regulators, industry, relevant organizations, and the Canadian public—in the delivery of its strategic goal to be recognized as a leading contributor in the field of future financial contingencies and risks.

In his previous position of group external relations manager at Lloyds Banking Group, the UK’s largest retail and commercial bank, Elliot advanced the group’s political, reputational, and policy objectives among influential stakeholders including media, government, civil servants, and clients by providing strategic policy and political advice to the Group Executive Committee, including the group’s chief executive.

His political experience implementing policy and communication priorities through strategic influencing of key internal/external stakeholders, as well as his success developing communication strategies, tactics, and materials will certainly be helpful to the Institute as it implements the elements of its new strategic plan.

He can be reached at elliot.hughes@cia-ica.ca.

 

 
THIS MONTH'S PUBLICATIONS

BA082 Agenda: Board Meeting No 82 (November 26, 2014)
214123 CIA Accessibility Statement
214121 Discipline Bulletin: Volume 21, no 1 (November 2014)
214120 Policy on Copyright of Institute Publications
AM-2014-37 Session 37: ORSA Implementation (Volume 45, June 2014)
AM-2014-21 Session 21: Innovations in Managing Asset Decumulation Risk in Capital Accumulation Plans (Volume 45, June 2014)
214119 Policy on Proprietary Research Data
214118summary Research Paper on Operational Risk – Summary
214118 Research Paper on Operational Risk
AM-2014-8 Session 8: CLIFR Update (Volume 45, June 2014)
AM-2014-26 Session 26: It Is Tough Enough Being An Actuary. Let’s Not Add "Death by PowerPoint" (Volume 45, June 2014)
AM-2014-33 Session 33: Longevity Risk Perspectives (Volume 45, June 2014)
AM-2014-36 Session 36: Practical Applications of Predictive Modelling (Volume 45, June 2014)
EECM116 Eligibility and Education Council Minutes - Meeting nº 116 (October 20, 2014)
EECA117 Eligibility and Education Council Agenda - Meeting nº 117 (November 10, 2014)
AE014 Presentation to Dalhousie Law School: Division of pensions on marriage breakdown
214116 Seeing Beyond Risk (November 2014)
SES5INV2014 Session 5 • Behavioral Biases in Investment Decision-Making
AM-2014-24 Session 24: Development of Simplified Issue Products in Canada (Volume 45, June 2014)
AM-2014-27 Session 27: Systemic Risk (Volume 45, June 2014)
AM-2014-30 Session 30: Critical Illness Morbidity Studies – Most Recent Data! (Volume 45, June 2014)
214114 Educational Note: Premium Liabilities
SES4INV2014 Session 4 • Reflections on Governance and on Pension Plans
RFPLTHC Request for Proposals Regarding Canadian Long-Term Healthcare Trend Resource Model As at November 3, 2014

214117 Submission to Finance Canada: Proposed Amendments to Certain Regulations Relating to Pensions
EB1014PDF (e)Bulletin October 2014 (PDF Version)
EB1014 (e)Bulletin October 2014
SES5-3PEN2014 Session 5 • New CPM Tables – Further Review and Analysis - Introductory Comments
SES1PEN2014 Session 1 • ASB Update
SES1-1PEN2014 Session 1 - PPFRC Update
SES2-1INV2014 Session 2 • Longevity Risk and Investment Vehicles
SES2PEN2014 Session 2 • ACPM Round-Up
214113 Submission to Federal and Provincial Regulators on Pension Funding and Transfer Values


November's tweets from @CIA_Actuaries:

Presentation by Chief Actuary Ménard, at the @FMI_IGF on the topic of public sector pension plans. http://www.osfi-bsif.gc.ca/Eng/oca-bac/sp-ds/Pages/jcm20141125_slides.aspx...

Live to 100? More Canadians better plan for it http://fw.to/uZvc09k @globeandmail @KiwiV

The Actuarial Report on the Pension Plan for the Canadian Forces - Regular Force http://www.osfi-bsif.gc.ca/Eng/Docs/CFSA13.pdf...

Economical Insurance appoints #ActuaryChris Van Kooten to senior vice-president and chief underwriting officer #FCIA http://cnw.ca/HI8gJ

Charles Sousa's economic update gives shape to Ontario pension plan: Mayers http://on.thestar.com/1t5wLaZ via @torontostar

Government of Canada Considering Issuing More Ultra-Long Bonds http://ow.ly/EytuJ

#ActuarialStudents Register today for #ASNA2015! http://tinyurl.com/ASNA2015 #Montreal

OSFI is re-issuing Chapters 1, 2, and 6 of its guideline on Liquidity Adequacy Requirements http://www.osfi-bsif.gc.ca/Eng/fi-if/rg-ro/gdn-ort/gl-ld/Pages/LAR_rev_let.aspx...

Updated #Canadian #population estimates by marital status, legal marital status, age and sex are now available http://bit.ly/1v8Mhsg

Final version of revised Guideline E-13 (re-named Regulatory Compliance Management) http://www.osfi-bsif.gc.ca/Eng/fi-if/rg-ro/gdn-ort/gl-ld/Pages/e13_let_2014.aspx...

Congratulations to @CASact on your centennial anniversary!

#Actuaries looking for work? Check out the CIA Actuarial #JobsBank http://bit.ly/ActuarialJobsBank...

Final version: Guideline B-21 Residential Mortgage Insurance Underwriting Practices and Procedures http://www.osfi-bsif.gc.ca/Eng/osfi-bsif/med/Pages/b21_nr_1114.aspx...

Final revised version: MCCSR guideline for life insurers http://www.osfi-bsif.gc.ca/Eng/fi-if/rg-ro/gdn-ort/gl-ld/Pages/MCCSR2015_let.aspx...

Thank you Benefactor-level sponsors of #Investment Seminar: GGY Axis, Elliott Bauer, @KPMG_Canada, RGA, @SCOR_SE and @SOActuaries

Discussing behavioral biases in #investment decision-making with @LisaKramer at #Investment Seminar http://bit.ly/10dYgIe

Thank you to our Patron-level sponsors of the CIA #Investment and #Pension seminars @DeloitteCanada @AurigenRe @SunLifeCA

Up next the CIA #InvestmentSeminar: evolution of smart #betastrategies and underlying characteristics with @somseif http://bit.ly/10dYgIe

Exploring the range of #investmentstructures used to manage and mitigate the #risk in Canada and internationally http://bit.ly/10dYgIe

On today at CIA #InvestmentSeminar: ethical, strategic, and governance implications of #shareholder activism http://bit.ly/10dYgIe

The Actuarial Report on the Regular Force Death Benefit Account has been tabled http://www.osfi-bsif.gc.ca/Eng/Docs/RFDB13.pdf...

Thanks to @ChantalHbert for a great presentation at the CIA #PensionSeminar

Provinces need to innovate on #healthcare. But provinces can't do it on their own, says @ChantalHbert

The Actuarial Report on the Pension Plan for the Members of Parliament has been tabled http://www.osfi-bsif.gc.ca/Eng/oca-bac/ar-ra/mp-plm/Pages/mp13.aspx...

More from @ChantalHbert: #aging population is the elephant in the room

InfoPensions newsletter: 12th issue is now available on our website http://www.osfi-bsif.gc.ca/Eng/Docs/ip/20141103/index.html...

Presentation by Jean-Claude Ménard, Chief Actuary, at the @ISSACOMM International Research Conference http://www.osfi-bsif.gc.ca/Eng/oca-bac/sp-ds/Pages/jcm20141104.aspx...

Ahead today at #PensionSeminar: new standard of practice for #actuarialevidence and pensioners #Mortalitytables http://bit.ly/PensionSeminar

Interesting point from @ChantalHbert: short-term objectives of #politics vs. long-term nature of #actuarialwork

Pleased to have @ChantalHbertas luncheon speaker at the CIA #Pensionseminar today http://bit.ly/PensionSeminar

 
Calendar of Events
Board and Council Updates

Eligibility and Education Council

The following people have been appointed to the subcommittees of the Committee on Continuing Education (CEC) named below, retroactive to October 24, 2014:

  • Individual Life and Health Insurance: Laura Anders; and
  • Enterprise Risk Management: Andrei Titioura.

Heather Wolfe resigned as a member of the CEC and as Co-chair of the Pension Subcommittee, and Robert Bhatia and Peter Treichel as members of the Individual Life and Health Insurance Subcommittee, and leave with thanks.

Practice Council

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

  • Property and Casualty Insurance Financial Reporting: Michel Dionne, effective immediately;
  • Risk Management and Capital Requirements (CRMCR): Leonard Pressey (Chair), Kevin Gray, Irfan Shariff, Michelle Lindo, Pierre Bernard, Pierre Lepage, and Pierre-Paul Renaud, effective September 1, 2014; and
  • Pension Plan Financial Reporting (PPFRC): Andrew Gillies and Tom Mudrinic.

The following people have completed their terms or resigned from the committees named below, and leave with thanks:

  • Actuarial Evidence: Jamie Jocsak (resigned, effective September 24, 2014);
  • CRMCR: Glenalan Cameron, Robert Berendsen, Kelly Levy, Pascal Verrette, Ronald Miller, and Guillaume Benoit; and
  • PPFRC: Dean Newell, Melissa Kirshenbaum, and Barbara Sanders.