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

Canadian Institute of Actuaries/Institut canadien des actuaires

February 2016
Elliott Bauer
D.W. Simpson & Company
Eckler Ltd.
President's Update

 

By Rob Stapleford, FCIA
CIA President

February has been a busy month for the CIA, as we launched the 2016 Elections process. Several positions are open: President-elect and four Director positions.

I encourage any member who wishes to run for one of these positions, and who meets the nomination requirements set out in the CIA Elections Rules of Procedure, to consider standing as a candidate. Serving on the CIA Board is a great opportunity to support the actuarial profession and help shape the future of the CIA. The deadline to submit your name for the 2016 ballot is April 1. You can read more about the CIA elections in this (e)Bulletin. Why not think of running?

In January’s Board update, I mentioned upcoming changes to the Bylaws regarding continuing professional development and use of actuarial designations, as well as the reporting of criminal convictions. In early February, we released a package of materials for members to review and comment on. An article in this (e)Bulletin describes these changes and the review process. I encourage you to read this material in great detail.

Finally, I would like to take this opportunity to remind members of this year’s Annual Meeting in St. John’s, Newfoundland, June 28–29.

The Annual Meeting is an excellent opportunity to network with Canada’s premier actuarial community, and discuss issues of concern. This year, there will be several shared sessions with the Joint Colloquium of the International Actuarial Association (IAA) Health and Pension, Benefits, and Social Security sections, the International Association of Consulting Actuaries, and the International Pension and Employee Benefits Lawyers Association. One of those joint sessions will be a keynote address by corporate whistle-blower Michael Woodford, former CEO of Olympus, who will discuss whistle-blowing and lessons in governance and crisis management. Mr. Woodford is a captivating speaker, and his story is a riveting tale of corporate malfeasance and ethics that you won’t want to miss.

This year’s program includes numerous sessions on a variety of topics including the following:

  • Early retirement;
  • Risk aggregation and diversification;
  • Emerging risks in the insurance industry;
  • Ethical decision-making for actuaries;
  • Dynamic risk assessment in P&C insurance;
  • Learning about change from a forensic accountant and a nuclear engineer; and
  • Cyber risk – both a threat to and an opportunity for the insurance industry?

Of course, all of this programming occurs amid the culture and beauty of Newfoundland.

The Board will meet again in March, where we will continue discussions on the Institute’s strategic goals and objectives. Stay tuned for an update on the outcome of this meeting.

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

 
In Focus

 

By Angelita Graham, FCIA

"A journey of a thousand miles begins with one step". Lao Tzu

As I come to the end of my leg of the relay and pass the baton to the next Education and Eligibility Council (EEC) chair, I can’t help but reflect on the laps completed and the laps remaining on the CIA education journey. I am proud of what the EEC has accomplished over the last few years and excited about what lies ahead.

During my past two years as EEC chair, we have overseen the completion and introduction of a number of initiatives/projects, including the following:

  • The Graduate Scholarship Program;
  • The formation of the CIA Education Syllabus Committee;
  • The finalization of the CIA’s first education syllabus, which was approved at the November 2015 Board meeting, and that will be posted on the CIA’s website;
  • The continuing professional development (CPD) needs analysis;
  • The University Accreditation Program (UAP) first principle review; and
  • The CIA’s 50th Anniversary Celebration last June in Ottawa.

As with all great organizations, we must continue to evolve in order to remain relevant. As General Eric Shinseki once said "If you don't like change, you're going to like irrelevance even less". The CIA recognizes this and education is one of the Board’s strategic objectives for 2016. The EEC has been tasked with overseeing/leading a number of exciting projects/initiatives in the coming years. Below is a brief summary of some of the projects in the pipeline that I believe will be transformational for the CIA’s education system.

1) Practice Education Course (PEC)

The PEC has been a very valuable component of our education system since it first launched in 2000, providing an interactive and practical venue for fellowship-level candidates to share knowledge and learn. The CIA plans to build on this platform to provide a more comprehensive offering.

The CIA Education Syllabus Committee is busy working on plans for the new PEC—PEC 2.0. The new PEC will address some of the skills required for us to compete in a rapidly changing environment, today and into the future. The vision is that in addition to track-specific workshops, communication, business acumen, and professionalism content would be incorporated into PEC 2.0. A significant focus would be on using case studies and group workshop methods to enhance the learning experience.

We strongly believe that these changes will enhance the skill sets of our future actuaries. We are not alone in this belief. The International Actuarial Association, in the new education syllabus it is working on, has included communication and decision-making skills as core competencies that actuaries should have.

In addition to the changes to PEC 2.0, consideration is also being given to making the new offering available to existing Fellows of the CIA who are interested in broadening their skill sets.

The EEC is expected to present the transition plan for PEC 2.0 to the Board for approval by the June Board meeting. Once approved, the details and transition plans will be shared with members.

2) Task Force on the Future Vision of CIA Education

"It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change." L.C. Megginson

The CIA is operating in a rapidly changing environment. The expectations and needs of our various stakeholders have been evolving and continue to evolve. We need to be responsive.

The EEC has undertaken a high-level review of the CIA education system. The Task Force on the Future Vision of CIA Education was recently formed by the EEC to take a holistic view of the CIA education system, including the overall design and a cost-benefit analysis of our various delivery methods—whether delivered through our valued education partners or through our own CIA offerings.

This task force is expected to report its findings to the Board by September 2016.

3) Committee on Continuing Education (CCE)

The CCE is embarking on a strategic review of the delivery of CPD to our membership. This review will entail a look not only at the contents of what we deliver to the membership, but also the structure and timing of the current seminars to ensure that they meet our members’ needs—should the meeting format/length be revisited, should we collaborate with relevant non-actuarial firms? The answers to these questions will inform how we move forward in the delivery of CPD. The result of this review is expected later this year.

Finally, I would like to thank all the individuals I have had the good fortune of working closely with over the years, as a member of the EEC and during my time as chair. Thank you for your dedication and hard work over the years. A special thank you to the Head Office staff, who are truly a set of committed and dedicated individuals. This has been a great adventure; I have personally learned so much along the way that has made my experience quite rewarding.

As Ralph Waldo Emerson said, "life is a progress, and not a station". I wish the next EEC chair great success as he runs his lap of the journey.

Angelita Graham, FCIA, is Chair of the Eligibility and Education Council.

 
Actuaries on the Move

Patrick Kavanagh recently joined PAL Insurance in Toronto as director of actuarial services.

Barry Gros was appointed the independent chair of the staff pension plan (SPP) board of the University of British Columbia.

Manuel Monteiro and Jean-Philippe Provost were quoted in a National Post article on Mercer’s Pension Risk Exchange.

Michael Stramaglia was appointed to the boards of directors of Munich Re and Temple Insurance.

 

The Globe and Mail profiled Frank Vettese in a recent article on high-net-worth investors. 

 

The Ontario Teachers’ Pension Plan (OTPP) appointed Barbara Zvan to the roles of senior vice-president, strategy and risk and chief investment risk officer.


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 actuarial 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 bonnie.robinson@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.

 
Insight Decision Solutions
RGA Canada
On the Horizon


By Craig A. Allen, FCIA

Our profession, compact and collegial as it is, has developed a number of specialties, each with its own concepts, vocabulary, and culture. There’s no question that specialization has beneficial effects—giving us the time and focus to innovate and develop solutions to difficult problems, both emerging and long-standing.

Yet specialization can put us into silos that isolate us from other actuaries with complementary skills and valuable perspectives. The 2015 Actuarial Evidence Seminar aimed to dial back the splintering effects of specialization. It did so by aiming its spotlight on a set of business and political challenges that are of unifying importance to several areas of practice. Kudos go to the seminar organizers Daniel Gagné and Louis Martin for arranging an illuminating two-day seminar, September 11–12, in Québec City.

The Seminar

The Actuarial Evidence Seminar is a very well-attended specialty seminar on the CIA calendar (relative to the number of actuaries in its practice area). An annual event since 2000, the two-day seminar attracts some 50 actuaries every year, from across Canada (out of approximately 85 actuarial evidence practitioners). Costs and registration fees are kept low, suiting the entrepreneurial nature of this area of practice.

The Unifying Focus for the 2015 Seminar

The civil justice system and the system of compensation for lost earnings and medical care arising from personal injuries are the common ground that brings actuarial evidence together with several other actuarial practice areas, including

  • Property and casualty insurance;
  • Life insurance in the form of structured settlement annuities;
  • Public and private health insurance covering a portion of the cost of care;
  • Private disability insurance coverage;
  • Social insurance, including the programs of the Canada Pension Plan (CPP), Québec Pension Plan (QPP), and workers’ compensation; and
  • Investments.

The objective of the first day of the 2015 seminar was to raise awareness of this common ground, through the specific example of Canada’s auto insurance systems. Seminar participants and attendees included distinguished guest speakers, more than half a dozen first-time attendees from the property and casualty area of practice, and a core of actuarial evidence practitioners.

Auto Insurance

The provinces have established distinct systems for compensating motor vehicle losses, and are working to improve those systems every year. The systems primarily vary across two dimensions:

  • The extent of government involvement and administration; and
  • The balance of tort vs. no-fault compensation arrangements.

The seminar compared the systems and the reforms of those systems, in terms of both cost-effectiveness and desirable outcomes—from the perspectives of injured parties, providers of insurance, and the consumer.

Marie-Hélène Malenfant of the Société de l'assurance automobile du Québec (SAAQ) and special guest speaker Professor Daniel Gardner of Laval University set out the structure and performance of Québec’s government-operated, pure no-fault system as a baseline for comparison of the other systems.

The Ontario system and its 2014 reforms were then analyzed by three special guest speakers: Ontario Trial Lawyers Association president Maia Bent, the Insurance Bureau of Canada’s Ryan Stein, and consultant Willie Handler, previously of the Financial Services Commission of Ontario. The most recent Ontario reforms have shifted the balance of compensation from no-fault benefits to tort compensation, thereby heightening the involvement of actuarial evidence. The focus of much of the panel’s discussion was whether the mandated processes and their costs under Ontario’s no-fault coverage are serving the objective of providing timely, cost-effective treatment of injured individuals. In the background of the discussion was the capacity of the tort system to serve the same objective.

Insurance claims process consultant Claire Louis, of Massachusetts, spoke on technological and business process changes that are creating opportunities and having an impact on the practice of actuarial evidence.

Towards the end of the day, I spoke at a session where I reinforced the theme of the common ground between actuarial evidence and other actuarial practice areas. In particular, this session explored whether the case reserve, a key operational metric of the property and casualty insurance company, is a bottleneck to communication between actuarial evidence practitioners and property casualty actuaries—two sets of actuaries with similar skill sets and much to share with each other.

Further Collaboration between Actuarial Practice Areas – and with Non-Actuaries

Gavin Benjamin and Jamie Jocsak, representing the designated group reviewing the pension commuted value standard, discussed the review of the standard—a review that will span both pension practice and actuarial evidence practice. Vocational rehabilitation expert François Laflamme provided an update on a key input that actuarial evidence practitioners receive from a complementary area of expertise. These sessions further reinforced the theme of interconnectedness.

Technical Sessions

The remainder of the seminar put the focus on technical sessions crucial to the practice of actuarial evidence. Sessions on marriage breakdown practice, damages in fatalities, and the impact of disability on earnings expanded the actuarial evidence tool kit.

Summing Up

The points of contact of the actuarial profession are many in the system of compensation for personal injury. Yet the specialization of our profession may be fragmenting our input into the efforts of governments to improve upon that system. The actuarial evidence area of practice plays a key role in the functioning of the system, and was pleased to host the wide variety of system participants for the discussion at the 2015 Actuarial Evidence Seminar.

The 2016 Actuarial Evidence Seminar takes place September 23–24 in Toronto.

Craig A. Allen, FCIA, is Chair of the Committee on Actuarial Evidence.

 
Committee Profile

 

By Paul Lai Fatt, FCIA

1. During the past 12 months, what projects has the committee completed?

These have been very exciting times for the committee, as we released a New Members Committee Survey in November/December 2015, and received the results at the beginning of this year. It was a lot of work for the committee to develop the survey and draft questions. Our goal was to focus on new members and get at the CIA’s value proposition. Rather than telling new members what they need, it’s better for the CIA to find out from new members what the CIA is doing well or not, and what it can do better.

2. What is the result of that work, i.e., what impact has it had (or will it have)?

The New Members Committee Survey is an ongoing project, as we are now in the process of drafting a summary report with recommendations that we can bring to the Member Services Council (MSC). We hope our recommendations will help the CIA better serve its new members by addressing concerns raised in the survey responses. However, any decisions on implementation of such recommendations would come from the MSC and other governing bodies.

3. What has been the highlight of the committee’s work so far, and why?

The highlight has certainly been the New Members Committee Survey, which is still in process. The committee has also benefitted from the decision, about 18 months ago, to invite a representative of the Actuarial Students National Association (ASNA), to join the committee. Jonathan Bondy attends meetings and, as a young person at the start of his career, provides a different perspective that is invaluable to the committee. Having an ASNA representative participate in the work of the New Members Committee is something we will maintain going forward.

4. What projects are still underway or due to begin in the coming months?

Our main work in the coming months will be preparing the report and recommendations from the results of the New Members Committee Survey. There are a lot of responses and comments to go through. It will probably take three-to-six months to get a final report to the MSC. Should any of our recommendations be accepted, it is possible that we would be involved in their implementation, but that has not been determined at this point.

We are also looking at networking and promoting the CIA to universities. Specifically as a result of our ASNA representative reaching out to me, I will be speaking at the first Atlantic Canada Actuarial Student Conference on March 12, 2016 at St. Francis Xavier University in Antigonish, Nova Scotia.

5. How has serving on this committee benefitted you? What is the most appealing aspect?

The most appealing aspect of serving on the New Members Committee is being able to have a voice in our profession. For me, one of the discouraging results of the survey was the general perception of our profession by our members. "Why did you become an actuary? –Love math." "What do actuaries do? – Risk management." "What is the purpose of the CIA? – Standards setting."

Why does the CIA exist? As actuaries, among other services, we help design property insurance products to protect people from floods and accidents, health products for illness, and pension systems that are robust. I think that as a profession we have a good story to tell, and we don’t tell it. I don’t think my voice would be heard without my involvement in the New Members Committee. I am happy to educate people on the profession.

Paul Lai Fatt, FCIA, is Chair of the New Members Committee.

 
Institute News


By Lynn Blackburn

As part of the ongoing desire to ensure that CIA members are considered leading professionals in Canada, the Board regularly looks at the CIA’s infrastructure, including its Bylaws, Rules of Professional Conduct, and policies, to ensure that they are sufficiently rigorous and consistent with other professions in Canada.

In early February, the Board opened a consultation period on a set of proposed changes to the Bylaws, Rules of Professional Conduct, and several CIA policies related to

  1. Compliance with the Continuing Professional Development Requirements (CPD); and
  2. A requirement for the disclosure of a "criminal conviction". For the purposes of this material, "criminal conviction" refers to any criminal offence, penal offence punishable by incarceration, or offences of a similar nature for which the individual is convicted, found guilty of or pleads guilty to, and for which he or she has not been granted a record suspension (formerly a pardon), or a disciplinary determination of guilt. (Note that records of CIA Disciplinary Tribunal decisions are already on file and would therefore not require further disclosure).

Highlights of Proposed Changes

All of the relevant material, including an extensive Q&A can be found here. Highlights of the proposed changes appear below.

Compliance with Continuing Professional Development (CPD)

  • Members who are not practicing and/or not doing CPD would be allowed to maintain their designation, but it would be made clear to the public that they are not compliant with the CPD requirements (i.e., a "(non-practicing)" qualifier would be appended to the FCIA/ACIA designation).
  • No changes are being proposed to the CPD requirements themselves. The minimum requirements would remain as they are currently listed in section 2 of the CPD Qualification Standard (QS) (e.g., minimum of 100 hours, etc.).
  • The exemptions allowed from compliance with the CPD requirements would now be limited to the following:
    • Members who are not "Practicing Members" (as now defined in bylaw 1.01 (15.1));
    • Parental leave;
    • Still writing actuarial exams;
    • Special circumstances (e.g., disability); and
    • Compliance with another actuarial association’s CPD requirements.

Disclosure of Criminal Convictions

  • All new applicants to the Institute, as well as existing members who are not fully retired would be required to disclose a criminal conviction within 30 days of the date of the conviction. As a transitional measure, disclosures by existing members of all past criminal convictions would need to be made to the Institute within 30 days of the effective date of the proposed changes.
  • The Committee on Professionalism within the CIA (PROF) would initially assess all disclosures (from applicants and existing members) based on a clear set of assessment criteria and procedures, to determine whether or not the criminal conviction warrants further action on the part of the CIA. This process would be defined and described in a new policy. Note that the Head Office would keep the identity of the individuals who disclose a criminal conviction confidential, and transmit only pertinent information about the criminal conviction to the PROF for assessment.
  • For existing members, in cases where the PROF determines that the criminal conviction could impair the professional’s ability to provide professional services, the matter would be referred to the Committee on Professional Conduct (CPC). The CPC would then initiate the same disciplinary process as all other complaints or information received by the CPC. No new disciplinary measures are being proposed.

Why Should CIA Members Support These Changes?

1. The CIA is a self-regulating profession. When it comes to professionalism and professional responsibilities, CIA members must impose rules and standards on themselves that will serve to protect the public interest. It is a serious responsibility and one which we must not take lightly, when the need for change arises, in order to protect the status of the profession.

2. The current requirements with regard to CPD compliance, and also criminal convictions, are too passive in nature, and much less stringent than other professions:

  • In order for a member of the public to find out if a CIA member has confirmed that they meet the CPD requirements, the public must approach the CIA and check the member directory for a CIA member’s CPD compliance status (i.e., coloured dots next to the name). The proposed changes would require that non-CPD compliant members not promote themselves to the public as an FCIA/ACIA, or else be in potential breach of the Bylaws and Rules of Professional Conduct.
  • If a member has a criminal conviction on his or her record, the CIA currently has no mechanism for finding out in a timely manner, in order to conduct a further investigation pursuant to Rule of Professional Conduct #11. The proposed changes would require that a member disclose all criminal convictions, so that the CIA could take action in a timely manner, to protect the public, if necessary.

3. The proposed changes put the responsibility squarely on the member, for his or her own choices and actions.

  • If a member chooses not to meet the CPD requirements, he or she would remain a Fellow or Associate of the CIA, but would be choosing the option of qualifying their FCIA/ACIA designation (i.e., "(non-practicing)"). All other rights, privileges, and benefits would continue.
  • If a member has a criminal conviction on his or her record, the member would be obliged to disclose it to the CIA in a timely manner, which would in turn allow the CIA to make a timely and appropriate determination as to whether or not the criminal conviction affects the member’s ability to provide professional services, always with an eye on protecting the public interest.

4. Non-practicing/retired members would be able to retain the use of the new "qualified" designation (e.g., FCIA(non-practicing)), which will make it possible for these individuals to remain enrolled in the CIA once they discontinue their CPD. This is desirable for the Institute, from a cultural, historical, and reputational perspective.

Members are asked to review and consider the proposed changes and to submit any comments to Lynn Blackburn, director, professional practice and volunteer services at lynn.blackburn@cia-ica.ca no later than March 21, 2016.

Lynn Blackburn is director, professional practice and volunteer services at the CIA Head Office.

 

 

Bring your voice to the CIA’s leadership table and stand as a candidate in the upcoming Board elections. This is a great opportunity to impact the future of the actuarial profession in Canada and play a role in CIA governance. 

Current Board openings include four Director positions (three-year terms) and President-elect (one-year term, three-year commitment). Any member who wishes to run for one of these positions, and who meets the nomination requirements set out in the CIA Elections Rules of Procedure, will have their name appear on the ballot.

The Elections Committee is actively identifying and encouraging potential candidates to run. It aims to achieve proportional representation by region and practice area on the Board.

If you are interested in nominating an individual or submitting your own name for this year’s ballot, please contact Shirley Ann Mahon at the CIA Head Office before April 1.

This is your opportunity to serve and support your profession.

 


By Robert Berendsen, FCIA

In the May 2015 (e)Bulletin, I provided an overview of the International Association of Insurance Supervisors (IAIS) and its work to develop group-wide global capital standards to be applied to internationally active insurance groups (IAIGs). I also explained the Institute’s contribution to that effort. This article provides a follow-up on those activities and describes work by the International Actuarial Association (IAA) to develop International Standards of Actuarial Practice (ISAPs). These international activities will undoubtedly have an impact on the daily work of Canadian actuaries—maybe not next month, but perhaps sooner than you think, even if you work for a smaller insurer.

International Capital Standards for Insurers

The International Association of Insurance Supervisors (IAIS) represents insurance regulators and supervisors of more than 200 jurisdictions in nearly 140 countries, constituting 97 percent of the world's insurance premiums. Its objectives are (1) to promote effective and globally consistent supervision of the insurance industry in order to develop and maintain fair, safe, and stable insurance markets for the benefit and protection of policyholders; and (2) to contribute to global financial stability. Canada’s Office of the Superintendent of Financial Institutions (OSFI), Québec’s Autorité des marchés financiers (AMF), and British Columbia’s Financial Institutions Commission (FICOM) are all members of the IAIS.

A key IAIS project is to develop international capital standards for insurers. This project includes three planned steps. The first step was the development of a Basic Capital Requirement (BCR), a very simple, factor-based capital requirement, to be applied to global systemically important insurers (G-SIIs), of which there currently are nine globally (none based in Canada). The BCR was completed in 2014.

The second step was the development of Higher Loss Absorbency (HLA) requirements, again to be applied to G-SIIs. The HLA builds on the BCR and addresses additional capital requirements to reflect G-SIIs’ systemic importance in the global financial system.

The third step, being conducted in parallel, is the development of the Insurance Capital Standard (ICS), which will have wider applicability than the BCR and HLA; i.e., it will be applicable not only to G-SIIs but to all IAIGs, of which there are expected to be about 50, including the largest Canadian insurers.

In June 2015, the IAIS published a consultation document seeking input on its proposed HLA requirements, with comments due in late August. The Institute responded. We commended the IAIS’s efforts to develop the HLA in a short time frame, but expressed two overarching concerns with the proposals. The first concern was that there is little evidence that traditional insurance causes or contributes to systemic risk, and therefore we saw little rationale to have such businesses attract HLA capital requirements. The second concern was to highlight a risk that insurers might be unable to predict and hence unable to confidently manage their HLA capital requirements.

On October 5, 2015, the IAIS announced it had completed the development of the HLA, and thereby had met a major milestone in its commitment to address risks to the global financial system from systemically important insurers. That document was formally approved by the IAIS at its Annual General Meeting on November 12, 2015, and then endorsed by G20 leaders at their summit in Turkey the following week. However, everyone understands that the BCR and HLA were developed under tight timelines and that some aspects may require refinement. To that effect, the IAIS has committed to annual reviews of the BCR and HLA to consider experience and possible impacts of changes in the environment. The first review is scheduled for 2017, allowing the collection and analysis of field-testing data in 2016 to inform that review.

As I write this article, work is now focused on completing the development of the ICS. Field testing took place in the fall of 2015, and a third round of field testing is scheduled to start in May 2016, though design and stakeholder input is currently sought to finalize the details of that round of testing. An ICS consultation document is also targeted for June 2016. The ICS is anticipated to be finalized late in 2016 or early in 2017.

In summary, significant progress was made in 2015, but even more work lies ahead. The Institute, through the International Relations Council, will continue to actively monitor developments on the ICS and offer further input to help shape its ultimate form. More information on the ICS and other IAIS activities, including a monthly newsletter, can be found at iaisweb.org.

International Standards of Actuarial Practice

The IAA’s mission as the worldwide organization of actuarial associations is (1) to represent the actuarial profession and promote its role, reputation, and recognition in the international domain; and (2) to promote professionalism, develop education standards, and encourage research, with the active involvement of its member associations and sections, in order to address changing needs. As part of that mission, it develops ISAPs. Since the IAA has no direct authority in any jurisdiction, these ISAPs are effectively model standards, intended to be adopted by member actuarial organizations. The Institute and the Actuarial Standards Board (ASB) are expected to align the Canadian actuarial standards with these ISAPs.

So far, the IAA has published three model standards, and has work in progress on at least five more, as summarized in the following table.

ISAP #
Title / Subject
Publication Date
ISAP 1
General Actuarial Practice
November 2012
ISAP 1A
Governance of Models
April 2017 (expected)
ISAP 2
Financial Analysis of Social Security Programs
October 2013
ISAP 3
IAS 19 Employee Benefits
April 2015
ISAP 4
IFRS X Insurance Contracts
April 2019 (expected)
ISAP 5
Insurer Enterprise Risk Models
April 2017 (expected)
ISAP 6
ERM Programs and IAIS Insurance Core Principles
April 2017 (expected)
ISAP 7 "Current Estimates" and other matters in relation to the IAIS capital standards
June 2018 (expected)

The IAA published exposure drafts for ISAP 1A and ISAP 5 in October 2015, with a comment deadline of March 31, 2016. The Institute, through the International Relations Council and its Committee on International Insurance Regulation developed feedback.

ISAP 1A provides guidance on appropriate model governance to manage the risks inherent in developing or using models. The fact that it covers both the development and use of models was itself controversial. It appeared to be at odds with an exposure draft issued in October 2015 by the ASB which covers the use of models but after much debate intentionally excluded the development of models from its scope. Other national actuarial standard setters have issued similar standards, in some cases including development (e.g., U.S.) and in others not (e.g., Britain). However, when reading ISAP 1A, it is clear that the proposed standard covers the governance of models, including the governance of building and using models, but does not delve into technical specifications for how to build models. In fact, the actual contents of ISAP 1A is only two pages. In the end, the Institute’s feedback was mostly supportive of this ISAP. The most significant suggested change didn’t concern the fact that the standard covers the development of models. The most significant suggested change was to permit actuaries to select models without limitation as long as it’s for exploratory analysis, i.e., not in a reporting capacity.

ISAP 5 provides guidance for the development and use of enterprise risk models, including stress tests and scenario tests, to assess solvency and produce risk metrics for enterprise risk management (ERM) programs of insurance entities. Like ISAP 1A, this one is concise, only a few pages. And as it was for ISAP 1A, the Institute was mostly supportive of this ISAP. The most significant suggested changes were to caution against (1) including a list of information sources that could be construed as a minimum requirement (though it was not believed to be meant as a minimum requirement), and (2) requiring "reconciliations" between multiple models and multiple stress tests and instead require "explanations" for the differences in results, the former being a more onerous requirement that often may not be attainable.

While neither of these two ISAPs that were reviewed in 2015 presented major concerns for Canadian actuaries when compared to existing or in-development actuarial standards of our own, we remain at the ready to offer the Canadian perspective and expertise to help ensure this trend continues.

If you have any questions about the above international developments, feel free to contact me.

Robert Berendsen, FCIA, is Chair of the Committee on International Insurance Regulation.

 

 

As part of the CIA’s 50th anniversary celebrations, the Institute created a written history of the organization. Since the story of the CIA is truly that of its members, whose collective efforts have allowed actuaries to thrive as a profession, we decided that a unique way to present our history would be to let our members tell that story in their own words.

Our history. Our achievements. is an oral history of the CIA. Over 40 of our members, including past presidents and our current president, shared memories of their experiences with the CIA, and together their words present the history of the organization in a very personal way. These members reflect on the CIA and actuarial developments over the past 50 years, including the establishment of the CIA, the CIA in the public eye, the establishment of the Appointed Actuary, and the international role of the CIA and Canadian actuaries. Photos, perspectives on the CIA presidency, and thoughts on actuaries as the professionals of the future round out this special book.

Our history. Our achievements. is free for members. The book will be available in late March.

Don’t miss out on this CIA memento. Order your copy of Our history. Our achievements. today. (Note that you must log in to the members' site first.) 

 

 

The latest issue of Seeing Beyond Risk, the quarterly electronic publication, is now available on the CIA website. Each issue features contributions from well-known names in actuarial science and experts in the field, writing about topics suggested and honed by the CIA Editorial Panel, readers, and Institute members.

This issue features an article from Robert L. Brown, FCIA, FSA, ACAS, who compares the benefits and disadvantages of defined benefit (DB) and defined contribution (DC) plans. Many employers have backed away from DB plans because of perceived costliness due in part to increased longevity and low rates of investment return. In turn, DC plans including Registered Retirement Savings Plans (RRSPs) have faced several crises, also due to increased life expectancy and lower rates of return.

Mr. Brown concludes that pooled target benefit pension plans (PTBPPs) offer a pension model that mitigates the risks of DB and DC plans so that employers/sponsors and workers end up with most of the advantages of both types of plans. For the plan employer-sponsor, a PTBPP is a DC plan, since the employer-sponsor’s responsibilities end when the stipulated contribution is made. For the worker, a PTBPP is a DB plan, but the benefit is not guaranteed.

We are sure you will find this article informative and thought-provoking, and we encourage you to distribute it among your friends and colleagues.

 


Last year, the CIA ran the Back to School project as a special 50th Anniversary venture to help spread knowledge and awareness of the actuarial profession among high school students. CIA members from across Canada volunteered to make presentations to high school math students. The results were so good that we decided to make the project part of the CIA’s annual plan.

Last year, 18 members made 28 presentations to a total audience of 1,100 students. The presentations ranged from small groups in classrooms to auditoriums with over 100 students. There was a problem solving contest, The Million Dollar Problem, and 24 students completed the calculations and entered the contest to win an iPad.

Once again we are asking interested members to get involved by contacting the head of a high school mathematics department and offer to speak to a grade 10–12 class. This could be the school that your own child attends, another one in your community, or maybe the high school you attended, especially if you grew up in a remote area where actuaries do not traditionally work.

The Institute has a Back to School package to help volunteers deliver a consistent message. The package includes a guide on how to arrange a visit, a PowerPoint presentation, short clips from movies that help introduce broad topic areas for discussion to a teen audience. As well, there is a new Million Dollar Problem contest, with this year’s prize being an iPad Air 2.

For more information or to get involved in the 2016 Back to School Project, please contact Eric Mastropietro at eric.mastropietro@cia-ica.ca.

 


The CIA Head Office is pleased to welcome Nathan Pilbrow to the team in the new position of coordinator, digital marketing.

Nathan is a multi-talented, professionally trained graphic designer. His responsibilities will include designing communications materials (presentations, digital newsletters, event programs, etc.), designing, building, and maintaining the CIA’s social media presence, and assisting with website content management by creating and designing web pages, website postcards, banners, and so on. In addition, Nathan will monitor website performance and analytics to ensure that members are able to access the information they need.

Nathan most recently worked at the Canada Green Building Council as their graphic and web coordinator, responsible for all their graphics related to their printed materials, and for maintaining their corporate website.

Nathan’s design, social media, and digital content management skills will make him a valuable member of the CIA’s communications and marketing teams. Welcome, Nathan!

 

             

Each year, the CIA sponsors a media campaign to promote the actuarial profession to key non-members such as politicians, regulators (federal, provincial, and territorial), media, business leaders, academics, and the general public. Past campaigns focused on enterprise risk management. This year the focus is on the emerging practice area of healthcare.

The theme of the campaign is "get a second opinion", and positions actuaries as professionals whose specialization in statistics, predictive modelling, and risk mitigation can help highlight and mitigate the financial risks associated with an aging population, increasing demand, and evolving treatments in healthcare. The purpose is to make decision-makers aware of the role actuaries can play in helping to find solutions to the complex challenges Canada will face in the future.

"The goal is to promote the profession so that people know the skill sets actuaries bring to the table to help Canadians," says Jacques Leduc, CIA director, operations, finance, and administration, who oversaw the development of the campaign.

Marketing and communications agency Banfield created a campaign that includes video, print ads, advertorials, digital advertising, social media and web pages on the CIA website. The campaign will run nationally in a variety of media, including CBC and Radio-Canada (television and website), La Presse, The Globe and Mail (including three feature articles with commentary from Pierre-Yves Julien, Chair of the CIA Health Committee), The Hill Times, and Policy Options for six weeks.

The campaign will increase the Institute’s presence on social media, with weekly posts to Facebook, Twitter, and LinkedIn featuring a number of topics from "What is an actuary?" to the role of actuaries in healthcare planning. Members are encouraged check out the campaign and share the content on their social media channels. "By sharing our posts to their personal networks, members can further elevate the profession and help emphasize the important role actuaries can play in healthcare and other fields," says Kelly Fry, CIA marketing manager.

The website includes a one-minute video that summarizes the issues facing Canada’s healthcare system, and presents actuaries as professionals whose skills can "help us make better decisions for Canada’s future". Visitors to the website can also read Stéphane Levert’s 2013 report Sustainability of the Canadian Health Care System and Impact of the 2014 Revision to the Canada Health Transfer. Effective graphics illustrate projected healthcare costs, and the website provides a link to the main CIA website’s overview of actuaries. Finally, a form allows visitors to send questions to the CIA about healthcare issues.

"We are very excited about this year’s campaign," adds M. Leduc. "This is the first time we have delivered an integrated marketing campaign that allows us to reach Canadians and to promote actuaries on so many different platforms."

 

James Doherty, FCIA (1987), FSA (1987), FNZSA (1987)

James Doherty passed away on February 18, 2016, after battling lymphoma and leukemia. A graduate of the University of Waterloo with a BA in mathematics, he worked for over 35 years as an actuary, most recently as the senior director at the Office of the Superintendent of Financial Institutions (OSFI). Prior to joining OSFI, he was a partner of Ernst & Young. Mr. Doherty was particularly active with the International Actuarial Association (IAA) and served as Vice-chair of the CIA’s International Relations Committee.

 
Events News


Already 2016 has been a busy year for webcasts, with five presented in the first two months, and three more on the horizon.

January’s webcasts, on diverse topics, included the following:

"The webcast on university actuarial education was particularly unique," said Joseph Gabriel, CIA staff actuary, education. "It’s a topic that has never been covered before by the CIA." Attendees learned about how actuarial concepts are tested in schools, and the webcast included a discussion about new technology. "It was in-line with the latest global trends in actuarial education, especially the IAA’s [International Actuarial Association] upcoming syllabi," he added.

The Assessing the CIA’s Reputation and Engagement webcast presented the results of the 2015 impression audit by Greenberg Quinlan Rosner (GQR). Among the many interesting insights Graeme Trayner, vice-president, brand and communications practice at GQR, presented was the fact that the actuarial profession is highly ethical. It has never been involved in any scandals, in contrast to banking, financial and other professions. He also noted that what some may see as weaknesses for actuaries ("boring and dull", "too narrow a lens", "sticking rigidly to the numbers") are actually positives, since they show that facts are essential, a deep understanding of specific numbers and risks is crucial, and actuaries are evidence-led professionals in contrast to others who may be speculative and agenda-driven, particularly in the context of public affairs.

Upcoming Webcasts

CIA webcasts are an excellent opportunity to learn about current issues of interest to actuaries, and to earn continuing professional development (CPD) credit. The Institute also holds webcasts to inform members about changes within the CIA that may affect them.

The Consultation on Proposed Changes Related to the Protection of the Public Interest affects all CIA members. Two upcoming webcasts on March 10 (one in French, one in English) will provide an overview of the proposed changes, as well as an opportunity for members of the CIA leadership involved with the project to answer your questions. The webcast is free; all members are encouraged to register.

Visit the Upcoming Webcasts page on the CIA website for information on other future webcasts, including Climate Change Impacts for Life and Health Actuaries on March 22.

"Our goal is to be the main provider of CPD education to our members," adds Gabriel. "We are always looking for suggestions for topics. If members are interested in sharing their expertise on relevant actuarial topics, don’t hesitate to contact me." You can reach Joseph Gabriel at joseph.gabriel@cia-ica.ca.

 
Volunteers on the Move

Eligibility and Education Council

The following people have been (re-)appointed to the (sub)committees named below:

  • 2016 Practice Education Course (PEC) Organizing Committee: Thomas Hinton (Chair), Wes Foerster, Erin Crump, Haripaul Pannu, and Jean-François Poitras;
  • PEC Organizing Committee subcommittees:
    • Group Benefits Exam Subcommittee: George Wang;
    • Retirement Benefits Exam Subcommittee: Bradley Bulger and Stephen Cheng;
    • Individual Life and Annuities Exam and Finance and Investment Exam Subcommittees: Marc-André Tourigny;
  • Committee on Continuing Education (CEC) subcommittees:
    • Corporate Life and Health Subcommittee: Alison Rose (Vice-chair), effective December 1, 2015;
    • General Business and Professionalism Subcommittee: Frank Grossman, effective December 1, 2015;
  • Academic Relations Committee: Patrick Kavanagh, Christiane Lemieux, and Jeffrey Pai, effective December 1, 2015; and
  • Eligibility Committee: Terence Narine (Vice-chair), effective January 19, 2016 and Marie-Eve Nadeau, effective February 1, 2016.

A Task Force on the Future Vision of CIA Education has been created with Angelita Graham (Chair), Richard Gauthier, and Rémi Villeneuve as members, with others to be confirmed.

The following people have completed their term with, or resigned from, the (sub)committees named below, and have left with thanks:

  • CEC subcommittees:
    • Reinsurance/Individual Life & Health Subcommittee: Emile Elefteriadis, Amit Malhotra, and Jessica Newman;
    • Group Life and Health Subcommittee: Louise Lessard;
    • Property and Casualty Insurance Subcommittee: Camille Minogue;
  • Academic Relations Committee: Frédérick Guillot;
  • Eligibility Committee: Sarah-Salimah Bhanji;
  • Accreditation Committee: Rachit Agarwal;
  • 2016 PEC Organizing Committee subcommittees:
    • Retirement Benefits Exam Subcommittee: Don Tettmar and Stephen Cheng (Chair);
    • Individual Life and Annuities Exam and Finance and Investment Exam Subcommittees: Jennie Leung, Sophie Provencher, and Katherine Russell;
  • Accreditation Committee: Marcus Robertson (SOA Observer).

David Stalker, Erin Crump, Jean-François Poitras, and Pierre-Paul Renaud completed their terms as CIA liaisons to Society of Actuaries (SOA) curriculum committees, and leave with thanks.

Jason Vary completed his term as CIA liaison to the SOA Professionalism Education Management Committee, and leaves with thanks.

Member Services Council

The following people have been (re-)appointed to the (sub)committees named below:

  • Research Committee: Taylor Wasko, effective December 11, 2015;
  • Research Committee subcommittees:
    • Annuitant Experience Subcommittee: Taylor Wasko, effective December 11, 2015 and Khurram Tehseen, effective December 13, 2015; and
    • Segregated Fund Experience Subcommittee: Zhongfu (Pete) Zhao, effective December 5, 2015.

The following people have completed their term with, or resigned from, the (sub)committees named below, and have left with thanks:

  • Annuitant Experience Subcommittee: Diana Pisanu and Peter Snyder, effective December 11, 2015;
  • Research Committee: Diana Pisanu, effective December 11, 2015;
  • Pension Advisory Committee: Marcus Robertson, effective January 11, 2016; and
  • Enterprise Risk Management Applications Committee: Mark Struck, effective December 12, 2015.