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

Canadian Institute of Actuaries/Institut canadien des actuaires

April 2017
Elliott Bauer
D.W. Simpson & Company
Eckler Ltd.
President's Update

By Dave Dickson, FCIA
CIA President

The CIA Board met on March 23, with a full agenda. This article presents some highlights.

CIA Restructuring Project

The Board received an update on our restructuring project to dramatically change the structure of our Board, councils, and committees and how they work. The project will result in a more efficient CIA and allow us to make decisions quicker and move ahead at a faster pace with appropriate initiatives. The Board approved the beginning of a consultation process on restructuring. The first stage of consultation will include obtaining and evaluating input from key councils and committees. At a later stage, we will present the new structure to all members for comment. Bylaw changes will be required to implement the new structure; the earliest these changes would happen would be June 2018.

Education

For over 50 years, the CIA has tapped into the Society of Actuaries (SOA) education system to educate and qualify most of our members. We have been doing so without a formal agreement as to how the partnership between the CIA and SOA would work. The Board reviewed a draft agreement and gave authority to the CIA President to sign it with some revisions. This agreement will involve us more with the development of exam material and exams. It will also better brand the SOA website and exam material to ensure that Canadians writing exams realize that the CIA is a partner with the SOA.

Budget

The Board approved the 2017–2018 budget. This will result in a modest increase in dues.

Focus Groups and Member Engagement

As part of our project to improve member engagement, we have been running focus groups with our members to get feedback on a variety of topics including career development, relationship with professional associations, and areas where the CIA could better support members. Ipsos Public Affairs, the company that ran the focus groups, presented its preliminary report. We will receive a more detailed report prior to our next Board meeting.

Key Performance Measures

The Board discussed better measuring the success of the CIA. Executive Director (ED) Michel Simard presented a report on key performance measures for the CIA’s success. A small Board task force will work with the ED and his staff on developing some key indicators that the Board can use to measure the success of the CIA.

New Member’s Committee Report

The Board received a report from the New Members Committee which had surveyed new members on a variety of topics including volunteer experience, CPD, and communication materials. As a result, the committee has many recommendations to improve how the CIA serves its members; a number of CIA committees are following up on these recommendations.

Continuing Professional Development Review

The Task Force on Continuing Professional Development (CPD) Review presented its report. The Board approved the release of the proposed changes to the CPD requirements last December, and the task force sought input from members in January and February of this year.

Of particular importance were the proposed principles: CPD should be mandatory for all FCIA/ACIAs with exemptions being granted for retirement, family leave, and personal circumstances. Consequences for non-compliance would be suspension of membership.

It is recommended that the proposed timeline for implementation be extended to January 2018, with member confirmation of the necessary bylaw amendments in June 2018, in order to allow a further consultation with members in fall 2017.Should members approve any proposed changes, bylaw amendments would be planned for June 2018.

If you have any questions or comments, feel free to contact me at president@cia-ica.ca.

Dave Dickson, FCIA, is President of the Canadian Institute of Actuaries.

 
In Focus

By Ty Faulds, FCIA

ASB Membership

The Actuarial Standards Board (ASB) is very pleased to welcome Conrad Ferguson back to our board to take over the chair role when my term ends this June. The current membership of the ASB includes Stephen Cheng, Ty Faulds (Chair), Conrad Ferguson (Vice-chair), Jacqueline Friedland, Alexis Gerbeau, Edward Gibson, Mario Marchand, Josephine Marks, Geoffrey Melbourne, Dave Oakden, Catherine Robertson, and Tony Williams, and on an ex officio basis, Pierre Dionne, the Chair of the Practice Council, and Michel Simard, Executive Director of the CIA. Please feel free to approach any of us with any suggestions or questions you might have.

General Initiatives

General Standards

The designated group’s (DG) (chaired by Paul Della Penna) exposure draft to Revisions to the General Standards (Part 1000) was published on February 8, 2017 with a comment deadline of April 30, 2017. Final standards are expected to be effective on or after August 31, 2017. As it is not expected that these changes would affect normal practice, early implementation will likely be permitted.

Peer Review

In my last update, I mentioned that the ASB had asked the DG on General Standards to look at integrating peer review into part 1000 of the standards in a way that is generally reflective of what the UK has recently done, and would make us more consistent with the International Standards of Actuarial Practice (ISAPs). As a reminder, the UK practice standards have introduced a new standard on the Review of Actuarial Work that has addressed a number of the concerns you raised when we last considered the treatment of peer reviews. The purpose of the UK standard is the following:

To set out the responsibilities of all Members in relation to the application of Work Review, which may include Independent Peer Review, to promote the quality of Actuarial Work.

After discussion with the DG, in order to ensure full due process is followed for this initiative, the ASB decided to set up a separate DG (chaired by Jacqueline Friedland). We expect to release a notice of intent on these changes shortly.

The Use of Models

Thanks to the extensive feedback received on this initiative and to the DG (chaired by Bob Howard) for their careful consideration of your suggestions, the Revisions to General Standards to Reflect the Use of Models were approved at our December 7, 2016 meeting. These were published on January 26, 2017 with an effective date of January 1, 2018. Early implementation is encouraged.

Mortality Improvements

As mentioned in my last update, the Task Force on Mortality Improvement (chaired by Alexis Gerbeau) was notified of a potential delay in the Statistics Canada publication of 2013 deaths. In order not to further delay the publication of their cross-sector report while still assessing the implications of the slowing down of mortality improvement trends observed in the UK and the U.S., the task force decided to base their analysis in part on an examination of the historical rates of mortality improvement up to 2011 in the general Canadian population data recorded in the Human Mortality Database, supplemented by additional data for the Canadian Old Age Security Program plan up to 2015. The task force’s report is expected to be released in the near future and a webcast to discuss it is planned.

Pension Initiatives

We expect to release exposure drafts for a number of pension initiatives before the Annual Meeting in June and will be discussing them there. These include the following:

  • Amendments to Section 3500 of the Practice-Specific Standards for Pension Plans – Pension Commuted Values (DG chaired by Gavin Benjamin);
  • Revisions to Subsection 3260 of the Practice-Specific Standards for Pension Plans – Reporting: External User Report; Advice on the Funded Status or Funding of a Pension Plan (DG chaired by Geoffrey Melbourne); and
  • Amendments to Establish Standards of Practice in respect of Calibration of Stochastic Models used for the Purposes of Certification of Pension Plan Funding Requirements (new Subsection 3270 Stochastic Modelling) (DG chaired by Todd Saulnier).

We would appreciate your feedback on these proposed changes as they are released.

In addition, we expect to release a notice of intent to Incorporate the Principles of ISAP 3 – International Accounting Standards (IAS) 19 Employee Benefits into the Canadian Standards of Practice (DG chaired by Catherine Robertson). This model standard includes a level of detail not normally found in our standards which we will be discussing how best to handle with the DG.

The ASB will consider whether changes should be made in the mortality improvement guidance for pension commuted value and marriage breakdown after we review the task force’s report.

A DG focused on assumptions underlying marriage breakdown capitalized costs is expected to be formed in the near future after enough progress has been made on pension commuted values.

Insurance Initiatives

With many thanks to the DG chaired by Josephine Marks, the revisions to the Practice-Specific Standards for Insurance (Part 2000) arising from our quinquennial review was published on February 3, 2017 with an effective date of April 15, 2017. Early implementation of this standard is permitted. With this behind us, we are now well-positioned to release initial communications and exposure drafts for a number of the insurance initiatives before the Annual Meeting in June and will be discussing them there. These include the following:

  • An initial communication for the revision of the Promulgation of Prescribed Mortality Improvement Rates and Associated Margins for Adverse Deviations within the Practice-Specific Standards on Insurance Contract Valuation: Life and Health Insurance (DG chaired by Dominic Hains).
  • An exposure draft to incorporate changes as a result of the new Life Insurance Capital Adequacy Test guideline from the Office of the Superintendent of Financial Institutions and the corresponding Capital Adequacy Requirements Guideline for Life and health insurance from l’Autorité des marchés financiers (DG chaired by Stéphanie Fadous).
  • An initial communication for the revision of the Promulgations of the Ultimate Reinvestment Rates and Calibration Criteria for Stochastic Risk-Free Interest Rates in the Standards of Practice for the Valuation of Insurance Contract Liabilities: Life and Health (DG chaired by Jean-Yves Rioux).
  • An initial communication for the revision of the Promulgation of Calibration Criteria for Equity Returns Referenced in the Standards of Practice for the Valuation of Insurance Contract Liabilities: Life and Health (DG chaired by Dean Stamp).

I have discussed these initiatives in more detail in my previous updates and look forward to your feedback on the proposed changes when they are released.

Public Personal Injury Compensation Plans

Earlier this year, the ASB formed a DG to review Part 5000 – Public Personal Injury Compensation Plans (PPICP) as it has been more than five years since this standard was reviewed. The primary goals of this DG will be to provide additional clarity and broaden the scope of the section to provide more complete and appropriate information to the stakeholders to enable more informed decision making. The review will also consider possible inconsistencies with other standards and the potential impact of IFRS 17. Recruiting for this DG is underway and is expected to be completed shortly.

International Developments

The ASB remains committed to converging to the model standards (ISAP’s) released by the International Actuarial Association (IAA) and, in addition, to the update on peer review (convergence to ISAP 1) and notice of intent to incorporate the principles of ISAP 3 mentioned above; the release of the Final Standards of Practice – Establishment of Social Security Practice-Specific Standards (Part 7000) (DG chaired by Ed Gibson) on March 1 with an October 15, 2017 effective date was another major step toward this goal. Early implementation of this standard is permitted.

While the IAA just released ISAP 1A – Governance of Models on November 21, 2016, the development of this standard was closely followed as we developed the changes to our standards reflecting the use of models. We consider our standards substantially converged to this model standard and do not plan on making any further changes at this point.

The IAA also released ISAP 5 – Insurer Enterprise Risk Models on November 21, 2016. The ASB will consider any changes required to converge to this model standard during the ASB’s next planning cycle.  

Ty Faulds, FCIA, is Chair of the Actuarial Standards Board.

 
Actuaries on the Move

Career developments

Pierre Gignac was appointed to the Board of directors of Tembec.

Jonathan Hede joins Empire Life as its vice-president for risk management.

Actuaries in the media

Stephen Eadie has written an article on variable annuities for the Global Risk Institute.

Fred Vettese’s article on choosing when to retire appeared in the Financial Post


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
Acutarial Design
RGA Canada
Institute News

By Carmelina Santamaria

During this year’s National Volunteer Week (April 23 to 29, 2017), the CIA will honour its 550-plus volunteers serving on over 50 councils, committees, and task forces, as part of a celebration that recognizes the hard work and commitment of Canadian volunteers. Our volunteers are the lifeblood of the CIA’s work which serves Canadians as well as the actuarial community. Without their contributions, projects such as the Actuaries Climate Index, Educational Note on the Use of Models, and the 2017­–2019 CIA Strategic Plan, simply would not happen.

Special Recognition

During National Volunteer Week, we will launch a special web page to highlight our volunteers’ key milestones and recognize their vital importance for all CIA members.

We will continue our annual tradition of honouring our volunteers who have made a significant contribution to the Institute, at the 2017 CIA Annual Meeting Volunteer Awards Presentation, taking place in Québec City on June 21. Our gold, silver, and bronze recipients will be notified in the upcoming weeks.

To all of our volunteers—watch for a special thank-you from all of us at the CIA. We look forward to honouring you and celebrating with you during National Volunteer Week and at the 2017 CIA Annual Meeting.

Not a volunteer yet? Log in today and get involved!

Carmelina Santamaria is CIA coordinator, volunteer services.

 

Past President M. David R. Brown, FCIA (1965), FSA (1960)

Former CIA president M. David R. Brown passed away March 7, 2017 in Toronto. He was 82.

Mr. Brown graduated from the University of Manitoba in 1956 as a university gold medallist with a bachelor of commerce (hons.) degree. In 1960, he joined Eckler, where he spent 55 years as a pension and benefits consultant. While at Eckler, Mr. Brown served as a consulting actuary (1960–2006), partner (1963–2002), president (1977–2000), and managing partner (1989–2000).

Mr. Brown served as CIA President from 1976–1977. His impressive volunteer experience with the CIA extends from 1965 to 2010, during which time he served multiple times on over 20 CIA groups (Board, committees, task forces, etc.), including the Elections Committee, the Professional Conduct Committee, the Committee on National Pensions, the Emerging Issues Committee, and the Task Force to Rewrite the CIA Bylaws. He also served as the Vice-president of the Society of Actuaries and a member of the Pension Commission of Ontario.

Mr. Brown contributed extensively to Our history. Our achievements., a written history of the CIA produced as part of the Institute’s 50th anniversary celebration, providing his perspective on the origins of the Institute, development of standards, the initial foray into public statements, and what it was like being President:

When I became President we had one secretary. That was it. Anything else had to be done either by the elected members or the committee chairs—whoever the volunteers were, or by their staff. The big insurance company folks had the resources to do that without too much difficulty.

Talk about staying up late at night. When I was President, the Council consisted of the three presidents and about a dozen other members. No vice-presidents, no other officers. Everything sort of fell back on the President. Our firm was also going through rapid growth and I was involved in that. So my wife’s recollection is that I had a lot of nights where I didn’t get more than three, four hours of sleep because I was trying to cover all these bases. In our firm, that was an expectation; that you would get involved in that volunteer effort.

Mr. Brown became a gold volunteer award recipient at the 2015 Annual Meeting.

M. David R. Brown obituary

 

Michael Leland, FCIA (2004), FSA (2004)

CIA member Michael Leland died February 21. He was 49. Mr. Leland worked as a pension actuary with Mercer.

Michael Leland obituary

 

The CIA Head Office will be closed April 14–17, and will reopen on April 18.

 
Events News

The 2017 Annual Meeting (AGM) promises to be an important event for members to benefit from valuable CPD opportunities. With a program featuring 47 sessions, there are topics of interest for many practice areas, including property and casualty, enterprise risk management, pension, individual and corporate life, reinsurance, and group practitioners.

“This year’s AGM, in beautiful Québec City, will feature some excellent and relevant speakers for pension practitioners, as well as other speakers of interest to all actuaries,” says June Smyth, Chair of the Pension Subcommittee of the Committee on Continuing Education. “Along with our keynote speakers, there is some excellent material on the agenda and we are very excited to share it with all of you!”

Ms. Smyth highlighted a number of sessions of particular interest:

  • Defined contribution (DC) decumulation, with Bonnie-Jeanne MacDonald along with guests from South Africa and the University of British Columbia;
  • Retirement trends with speakers Rob Brown and Anna Rappaport;
  • De-risking and longevity deals for smaller pension plans;
  • Changes to the Québec Pension Plan;
  • Tailoring the message to the audience;
  • Actuarial expertise in a case study;
  • The art of persuasion; and
  • Disclosure of criminal convictions for actuaries.

Keynote Speakers

What does a new generation using advanced technologies mean for the actuarial profession? Find out in our keynote presentations that will look at millennials and big data. Dr. David Coletto, Canada's leading expert on the Canadian millennial generation, will discuss who this generation is and what it means for the actuarial profession in the future. Data scientist and entrepreneur Jean-Baptiste Michel will talk about big data and his collaboration with Google when creating the Google Ngram Viewer—a scientific tool so groundbreaking its public release made the front page of the New York Times, the Wall Street Journal, and the Boston Globe.

Just when you think the previous program couldn't be beat, the Continuing Education Committee does it again by crafting a cutting-edge program covering a myriad of really interesting and relevant topics delivered by impressive speakers,” says Emile Elefteriadis, Chair of the General Business and Professionalism Subcommittee of the Committee on Continuing Education. “As a life and health insurance guy, some of the P&C and pension sessions are quite interesting and relevant, and I will probably attend at least one from each to broaden my perspective.”

Register Now

All this and more is happening June 21—22 at the Québec City Convention Centre.

Register today and save up to $100! Early-bird rates are available until April 13.

Québec City is known for its European charm and fantastic French cuisine. Be sure to book your stay in the official CIA block of rooms at the Hilton Québec or the Delta Québec, both adjacent to the Québec City Convention Centre and steps away from Old Québec. Rooms are subject to availability within the block and must be reserved by May 19, 2017.  

We look forward to seeing you in Québec!

 
Thoughts for Today—and Tomorrow

By Jim Christie, FCIA

Here are my thoughts on tips to be successful in your life and career. They are not in any particular order, but all of them have been helpful to me.

  • Volunteer: It is a great way to deepen your understanding of issues and learn that there are often numerous perspectives and/or approaches for any problem. As well, serving on task forces and committees significantly broadens your professional network and often helps establish your professional credibility in surprising and unexpected ways.
  • Listen: Perhaps the most important attribute you can bring to any problem is to listen carefully and openly to what others are saying. Sometimes this can be exasperating but you will often glean real insight into issues by being open and carefully weighing other positions.
  • Commitment: Whatever assignments you take on or promises you make, be committed to delivering the best-possible solution.
  • Dedication: Know what you are trying to achieve—not just this week, or this year—and focus on reaching that goal. But don’t be too single-minded. Your goals can and should evolve as you progress through life.
  • Hire strong people: Perhaps the best way to get ahead is to engage the best possible people to work with or for you. Never worry about strong individuals taking your place—that’s really what you want—so you can move on to bigger things.
  • Teamwork: Very few issues are resolved by the work of one individual. Encourage everyone on your team to work as one and to develop the best ideas or solution to your joint problem. Always be sure to give full credit to team members when your team solution finds favour.
  • Delegate: Your team will only grow stronger as members take on additional responsibilities. This also frees you to be looking at the bigger picture continually.
  • Under-promise and over-deliver: Be realistic in setting timetables and deliverables. If the proposed goal or timing is completely unrealistic, say so at the start of the project, rather than make excuses later on.
  • Be nice: Life is a long road. Try not to burn any more bridges than are absolutely necessary as you work and play. Always be polite and acknowledge help or kindness you receive from others. Similarly, always be willing to lend a helping hand or suggestions. Never ask anyone to do something you would not do yourself if the roles were reversed.

Jim Christie, FCIA, served as CIA President in 2011–2012.

 
Volunteers on the Move

Board

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

  • International Relations Council: Alana Farrell, Les Rehbeli, and Bill Weiland, effective July 1, 2017;
  • Eligibility and Education Council: Bruno Gagnon and Bruce Jones, effective retroactively, October 1, 2016;
  • Committee on Professional Conduct: Helmut Engels (effective immediately) and Hudson Lopez (effective retroactively October 14, 2016); and
  • Task Force on Continuing Professional Development (CPD) Review: Carol Moellers, effective October 12, 2016.

The Task Force on the Implementation of the Proposed Changes to the CPD Requirements has been created, effective immediately.

The following people have completed their term with the committees named below, and have left with thanks:

  • International Relations Council: Robert Berendsen, Jim Christie, and Dave Pelletier, effective June 30, 2017;
  • Eligibility and Education Council: Jeremy Bell, effective February 15, 2017;
  • Continuing Professional Development Review Task Force: René Delsanne, effective September 26, 2016; and
  • Tribunal Panel: Gilles Dufresne, effective September 16, 2016.

The Task Force on CPD Review has been disbanded with thanks.

The Task Force on the Implementation of the Proposed Changes Regarding the Protection of the Public Interest has been disbanded with thanks.

The Task Force on Restructuring has been disbanded with thanks.

Practice Council

The Modelling Task Force has been disbanded with thanks.

The revised mandate of the Enterprise Risk Management Practice Committee (ERMPC) was approved as follows:

Mission:

To be the primary source of risk management expert guidance for the actuarial profession.

In pursuit of this mission, the ERMPC will be guided by the following principles:

  1. Any guidance published by the ERMPC is intended to capture leading practices.
  2. The ERMPC will create and promote guidance material for actuaries such that actuaries applying risk management in the course of their practice (ERM, traditional, or other areas of practice) are provided clarity and insight into the range of actuarial practice. Actuaries will not be disadvantaged relative to non-actuaries practising in risk management by upholding them to unduly burdensome requirements that are not associated with other risk practitioners, unless such requirements are necessary to uphold the integrity of the profession.
  3. The ERMPC will build on existing global actuarial guidance and resources and adapt or endorse them as needed to be applicable to Canadian actuaries who practise risk management in their professional activities.
  4. The ERMPC will engage other CIA committees to provide assistance and draw upon their specialized areas of expertise. In general, where risk management is applied to a specific practice area, the ERMPC will work with that area of practice to develop new guidelines.
  5. The committee will report to the Practice Council and will liaise and work in collaboration with other CIA committees on matters of common interest and will also draw upon other resources in the CIA, CAS, and SOA Joint Risk Management Section.