Update on CAS Activities

1. Update on CAS Activities by Gail Ross Midwest Actuarial Forum September 26, 2002

2. Outline • Exam Issues • Continuing Education • Expanding Practice Areas • International Issues • CAS Election Process • The CAS at 100 • Roles of Regional Affiliates • Getting Involved in CAS • CAS Web Site • Your input

3. Exams - Travel Time • Travel time (approx. # sittings) ACAS FCAS • 1980-81 9 13 • 1989-90 11 15 • 1998-99 14 17 • 2000-02 15 18.5 • Board guidance to Admissions Committees: Expect 5 to 7 years as median time from first actuarial employment to FCAS

4. Exams - Progress per Sitting • Exam Progress = Avg. # of Exams Passed per Sitting = Avg. # of Exams Taken X Pass Ratio • Exam Progress on CAS Exams (excl. 1-4) • 1983-89: 1.01 x .37 = .37 • 1991-99: 0.79 x .38 = .30 • 2000-02: 1.01 x .39 = .39

5. Pass Ratios from first sittings May ’00Nov ’00May ‘01Nov ’01May ‘02 Exam 1 23% 34% 33% 34% 43% Exam 2 27% 32% 32% 41% 37% Exams 1 & 2

6. Exam 3 Pass Ratios from first sittings May ‘00Nov ‘00May ’01Nov ’01May ‘02 Overall 32% 36% 43% 42% 42% CAS Workers 15% 20% 33% 34% 33% Non-CAS Workers 29% 31% 38% 36% 36% Students 44% 54% 60% 54% 57%

7. Exam 4 Pass Ratios from first sittings May ‘00Nov ‘00May ’01Nov ’01May ‘02 Overall 34% 37% 41% 43% 44% CAS Workers 23% 30% 35% 39% 35% Non-CAS Workers 29% 34% 40% 38% 39% Students 69% 59% 54% 56% 69%

8. Exam 3 and 4 - Update • Board concern that Exams 3 & 4 don’t adequately meet the needs of the CAS candidate • November 2001- Board created a Task Force charged with designing Exams 3 & 4 that are appropriate for casualty actuaries • September 2002 – Board accepted recommendations of Task Force regarding materials for 3 & 4 • Will discontinue joint sponsorship of Exam 3 in Nov. 2003. Life contingencies portion of the exam will return to old Part 4A levels • Topics for Exam 4 are appropriate and will continue to jointly sponsor with SoA

9. Exams - Education Consultant • Hired Education Consultant to help: • Construct appropriate learning objectives • Train to develop good thinking questions • Help with methods for setting pass score • Provide input on evaluating exam length and difficulty • CAS Policy: Pass marks reflect sufficient grasp of material. No predetermined pass mark.

10. Exams - Long Term • Discussions with SOA, FA/IA, IAAust • Convergence of syllabus desirable if consistent with our needs • Learn from one another • Wide interest in QRA (2005) • CAS involved in ongoing QRA discussion • Education Policy Committee - overall structure • Syllabus & learning objectives • Educating & testing method, always keeping in focus the education needed by casualty actuaries

11. Attracting New Talent • Exam 1-4 registrations up 28% (May 2001 May 2002) • Jobs-Rated Almanac: #2 • Technology job market has cooled • It’s all about job and career opportunities

12. Continuing Education Issues • What is the “right” mix of basic education and continuing education? • Should we increase the scope and magnitude of continuing education requirements? • What delivery mechanisms will work for CAS continuing education in the future?

13. Expanding Practice Areas • DFA • Concept Theoretical tool Practical application • Seminar expanded to “Risk and Capital Management” • Enterprise Risk Management – role of actuary going beyond issues of just “hazard risk” to investment and operational risk

14. International Issues • Historically, CAS predominantly North American • 95% of members live and practice in North America • Many papers and syllabus materials use U.S. examples • Major meetings and seminars • Board approved international strategy“To be pre-eminent global resource . . .” • Support of CAS Members working abroad • Support basic education process in various countries • Exam waivers and mutual recognition • Practice rights for CAS members (Ireland, Australia, India) • Increase information and involvement among NA members • Participation in international actuarial community

15. International Issues - Mutual Recognition • 1999 Board action • Not pursue bilateral agreement • Work to ensure practice rights globally • Subsequent developments • CAS members may be excluded from certain practices in Australia, Ireland, India • November 2001 - Board creates Task Force to revisit • September 2002 – Board considering Task Force report

16. International Issues - Next Steps • More specifics • Highly developed actuarial organizations (IA/FA) • Developing organizations • Emerging markets (China) • Prioritization • Countries • Activities • Resources • People • Cost

17. CAS Election Process • Reviewed by Task Forces – 2000 and 2002 • Nomination and Petition processes continue, but . . . • Petitioning now occurring before Nominating Committee • Nominating Committee completes the slate ( 1 + 8) • Always can name 1 PE, 4 Board candidates • Change in the required number of signatures • Nominating Committee membership • Now includes majority of “at large” members • Candidate information and Q&A • Goal in the near future – electronic voting

18. The CAS at 100 • LRPC is establishing Significant, Attainable and Measurable goals for the CAS at 100 (year 2014) • Started at the Leadership Meeting in March 2002 to get input on Core Purpose, Core Values and Big Audacious Goals for long term that will lead to shorter term action plans • Board discussed status of LRPC at Sept. 2002 meeting and is interested in soliciting wider input from members and future members

19. Core Purpose Examples “The core purpose is the reason for being” • To define and enhance the value of the casualty actuary • To educate the actuary of today and the future • To improve society’s understanding, acceptance, measurement and management of the risks inherent in life

20. Core Value Examples “The essential and enduring principles that guide the CAS” • Learning • Innovation • Community • Volunteerism • Professionalism

21. Big Audacious Goals Examples “A clear and compelling catalyst that serves as a focal point for effort” • Eighty percent of our members will volunteer in the Society • There will be 15,000 employed CAS members by 2014, with job descriptions ranging from CEO, CFO, CRO and FE • The CAS will provide credentialing for actuaries in 25 countries • The CAS will give exams in 15 languages

22. Roles of Regional Affiliates • Social and networking • Continuing education • Leverage existing resources • Exam seminars • University/college relations • Entre into CAS network • Meeting attendance • Involvement and leadership

23. Getting Involved in CAS • Why: • Learn • Make useful contacts • Contribute to your profession • How: • Pick committees/topic(s) that interest you most • Respond to Participation Survey or contact committee chair directly • Write papers • Give presentations • Regional Affiliate involvement

24. CAS Web Site • WWW.CASACT.ORG • Syllabus, study materials, past exams, study notes • All PCAS (1914), CAS Forums (1987) and Discussion paper programs (1979) • ASOPs, Casualty Reserve Practice Note • Discussion forum • Member Services: • Membership Directory • CAS Board Q&A • Board minutes

25. I would like your input regarding . . . • Continuing Education requirements • Board and President-Elect nomination process • Expansion beyond ratemaking and reserving • CAS role internationally • Mutual recognition • Exams • What’s on your mind? • Questions?