1. Society of Actuaries Education Update March 12, 2013 Spring 2013 Actuarial Education Event Drake University March 12, 2013 Spring 2013 Actuarial Education Event Drake University Stuart Klugman, FSA, CERA SOA Staff Fellow, Education

2. 2 22 AGENDA  FSA Requirements – Effective July 1, 2013 Restructuring of all tracks  Preliminary Exams  General Insurance Track Curriculum

3. 3 33 FSA Requirements Effective July 1, 2013 FSA Requirements Effective July 1, 2013

4. 4 44 Fellowship Requirements (2013)  Exams Two five-hour exams One two-hour exam  Modules Three modules that are track-specific (though some modules are shared) Decision Making and Communication module  Fellowship Admissions Course

5. 5 5 FSA Designation (effective July 1, 2013)

6. 6 66 Fellowship Requirements  The following tracks have separate Canada and U.S. versions. Amount of difference depends on track. Individual Life and Annuities Retirement Benefits Group and Health (new in 2013) General Insurance  Other tracks are Corporate Finance and ERM Quantitative Finance and Investments

7. 7 77 Two Exceptions  U.S. Retirement Benefits The two Enrolled Actuaries Exams are required. Total of four, rather than three, exams  General Insurance Additional exam on policy coverages and business environment Need background that goes beyond introduction in FAP May be a pilot for other tracks

8. 8 88 CERA option for all tracks  On all tracks other than Corporate Finance and ERM candidates may replace the two- hour track-specific exam with the four-hour ERM exam  Candidates who do so and also complete the ERM module will receive a CERA in addition to their FSA  This is not a change in CERA requirements

9. 9 99 Preliminary Exams

10. 10 Joint Arrangement with CAS Ending  Effective December 31, 2013  Business as usual for SOA exams Same curriculum Same exam schedule Same CBT availability  Candidates should proceed normally  CAS will recognize the SOA exams

11. 11 Written-Answer Questions on MLC  Third time a charm?  Can ask questions more in line with desired learning outcomes.  Effective Spring 2014: 40% multiple choice; 60% written answer 4 hours (was 3 hours) Twice per year No change in source material Written answers not graded for all

12. 12 General Insurance Track

13. 13 Motivation  The SOA is currently the only major international organization that covers many, but not all, practice areas  SOA candidates benefit by being able to explore all areas of actuarial practice before selecting a specialty track.

14. 14 Objectives of GI Track  Be consistent with the other five SOA tracks Track consistency is already an SOA objective  Be attractive to candidates regardless of location Ensure that actuarial methodologies are represented in the syllabus on a broad international basis Nation specific material included for financial and regulatory environment topics  Be recognized as qualified to practice, including the signing of statutory reports, in the U.S. and Canada.

15. 15 General Insurance Curriculum

16. 16 General Insurance Track Financial and Regulatory Environment Exam (5 hours) Financial Economics Module Applications of Statistical Techniques Module Enterprise Risk Management Module (may be taken at any time) Advanced Topics in General Insurance Exam (2 hours) or Enterprise Risk Management Exam (4 hours) Introduction to Ratemaking and Reserving Exam (5 hours) Introduction to General Insurance Exam (2 hours)

17. 17 Introduction to General Insurance Exam  Coverages and business environment  Multiple-choice exam with expected higher pass rate  Supplements material in FAP

18. 18 Introduction to Ratemaking and Reserving Exam  Unified view of ratemaking and reserving  Global focus  SOA has commissioned a textbook  First offering in Fall 2013

19. 19 Financial and Regulatory Environment Exam  Will offer separate U.S. and Canadian versions  First offering in Spring 2014

20. 20 Financial Economics Module  Currently offered without General Insurance  Will add topics such as Valuing the equity of a firm Managing interest rate, cash flow, credit and investment risks

21. 21 Advanced Topics in General Insurance Exam  A two-hour exam  Topics being considered include Premium rates for excess, deductible and individual risk rating Reinsurance premium rates and reserves Strategies for achieving a portfolio rate of return Estimating risk transfer

22. 22 Advanced Module - Applications of Statistical Techniques  A new module to be introduced in 2013  An opportunity to provide a hands-on experience with case studies  Topics being considered include Generalized linear models with emphasis on classification ratemaking – including mixed models for adding credibility Cluster analysis Stochastic and Bayesian reserving methods Measuring reserve variability

23. 23 ERM Module  Same module used for other tracks  Requirement for CERA  Generic corporate risk management

24. 24 ERM Exam  May take instead of the two-hour Advanced Topics Exam  Includes a choice of reading extension with track-specific readings  General Insurance already one of the extensions

25. 25 Questions and Answers