Update on CAS Activities

1. Update on CAS Activities by Bob Conger Casualty Actuaries of Greater New York May 29, 2002

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

3. Exams - Travel Time • Travel time (approx. # sittings) ACAS FCAS • 1980-81 9 13 • 1989-90 11 15 • 1998-99 14 17 • 2000-01 15 18 • 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-: 1.01 x .38 = .38

5. Pass Ratios from first sittingsMay ‘00 Nov ‘00 May ‘01 Nov ‘01 Exam 1 23% 34% 33% 34% Exam 2 27% 32% 32% 41% Some possible causes Insufficient advance information Required mastery of more material Word problems First time exam Exams 1 & 2

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

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

8. more . . . Exam 3 and 4 Key Issues • Most learning objectives okay, but some go beyond what casualty actuaries need • Too much material some pruned • Need better material study notes commissioned • Students perform better than workers for various reasons

9. Exam 3 and 4 Key Issues (cont.) • CAS Policy: Pass marks reflect sufficient grasp of material. No predetermined pass mark. • CAS Policy: Achieving CAS learning objectives is more important than having joint exams • Task Force working on development of Exams 3 and 4 that meet CAS needs. Can be joint with SOA

10. Exams - Other Changes • 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

11. 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

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. 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

14. Expanding Practice Areas • DFA • Concept Theoretical tool Practical application • Seminar expanded to “Risk and Capital Management” • New Advisory Committees • Asset/Liability Management & Investment Policy • Enterprise Risk Management • Securitization/Risk Financing • Valuation of P/C Insurance Companies

15. 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

16. 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 • AAA mutual recognition not a likely solution in near future • November 2001 - Board creates Task Force to revisit

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

18. 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 • Will include majority of “at large” members

19. CAS Election Process (cont.) • Candidate information • “Why I want to serve” • Statement on issues • Runoff procedures

20. 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

21. 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

22. 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?