Continuing Education for Canadian Actuaries: A Progress Report

Continuing Education for Canadian Actuaries: A Progress Report

By Bill Osenton, FIA, FCIA

The Canadian Institute of Actuaries (CIA)–also known by its French name l'Institut canadien des actuaries (l'ICA), with the bilingual logo on the right–has improved continuing professional development (CPD) for its members by strengthening the requirements, improving tracking and providing additional resources.

In November 2004 the Board of Directors of the CIA approved a five–year strategic plan. The first of several objectives in that strategic plan is: "The actuarial profession will be recognized for its integrity, high standards of practice and quality of work." This had always been important but was felt to be particularly so today given events such as Enron in the United States and the failure of Equitable Life in the United Kingdom.

The CIA has had CPD requirements in place since 1994. In 2004, the Committee on Continuing Education began an initiative to review those existing requirements and, as a result, a revised Qualification Standard¹ was introduced effective Jan. 1, 2006. The new standard says that a member who fails to fulfill the CPD requirements outlined in the Qualification Standard, or to secure an exemption, is in contravention of Rule 2 of the CIA Rules of Professional Conduct. Similar to Precept 2 of the Actuarial Code of Conduct of the American Academy of Actuaries, the CIA's Rule 2 requires that "A member shall perform professional services only when the member is qualified to do so and meets applicable qualification standards." Exemptions can be granted to retired members, members who will not be returning to actuarial work or members who are actively writing exams.

In Canada, there is no government–sponsored qualification process similar to the enrolled actuary system. Where an actuarial qualification is prescribed by regulation, the requirement is always for a fellow of the Canadian Institute of Actuaries (FCIA). Maintenance of qualification standards, including CPD, is the responsibility of the CIA.

The revised Qualification Standard effective Jan. 1, 2006 did not increase the minimum number of hours of CPD (unchanged since CPD was introduced in 1994), but refined the breakdown of hours required, enhanced the recording and reporting requirements and extended the requirements to CIA members who are practicing outside of Canada. The overall requirement remains a minimum of 100 hours over a rolling two calendar year period. Within that minimum 100 hours, three skill categories are recognized, each with its own minimum hours requirement.

Technical Skills

Technical skills include actuarial, mathematical, modeling, legal and other similar skills that are core to the work of an actuary and specific to the member's role/practice area. Although many of these skills are acquired during the actuary's formal training (exams), they need to be kept up–to–date with the emerging developments in actuarial practice during an actuary's active career. At least 12 structured hours are required over each two–year period.

Professionalism

This refers to the professional and ethical standards the public and those who employ actuaries expect the actuary to be well versed in and display in carrying out his or her obligations irrespective of his or her practice area. Examples include Rules of Professional Conduct, changes to the CIA Bylaws, and related discussions on these issues. At least four hours, structured or unstructured, are required over each two–year period.

Business and Management Skills

These skills are not unique to the actuarial profession but improve personal effectiveness and an actuary's ability to succeed in a diverse business environment. At least four hours on business and management skills, structured or unstructured, are required over a two–year period.

As noted above, hours recognized are classified into structured and unstructured hours. Unstructured hours are self study hours or training sessions where there is no opportunity for debate over the material being presented. Structured hours are hours spent in training sessions or meetings where there is opportunity for discussion and challenge, i.e., where more than one point of view is presented. Structured hours can include review of records of proceedings or replay of meetings in which there was opportunity for challenge. Attendance at CIA–sponsored meetings is not a requirement to meet these hours.

Unlike the continuing education requirements for enrolled actuaries, there is no pre–approval process for qualifying sessions, and no records are kept and reported of attendance by the sponsoring organization. It is up to the individual actuary to assess whether content of a meeting is relevant to his or her own CPD and keep a record of hours by category and type.

The process is self assessing and self recording. Meetings and training sessions may not be relevant for all attendees. Hours qualify only if the actuary believes that the content is relevant to his or her own professional education.

Content must also be relevant to the member's area of practice. A member who practices in more than one practice area needs to meet the CPD requirements for each practice area with relevant material. This does not necessarily mean a doubling or tripling of the time requirement as some continuing education time may be relevant to more than one practice area.

What Do Actuaries Think of These Requirements?

The Qualification Standard was passed with a vote of membership at the CIA's November 2005 General Meeting, but there have been objections by some members on a number of scores:

• the number of hours required is too high compared to other actuarial associations
• the business and management skills requirement is unnecessary and inappropriate as these skills are not needed to perform actuarial work
• members working outside Canada should not need to meet these requirements
• the hours are excessive for both actuaries who work in more than one practice area, and actuaries who wish to take on occasional actuarial assignments
• the definition of practicing as an actuary is too loosely defined for some, too tightly defined for others

What Do I Think?

The total hours, while greater than the hours required in some other countries, including those proposed for the SOA, are not in my view excessive. Looking at the extensive and changing (increasing) required knowledge for all practice areas, I for one find it difficult to believe that one can keep one's skills relevant on as little as 50 hours per year.

Further, I find unconvincing the argument made that these requirements should be reduced or waived for retired members, members who wish to conduct occasional assignments and members who claim they do not need actuarial skill for their work. Surely these members need more CPD, not less, to compensate for their lack of ongoing work experience.

Finally these requirements apply to all members. A member who practices as an actuary, but does not do Canadian work, would be required to meet our CPD requirements regardless of his or her geographic location. Hours spent meeting CPD requirements from actuarial associations of other countries could count towards meeting the CIA's CPD requirements. Also relevant non–Canadian education would count. I believe this is fair. The passport to many actuarial jobs and much actuarial work in Canada is possession of an FCIA. If the qualification is of value to a member, and that member wishes to retain the right to return to Canada and work, then a requirement to remain current is not an unreasonable price for maintaining that right.

How is the CIA Helping its Members to Fulfill their CPD Requirements?

The CIA has made self recording easy by setting up a record for each member to which entries can be recorded through the CIA Web site. Alternative recording systems are permitted, provided the result is an annual report of the required information at the end of the CPD reporting period.

The CIA also has a task force working on a skills and knowledge inventory (SKI) for each of six practice areas. Each SKI will include a skills and knowledge grid describing competencies for various practitioner categories (broad job role) and a reference list including reading material to assist members in locating sources for continuing education material specific to their area(s) of practice. At time of writing this task force is still working on the SKIs but some information is already available on the CIA Web site.

Communication was a key focus. In addition to sessions related to CPD requirements held at CIA meetings, the CIA has established a separate section of its Web site with information on CPD, and has also been distributing guidance to members through the CIA Bulletin and special one–page bulletins called CPD Spotlight. Here are a few of the answers provided therein.

I'm an FCIA and work part–time. My part–time job involves valuation of a U.S. defined benefit pension plan; need I comply fully with the CIA's CPD requirements?

Yes! The Qualification Standard states that all members need to comply regardless if the actuarial work is Canadian or foreign. However, CPD activity that is done for that foreign country can count towards satisfying CIA's CPD requirements. Working part–time does not give exemption or reduction to CPD requirements.

Can I get a partial exemption if only part of my work is actuarial?

No! Partial exemptions are not allowed. For example, if you are working part–time you still need to meet the full requirements.

Why can't the Canadian Institute of Actuaries automatically grant me CPD hours when I register for a meeting?

The main reason for this is that the number of CPD hours a member earns will depend on the relevance to the member's area of practice.

Why do I need to record information describing the specifics of my CPD activity?

One of the objectives of CPD is to maintain the "integrity of the profession to meet the expectations of the public." So, if members do not disclose sufficient details about their CPD activity, this really does not fulfill that objective. The spirit and intent is that members are demonstrating compliance with CPD requirements by showing how CPD is being met.

I'm an FCIA working in New York. I calculate reserves for a product sold only in the United States. Do I need to comply with CPD?

Yes! It does not matter where you are working, or the type of product you are working on. The fact that you are a member of the CIA, and are practicing as an actuary, means that you must comply with CPD.

Can CIA committee work be automatically counted?

No! To count for CPD, there must be some educational component and it must be relevant to the member's area of practice. So committee work may not necessarily count.

Work done on committees such as the Committee on Life Insurance Financial Reporting would likely count but it may not be true of other committees.

¹The current Qualification Standard can be found on the Canadian Institute of Actuaries Web site at Actuaries.ca.

Bill Osenton, FIA, FCIA, is a resource actuary with Watson Wyatt Worldwide in Vancouver, B.C. He serves on the Canadian Institute of Actuaries Standards of Practice Editing Committee and is a pension representative on the CIA's Task Force to Develop Skills and Knowledge Inventories to Support Members' Continuing Professional Development.