The Actuary Vol. 34, No. 1 3rd Annuity Conference Coming In March

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<!-- InstanceBeginEditable name="Header" --> <h2 class="textPageSubheadResearch"> News &amp; Publications: </h2> <!-- InstanceEndEditable --> <table width="600" border="0" cellpadding="0" cellspacing="0"> <tr> <td> <!-- InstanceBeginEditable name="Table" --> <p align="center" class="bodyText"><img border="0" src="/files/files/images/actsup.jpg" width="540" height="252" /></p> <p align="center" class="bodyText"><font size="6">President-elect candidates share their views</font></p> <div align="center"> <center> <table border="0" width="82%"> <tr> <td width="33%"> <div align="center"> <center> <table border="0" width="68%"> <tr> <td width="100%" align="center" class="bodyText"><img border="1" src="/images/DonnaClaire.jpg" align="center" width="126" height="148" /><br /> <i><font size="2">Donna R. Claire</font></i></td> </tr> </table> </center> </div> </td> <td width="33%"> <div align="center"> <center> <table border="0" width="66%"> <tr> <td width="100%"> <p align="center" class="bodyText"><img border="1" src="/files/files/images/BurtonJay.jpg" width="126" height="153" /><br /> <font size="2"><i>Burton D. Jay</i></font></p></td> </tr> </table> </center> </div> </td> <td width="34%"> <div align="center"> <center> <table border="0" width="65%"> <tr> <td width="100%"> <p align="center" class="bodyText"><font size="6"><img border="1" src="/files/images/WJamesMacGinnitie.jpg" width="126" height="152" /><br /> </font><font size="2"><i>W. James MacGinnitie</i></font></p></td> </tr> </table> </center> </div> </td> </tr> </table> </center></div> <p> <span class="bodyText"> <blockquote> </span></p> <table border="0" width="92%"> <tr> <td width="100%"><span class="bodyText">The SOA Committee on Elections and the June 2000 issue's editor, Godfrey Perrott, invited candidates for the office of president-elect of the Society of Actuaries to be interviewed by <i> The Actuary</i>. This annual service of <i> The Actuary</i> is intended to help Fellows make more informed choices in voting for a future SOA president. </span> <p class="bodyText">The interviews in these pages offer insights that supplement the candidates' formal position statements, which will be published in election materials. Soon after being notified that they were on the second ballot, the candidates individually arranged telephone interviews with the SOA communications staff. Each interview was tape-recorded. The same 10 questions were asked of each candidate in the same order. Candidates did not receive the questions ahead of time. The interviewer was allowed only to repeat the questions, not to expand on or discuss them. Of course, candidates could decline to comment.</p> <p class="bodyText">Each transcript, minus the candidate's name, was sent to Perrott, who reviewed the responses for repetition. <i> The Actuary</i> staff was allowed to edit only for grammar and conciseness. Each candidate received a copy of his or her transcript before publication, but candidates were not allowed to change their answers unless they believed they had been misquoted. Their answers are published in their entirety.</p> <p class="bodyText"><i>The Actuary</i> thanks all the candidates&#151;Donna R. Claire, Burton D. Jay, and W. James MacGinnitie&#151;for their cooperation. <br /> <br /> </p><hr align="left" width="60%" size="4" noshade="noshade" /> <p class="bodyText"><b> Question 1: Why did you become an actuary?</b><br /> <br /> <b> Answers:</b><br /> <br /> <b> Donna Claire: </b> I've always been good in math. In high school, I had a scholarship to Massachusetts Institute of Technology to study nuclear engineering. I wasn't absolutely sure I wanted to get into that field. I was a little afraid I would accidentally blow something up. My guidance counselor suggested a profession that I could try out: going to the College of Insurance on a work/study program of working for four months; going to school for four months. It also was in New York City so it had the added advantage that I could go home on weekends to see my dog. That was an important consideration. But actually, I thought trying out the profession was a great idea. It allowed me to pay for my school, and I absolutely loved the work. I've never looked back. </p><p class="bodyText"><b>Burt Jay: </b> I chose the college I attended because I wanted to be an engineer, and it had a fine program that was coupled with MIT. After getting into engineering, physics, and math, I found that I enjoyed the math part more than the engineering parts; I particularly had trouble drawing straight lines. My father was the marketing officer with an insurance company and suggested that I visit the chief actuary there. I did, and I tried a couple of the actuarial exams the following summer. Having gotten low scores on both of them, they captured my respect. And I worked a little harder and gradually became interested in pursuing that profession as the best one for me. It helped to have a couple of summers working as an actuarial student while I was in college. </p><p class="bodyText"><b>W. James MacGinnitie:</b> The actuaries I had met seemed to enjoy their work, and it was a great opportunity for someone with a math and science background to pursue a career in business.<br /> <br /> </p><hr align="left" width="60%" size="4" noshade="noshade" /> <p class="bodyText"><b> Question 2: Why do you want to be president of the SOA?</b> </p><p class="bodyText"><b>Answers:</b><br /> <br /> <b> Donna Claire:</b> I'm very proud of being an actuary. I've enjoyed the work that I've done. I've participated in just about every aspect of the SOA activities from exam committees to researcher to being a speaker at a number of seminars. I've seen what's good about the SOA and some areas that might need improvement. </p><p class="bodyText"> Basically, the major roles of the president are to listen to the members, develop goals for the profession, and set direction for change. I think I could provide the leadership to make these things happen. The president or chair of a committee doesn't do the work by himself or herself. They've got to listen to the members and get people on board. I think I can do that. I think also it's important that the president represent the actuarial profession with current and future employers and with related professions. </p><p> <span class="bodyText"><b> Burt Jay:</b> I have been an actuary for almost 40 years, and the profession has been very kind and important to me. I've been involved in professional and industry projects along the way. I have maybe the unique position of being the only one who had three years as vice president of the SOA instead of two, due to filling an unexpired term and then getting elected and serving the other two. Before I retire, I would like to have the ultimate experience of contributing something back to the profession by being president of the SOA. </span></p><p class="bodyText"><b>W. James MacGinnitie: </b> To provide the leadership to keep the actuarial profession moving forward, reinventing and reinvigorating itself in a challenging and rapidly changing environment. Also, to the best of my abilities, I want to return something to the profession for all that I've received from it.<br /> <br /> </p><hr align="left" width="60%" size="4" noshade="noshade" /> <p> <span class="bodyText"><b> Question 3: Why are you qualified to be president-elect of the SOA?</b><br /> <br /> <b> Answers:</b><br /> <br /> <b> Donna Claire:</b> I've participated in just about every activity at the SOA. Major areas are the basic exam system, where I started as a question writer and ended by chairing the last Part 10 exam offered. I've also chaired a number of research projects. One example is a paper I did with Allan Brender on dynamic financial analysis. At the SOA, I've also participated in setting up meetings and was the SOA treasurer and secretary. </span></p><p class="bodyText"> In those roles, I attempted to improve communications and attempted to get the budget in line with expenses. With the American Academy of Actuaries, I've served as a chair, and I think we got a lot of good things done. One was getting the valuation actuary concept through. While it's not perfect, I think through N.Y. Regulation 126, we got actuaries involved in assessing risk for companies. Actuaries need to be looked at as consummate risk professionals. By providing leadership through the SOA presidency, I think I could continue that leadership and be qualified to lead the profession into the 21st century. </p><p> <span class="bodyText"><b>Burt Jay:</b> I have many years of experience with the SOA and the American Academy of Actuaries and have had the opportunity to see the inner working relationships of all of the actuarial organizations in the United States and Canada. I think that as we face some of the challenges, strong leadership and the ability to persuade and interest our constituents are going to be very important. I have a good understanding of some of those situations and new futures we'll be entering. I want to help move us in the right direction to come out on top. </span></p><p class="bodyText"><b> W. James MacGinnitie:</b> I've been honored to serve in leadership positions in the insurance industry and major consulting firms. I've been president of the Casualty Actuarial Society and the American Academy of Actuaries and vice president of the International Actuarial Association and the SOA. I've also worked internationally and as a university professor. That experience provides me with a good understanding of the challenges that the profession faces. </p><p class="bodyText"> One reason I've been chosen for those positions is that my leadership style is inclusive and encouraging. I believe in working to find good people for the jobs to be done, encouraging and supporting them, and ensuring that they receive the reward and recognition they deserve. I'm tolerant of diversity and recognize there's more than one way to get things done. The volunteers on whom the SOA depends have competing demands on their time, but my experience is that they respond well to that kind of leadership.<br /> <br /> </p><hr align="left" width="60%" size="4" noshade="noshade" /> <p class="bodyText"><b> Question 4: What, to this point, has been your most important contribution to the profession? <br /> </b> <br /> <b> Answers:</b><br /> <br /> <b> Donna Claire: </b> Again, I don't look at it as me contributing by myself. Just about everything I've done has been while chairing or as a member of a committee. Some of the things I think I had a major impact on would be N.Y. Regulation 126 and U.S. Life Practice Notes. For the Practice Notes, I chaired a committee that had numerous people's contributions. That committee tried to make actuaries' lives easier by relating to them what current practices are. </p><p class="bodyText"><b>Burt Jay:</b> I would have said serving as vice president of both the Academy and SOA, but recently, I got involved in a project that may be an example of the types of challenges that may be coming to the actuarial profession. I've had the opportunity to lead a task force to draft a response to the International Accounting Standards Board, as well as the Federal Accounting Standards Board, on issue statements and proposals for fair value accounting for the liabilities of life insurance companies. This is a brand new thought, a brand new field for most of us. It looks like there is enough momentum going in a global sense that we will be stating reserves of insurance contracts on a fair value basis. Being in at an early stage and being able to make sure that actuaries have an important role in something that we're more expert at than any other profession has been a privilege and a really rewarding opportunity so far. </p><p class="bodyText"><b> W. James MacGinnitie: </b> Providing leadership in improving coordination between the various actuarial bodies, both in North America with the development of the Council of Presidents, and internationally with the transformation of the International Actuarial Association. <br /> <br /> </p><hr align="left" width="60%" size="4" noshade="noshade" /> <p class="bodyText"><b> Question 5: In your interaction with SOA members, what issues do members say are most important to them? </b><br /> <br /> <b> Answers:</b><br /> <br /> <b> Donna Claire: </b> The thing that's getting the most attention is the so-called &quot;Big Tent&quot;&#151;what is the future direction of the SOA? And, legitimately, it should get the most attention from the SOA. We have to evolve with the changes to our environment. The financial services industry has gone through major evolution, or revolution, depending on your point of view. Banks, mutual funds, investment banks&#151;all are getting into work that was traditionally the insurance companies'. We have to change with the environment. That's one area where communication with members as to what they think is the best change and what all the possibilities might be is going to be very important. <br /> <br /> <b> Burt Jay:</b> I talk to a lot of people who have just completed their Fellowships or are still in the process. I think the exam structure and the whole educational structure is of intense interest. Just this morning, I read the white paper on education in the future involving greater relationships with academics [&quot;<i>A Partnership Between the Academic Community and the Actuarial Profession&quot; by the Joint CAS, CIA, SOA, Task Force on Academic Relations</i>]. This will engender more debate than just about anything else. On the technical side, fair value of liabilities for actuaries who are involved in that will be debated a lot. It's an area of great interest but so far, it doesn't impact as many actuaries as education. </p><p class="bodyText"><b> W. James MacGinnitie:</b> Maintaining the value of the profession in a rapidly changing environment where globalization, the convergence of financial services, changes in retirement needs, and the growth of related professions are all occurring at a quickening pace. They also say that we need the basic and continuing education and research that keeps our value and relevance at historically high levels.<br /> <br /> </p><hr align="left" width="60%" size="4" noshade="noshade" /> <p class="bodyText"><b> Question 6: If you are elected, what one issue or task would receive your greatest attention? </b><br /> <br /> <b> Answers:</b><br /> <br /> <b> Donna Claire: </b> I would say it will be the future of the profession, some variation on the &quot;Big Tent.&quot; As a subset of that, I would say the communication with members. As I'm sure other actuaries do, I have my own ideas as to where the profession can go in the future. I don't want to throw out the good with the bad as we're trying to make decisions on change. </p><p class="bodyText"><b>Burt Jay:</b> The more that I can do to help us expand our horizons&#151;at least in the areas of practice of financial institutions&#151;I would like to do. And that's internationally speaking as well as in North America. I think things are happening even faster than our SOA task force of the early 1990s predicted with regard to more globalization of our industries and consolidation of financial institutions. There are going to be great opportunities for actuaries in the vacuums out there. </p><p class="bodyText"> There will be a need for financial experts who have a grasp of all products that financial institutions are marketing and have the risk management skills that are the core foundation for actuaries. Making sure that we get there first would be my primary objective. </p><p class="bodyText"><b> W. James MacGinnitie:</b> Continuing to advance the &quot;Big Tent&quot; agenda. This is a multiple-year process, and it will necessarily evolve as we attain member input, get acquainted with other professions, learn from other bodies, and study the changing environment. Our members will be particularly interested in maintaining the high standard for admission to our profession that we have always had. Members of related professions will want to know what's in it for them. I expect that this will occupy a great deal of time and energy. Continuity among our leaders will be very important.<br /> <br /> </p><hr align="left" width="60%" size="4" noshade="noshade" /> <p class="bodyText"><b> Question 7: The SOA has started to explore the feasibility of using university-based education for part of actuarial qualification. What resources do you believe will need to be in place to make this feasible (if you believe it is an approach worth investigating)?</b><br /> <br /> <b> Answers:</b><br /> <br /> <b> Donna Claire: </b> I think it's an approach worth investigating. Again, this is one area where several years ago the membership was surveyed, and there was not overwhelming support for this idea. I think it's an idea that we have to try again. I would survey the members again and find out what they think. The problem is, right now, the top students we want to attract to the profession are getting numerous opportunities, such as going into companies. That makes it very hard to attract them when they're looking at a series of intense exams. However, having said that, I recognize that we would have to make sure that colleges or university courses provide the basic background that we need. It is a system that the British Institute has worked with very successfully. But in the United States, we have a different situation&#151;the large number of schools for example. We have to make sure that students getting the credit deserve it. The most important thing is to make sure that our members think this is the way we should be going. </p><p class="bodyText"><b> Burt Jay: </b> I definitely believe it's an approach worth investigating. It will create as much debate as any issue I can think of. All of us have gone through a rigorous exam experience, and many of us would feel threatened if actuaries can achieve that status in a way that's not at least as rigorous. </p><p class="bodyText"> The new working relationship may be a gradual shifting of the education of actuaries over a period of time to the universities. I think it can be done in a way that doesn't diminish the skill level of an actuary coming out with the final designation. None of us would want that, but one has to face it. </p><p class="bodyText">Every other major profession in the world is primarily educated on a university basis. For example, lawyers and doctors have comprehensive exams in addition to their academic training. This may be long-term, as the size and the scope of actuarial science evolves. It may be absolutely necessary for us to get to the same point and have the resources required to tap into many technologies, have the facility to do research, and develop new technologies to meet new challenges that come up. </p><p class="bodyText">I can see this already in the fair value task force. For research, we need to tap the talents and energies of university people to help us develop techniques necessary to do the calculations to determine fair value of liabilities. </p><p class="bodyText"> The resources that will be required depend on the speed with which we move into this kind of educational system. If we help to fund programs at many universities, the financial, human, and the volunteer resources needed would probably be vast. If we start more slowly, the initial demand on our resources may not be so great. We will have a chance to evolve the process and learn by mistakes and successes. </p><p class="bodyText"><b> W. James MacGinnitie:</b> I firmly believe that a stronger academic base is required for our future development and success. One way of strengthening that base is to migrate more of the basic education into the university setting. Additional resources would be required, particularly in the form of well-qualified university faculty, because we have not historically educated in this manner. The Radcliffe white paper [&quot;<i>A Partnership Between the Academic Community and the Actuarial Profession&quot; by the Joint CAS, CIA, SOA, Task Force on Academic Relations</i>] is an excellent start. It notes that the profession will want to maintain control of, and ultimate responsibility for, standards of membership. That will require additional resources. Actuarial bodies in other parts of the world have had good results migrating to more university education, and we can learn from them.<br /> <br /> </p><hr align="left" width="60%" size="4" noshade="noshade" /> <p class="bodyText"><b> Question 8: The doomsayers of our profession predict problems for actuaries in the future as other professions encroach on work that has traditionally been our turf. How real do you perceive this threat to be, and what should the SOA do about it?</b><br /> <br /> <b> Answers:</b><br /> <br /> <b> Donna Claire: </b> I've been in this profession for 25 years. It seems like every other year we have doomsayers, or we have people saying this is a great profession to get into. I've thought all along, it's a great profession to get into.&nbsp; </p><p class="bodyText">However, legitimately, if we don't make some changes we won't have the same positions because the companies are evolving, and some of the things done by actuaries in the past are being done by computers right now. Yes, there is some possibility that the profession won't survive if we don't make changes. But the SOA has shown a resiliency and a willingness to make changes when needed. I think it will be important to strengthen the relationship of the SOA with potential employers in related professions such as CFAs, the health profession, employee benefits. Offhand, I still think it's a great profession to enter. I just think we have to not rest on our laurels but continue to move forward. </p><p class="bodyText"><b> Burt Jay:</b> There are going to be some vacuums out there. I don't think any group of people out there view actuaries as the enemy. Some groups that are working in areas we might move into are hardly aware of actuaries. As we need people with a multitude of skills that relate to a greater variety of products of financial institutions, I think that there will be opportunities. Whoever gets there with the right skills first is going to end up with the larger, more global jobs. We need to seize the opportunities and begin to identify the skills and technologies that we need and get started with the training required to do that. I don't see it as a threat; I see it as an opportunity&#151;maybe the biggest opportunity I've seen in my whole career. </p><p class="bodyText"><b>W. James MacGinnitie:</b> The threat is significant but long-term. Other professionals have harnessed developments in quantitative methods and computing power to provide valuable services in a much wider range of businesses than our traditional insurance and benefits areas. Also, initial results of financial services convergence suggest that insurers are more likely to be acquired than become acquirers. Addressing this threat requires broadening our own research and continuing education, developing a better university base, and reaching out to develop better working relationships with these related professions. </p><p class="bodyText"> A related threat is that regulators and rule makers, such as the Financial Accounting Standards Board, have worked to restrain the professional judgment of which the actuarial profession has been so justifiably proud. Avoiding constraint on our professional judgment requires outreach to educate regulators and policymakers and strong standards setting and discipline processes that demonstrate we can be trusted with responsibility for that professional judgment.<br /> <br /> </p><hr align="left" width="60%" size="4" noshade="noshade" /> <p class="bodyText"><b> Question 9: What would you do to strengthen or otherwise change the Society's working relationship with other important actuarial bodies, such as the American Academy of Actuaries, the Casualty Actuarial Society, and The Actuarial Foundation?</b> </p><p class="bodyText"><b> Answers:</b> </p><p class="bodyText"><b> Donna Claire: </b> I think we do have good relations with bodies like the CAS, Academy and also the CIA right now. I think we should look for joint projects and joint meetings where feasible. Our profession is too small to organize into small pockets that fight with each other. The profession is a source of potential funds for projects that we get a lot of outside attention for. We get a lot of good public relations with what the Foundation is doing. Their projects don't have to be SOA-related; they could be CAS, CIA or AAA-related. </p><p class="bodyText"><b>Burt Jay: </b> I've been involved with many other actuarial organizations in North America, and I've been aware of turf battles that have occurred between the different organizations. I've tried to explain the difference between the organizations to the public. We've had working relationships and covenants in the past, and I think things have gotten better. Many of the same people are members of multiple organizations. It would be better if we could find a way to consolidate at least the American organizations under a single, new umbrella structure of some kind. I don't know how this might be done. But any effort we can make to work together more closely and try to understand the unique problems the practice areas have would be good. The life and casualty actuaries see things differently because they experience real differences in the problems that they solve. Working on the fair value task force, which is comprised of about half life and half casualty actuaries, I've seen that, and I've learned many things. The more opportunities we have to work together on the same projects, the more we understand each other. Some of the defenses get broken down as new, stronger relationships are developed. Whatever I can do to make that come about, I will do. If there's a chance to have a common structure, I would welcome that. As we move into closer working relationships with other actuarial organizations of the world under the International Actuarial Association, the more American actuaries can speak with one voice, the more chance that we will be heard. </p><p class="bodyText"><b> W. James MacGinnitie: </b> As a former leader of several of these organizations, I would expect to have good working relationships and credibility in dealing with them. My concern is that we expect our leaders to spend too much time coordinating with other actuaries and not enough reaching out to other professions, regulators, policymakers and centers of influence in areas beyond our traditional insurance and benefits work. If elected, I would expect to push hard to improve that balance.<br /> <br /> </p><hr align="left" width="60%" size="4" noshade="noshade" /> <p class="bodyText"><b> Question 10: Is there anything else you would like to add?</b><br /> <b> <br /> Answers: </b><br /> <br /> <b> Donna Claire: </b> I've been working in the profession for over 25 years. I've had experience working in insurance companies, and for the last nine years, I've run my own business. In this business, I work with life and health companies of all sizes. I've seen the broad scope of the work the actuary does, and I've seen a broad scope of potential problems and opportunities for the future of the profession. I've worked successfully with various SOA committees and have been able to provide leadership in those areas. For example, right now, I'm working on a liquidity risk task force. It will help regulators understand how actuaries can assist in liquidity risk management. I believe I have the experience, enthusiasm, and energy to lead the SOA, and I would appreciate your support in voting for me.<br /> <br /> <b> Burt Jay:</b> I was a candidate for president a year ago and enjoyed going through the campaign process very much. Within the last year, working with actuarial bodies including international ones on the fair value project has given me an even greater understanding of the changes and opportunities coming about in new areas of technology. We must develop and implement these technologies as part of our practices in the short- and long-term future. So, I feel that I'm more qualified now even than I would have been a year ago and would welcome the chance to serve in the capacity of SOA president. </p><p class="bodyText"><b> W. James MacGinnitie: </b> The Society of Actuaries is a strong, vibrant organization with a dedicated membership that gives generously of its time, intellectual capital, and energy. But our traditional world is changing, and we need to reinvent and reinvigorate ourselves. I see this as a gradual process where we need to adjust some of the dials more than we need to throw switches. I look forward to the opportunity and honor of providing continuity and leadership in that process. </p><p class="bodyText"><a href="/home.aspx">SOA Homepage</a> </p></td> </tr></table><!-- InstanceEndEditable --> </td> </tr> </table>