December 2017

The GI Track and the NAIC Job Analysis Project

By Anthony Cappelletti

Five years ago, the SOA began the General Insurance (GI) Fellowship specialty track. A syllabus was created, textbooks written and volunteers were assembled. Fellowship exams and modules for the track were made available beginning in Fall 2013. The SOA included as a goal for this track that an FSA in the GI track would be approved to sign reserve opinions in the U.S. (and other countries as well). This would make it comparable to the SOA’s other specialty tracks.  In this article, I will highlight the path towards this goal culminating in an overview of the ongoing NAIC Job Analysis Project.

First, the background. Under the U.S. Qualification standards, SOA fellows from the GI track meet the general qualification standards, which gives them the ability to perform actuarial work. The specific qualification standards are required to be met in order to be able to sign the NAIC Property and Casualty Annual Statement (NAIC Statement). However, this standard was developed prior to the SOA’s offering of a GI track and, as such, does not currently list GI track FSAs among the options. This standard comprises the requirements for basic education, experience and continuing education. Of these requirements, experience and continuing education are the responsibility of the individual and not the credentialing body. The track’s curriculum was designed to meet the basic education requirements of the standards as they are currently defined.

The American Academy of Actuaries defined basic education requirements to include basic qualification standards (BQS) and specific qualification standards (SQS). The track clearly meets the BQS. The question was whether or not it meets the SQS. The Academy’s SQS for P&C consists of five broad topics that should be covered:

(a)   policy forms, coverages, underwriting, marketing;

(b)   ratemaking;

(c)    statutory accounting;

(d)   reserving; and

(e)   reinsurance.

Although the Academy’s SQS list of topics is quite broad, the SOA’s GI track was designed to cover all of the topics identified in detail. The following updates are needed for formal recognition of FSAs to sign NAIC Statements:

  • From the NAIC: Amend Actuarial Opinion 1A Definitions to include FSAs in the GI track;
  • From the Academy: Amend SQS Section to include the SOA.

The SOA provided information of its GI track to both the NAIC and the Academy. The Academy elected to wait for the NAIC’s evaluation. After considerable discussion, including review of an independent consultant’s recommendations, the NAIC (in the summer of this year) determined that one of its main charges going forward would be to conduct a Job Analysis Project. This project is to lay the foundation for the development of detailed educational standards to, “allow auditing of the actuarial education programs of credentialing organizations.”

The SOA fully supports the Job Analysis Project, which formally began in August. It is hoped that with more refined and specific education standards the SOA’s GI track can be evaluated objectively and provide a path forward for recognition.

The Job Analysis Project involves seven key elements as follows (as per the NAIC memorandum sent to the SOA, the CAS and the Academy on Aug. 11, 2017):

  1. Identify Critical Tasks and Knowledge Statements
  2. Develop Survey using Critical Tasks and Knowledge Statements
  3. Pilot Critical Tasks and Knowledge Statements
  4. Administer Survey
  5. Analyze Survey Data
  6. Determine Final Tasks and Knowledge Statements
  7. Review and Ensure There is an Evidenced-Based Definition of a Qualified Actuary to be an Appointed Actuary

In order to complete this project, the NAIC required subject matter experts (SMEs).  As a full participant in this project, the SOA, along with the CAS and Academy, were requested to nominate SMEs. The nominees submitted resumes and were interviewed by Kris Defrain, Director, Research and Actuarial at the NAIC. As one of the nominees, I was involved in this process. It reminded me of a job interview. It was a good experience for me and I welcomed the opportunity to discuss my skills and knowledge along with my passion for actuarial education. In the end, SMEs were selected to have representation from the NAIC and the three actuarial organizations. A subset of SMEs was selected to be on the Focus Group while the remainder were selected to be on the Pilot Group. The Focus Group consisted of thirteen actuaries; four as nominated by the NAIC, three from the SOA list of nominees, three from the CAS list of nominees, and three from the Academy’s list of nominees.

The SOA was pleased with the three members selected to the Focus Group from the SOA’s list of nominees. They all have considerable experience as signing actuaries for NAIC annual statements. Although I was not selected to be on the Focus Group, I wasn’t disappointed. This was expected as I have never actually signed an NAIC statement under U.S. statutory accounting. This is not to say I don’t have the requisite knowledge to be an SME. I have many years of works experience as a signing actuary for P&C insurance (although it’s in jurisdictions outside of the U.S.) and have extensive experience in general insurance financial reporting and the regulatory environment in the United States. I was selected to contribute as a Pilot Group member and I appreciate the opportunity this has provided me.

As of mid-October, the first four elements of the Job Analysis Project were completed. The Focus Group, along with the NAIC consultant, completed elements 1 and 2. This involved an intensive two day in-person meeting in Philadelphia. I participated in element 3 and could see that the Focus Group did a good job of identifying the critical tasks and knowledge statements for a P&C Appointed Actuary. For element 4, the survey was sent out electronically to all Appointed Actuaries of P&C insurance companies regulated in the U.S. under statutory accounting.

Responses were received and element 5 was completed before the end of October. In mid-November, I participated in element 6 as an SME. This involved a two-day in-person meeting in Chicago.  Using the results of the survey, the SMEs and the NAIC consultant put together a list of the tasks and knowledge statements that should be used by the NAIC to revise its definition of a qualified P&C actuary in element 7 of the Job Analysis Project.

I am amazed at the speed at which the Job Analysis Project moved along with every deadline in the original schedule met. I hope that this keeps moving with the same urgency because the Job Analysis Project and a new definition is not the end of the process. There will still be a need to identify elements that are expected to be attained through experience and continuing education versus basic education. After this is complete, there should be a more objective procedure in place to evaluate credentialing for signing P&C actuaries in the United States. I look forward to a time, hopefully in the near future, where an FSA in the GI track is recognized as qualified to sign for the NAIC statement. I remain optimistic and hope to write a follow-up article outlining the path forward for the SOA’s GI track.

I should point out that although an FSA in the GI track is not currently recognized by the NAIC and the Academy as qualified for signing the NAIC statement it does not mean that an individual FSA in the GI track cannot become qualified to sign. There is currently the option of applying to the Academy’s Casualty Practice Council (CPC).  As noted by the Academy: “A member of the Academy who is not a member of the CAS, but who believes that he or she satisfies the U.S. QS Specific Qualification Standard for signing the Statement of Actuarial Opinion on loss reserves for the NAIC Property and Casualty Annual Statement, may submit a Request for Review of Qualifications to the attention of the Casualty Policy Analyst of the Academy to obtain the Academy’s approval to sign the Statement of Actuarial Opinion on loss reserves for the NAIC Property and Casualty Annual Statement.” At the time of this writing, one FSA from the GI track elected to apply to the CPC and has been approved.

Anthony Cappelletti, FSA, FCIA, FCAS, is a staff fellow for the SOA. He can be contacted at