In the past several issues of this newsletter, I have reported to you on our progress toward recognition by the U.S. National Association of Insurance Commissioners (NAIC) for signing the NAIC P/C Statement of Actuarial Opinion (SAO). With the approval of our track as an Acceptable Designation, a few steps remain. The following is a progress report as of the time of this writing.
Changes to Meet the NAIC’s Knowledge Statements
As reported last time, all the requested changes were made for the Fall 2019 exam administration. We are waiting for the NAIC to evaluate them and decide if they do close the minor gaps identified. The NAIC also requested the CAS make changes to their program.
Final Approval by the NAIC
You will note that the first document is in tracked changes format. This does not imply the changes are pending. The NAIC has used this format to make it clear what has changed since the previous version was adopted.
Final Definition of an Accepted Actuarial Designation with Regard to SOA Fellows
The above-referenced document states one option is
Fellow of the SOA (FSA) – Conditions: basic education must include completion of the general insurance track, including the following optional exams: the United States’ version of the Financial and Regulatory Environment Exam and the Advanced Topics in General Insurance Exam.
The document contains two additional requirements. One is to meet the requirements of the specific qualification standards of the U.S. Qualification Standards. This includes basic education, experience, and continuing education. The current standard does not list the FSA as a means of meeting the basic education requirement. We are requesting that the American Academy of Actuaries make this change to align the standards with the NAIC’s decision to accept the FSA.
A second requirement is that the actuary be a member of an association that requires its members to adhere to the Code of Professional Conduct. The SOA is one such association.
Alternative Way to Qualify
The NAIC will continue to recognize an alternative pathway that has been available for many years. That is to be evaluated by the Academy’s Casualty Practice Council to be deemed to be a Qualified Actuary for particular lines of business and business activities. More information on the application process can be found here.
Grandfathering and Substitutions
The NAIC is aware that fellows may have used exams of other societies or prior versions of existing exams to earn their fellowship. For the SOA they note that if a fellow received FREU credit by passing CAS exam 6(US) or ADV credit by passing CAS Exam 7, they will meet the requirements.
In addition, the instructions note that any SOA exams completed in 2019 or earlier may not cover every topic that will appear starting in 2020. Any gaps should be closed by continuing education and experience. As an example, those earning fellowship by passing the Ratemaking and Reserving Exam prior to Fall 2019 should consider reading the textbook supplement prepared for that exam.
What I outlined here is specific to the requirements for signing the U.S. NAIC P/C SAO not to SAOs in general. In the course of actuarial work, most opinions or communications provided by an actuary regarding actuarial matters are considered SAOs by the Academy. Appendix 1 of the Academy’s U.S. Qualification Standards provides guidelines on what constitutes an SAO.
Signing the NAIC P/C SAO is one type of SAO and it requires meeting the basic education requirements of the NAIC and meeting the Academy’s specific and general qualification standards. All other general insurance (i.e., property and casualty) SAOs in the U.S. are only subject to the Academy’s general qualification standard. The SOA’s General Insurance track has always met the general qualification standard.
As noted previously, we are requesting that the Academy change the specific qualification standard to align with the NAIC’s decision to accept the FSA from the General Insurance track.
Stuart Klugman, FSA, CERA, is senior staff fellow, Education at the Society of Actuaries. He can be reached at email@example.com.