By Stuart Klugman
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). In the intervening time, the NAIC completed its review of the SOA’s GI Track. In particular, the NAIC reviewed our self-assessment regarding where we did and did not cover the 91 knowledge statements they had identified that must be learned through basic education. We then had two months of back and forth exchanges that led to an agreement about the gaps in our syllabus. With that agreement having been reached, the NAIC concluded that the SOA’s GI track is an NAIC Accepted Actuarial Designation, meeting NAIC standards of a qualified actuary to sign the NAIC Property & Casualty (P&C) Annual Statement of Actuarial Opinion, pending those agreed-upon updates to the curriculum. These changes have already been made and are in place for the SOA’s Fall 2019 exams. Formal recognition of this decision is expected to occur by June 30, 2019, when the NAIC adopts the 2019 Statement of Actuarial Opinion instructions.
You can read the formal announcement from the SOA here.
We have received inquires from both candidates and members since this announcement was published. The following are answers to some questions that have been asked (and some that haven’t).
Q: What is the nature of the changes that have been made to the curriculum?
A: All of the required changes are to the Ratemaking and Reserving Exam. The main text for that exam is Fundamentals of General Insurance Actuarial Analysis by Jacqueline Friedland. She has written a supplement to her text that addresses all but one of the items. This supplement can be downloaded from the syllabus document for the exam. Note that as a supplement, it is not a stand-alone document, but makes frequent references to the original text. In addition, ASOP 25 on credibility was added to the syllabus for this exam. The readings for the exam already covered the contents of this ASOP, but the NAIC asked that the document itself be part of the syllabus.
There is one additional change. In anticipating the NAIC’s response to our self-assessment, we added the topic of commercial auto insurance to the Introduction to General Insurance Exam starting in August. Although the NAIC ultimately decided that wasn’t necessary, we had already begun to implement the change and will make it.
Q: Has the NAIC approved the changes that have been made?
A: Not yet. But the NAIC has acknowledged our plans for how these required items will be added. They will be reviewing the content of our additions in late 2019 or early 2020. We have until the end of 2020 to implement any revisions they suggest.
Q: What are the implications of this assessment?
A: With our GI fellowship being recognized as an “Acceptable Actuarial Designation” those earning a general insurance FSA have met the NAIC’s basic education requirements for signing the NAIC’s P&C actuarial opinion. As has always been the case, signing actuaries must also meet experience and continuing education standards and be in compliance with applicable state actuarial opinion filing laws and regulations.
Q: What about other actuarial work?
A: This decision only affects the signing of NAIC P&C annual statements in the U.S. SOA GI fellows have always met the basic education requirements of the U.S. General Qualification Standards for issuing Statements of Actuarial Opinion with regard to actuarial services in the P&C area of practice.
Q: Are all FSAs from the GI track now approved by the NAIC?
A: There are two exceptions. First, the decision states that to be approved the FSA must be earned using the Financial and Regulatory Environment–U.S. exam (FREU) and the Advanced Topics in General Insurance exam (ADV). Candidates using alternatives (e.g., Canadian version of FRE or substituting the SOA ERM Exam for ADV) will not meet the NAIC’s basic education requirement. Their options would be to either take the missing exams or apply to the American Academy of Actuaries’ Casualty Practice Council (a process that is already in place). It is expected (but not yet confirmed by the NAIC) that fellows who received waiver credits for these exams by having passed CAS exams will be approved.
The second exception is for fellows who passed earlier versions of the SOA exams before the required changes were made. It is expected that the NAIC will be promulgating grandfathering rules for these fellows. The current draft rules indicate that the gaps may be made up by continuing education on the missing topics. As of this writing, the NAIC has not finalized the grandfathering rules.
Q: I do not practice in the U.S. Does this decision affect me?
A: No. Whatever practice rights you had as an SOA GI fellow are unchanged by this approval from the NAIC. It only applies to signing the NAIC P&C actuarial opinion.