Edition

FSA Changes for 2025

By Stuart Klugman

General Insurance Insights, June 2024

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Last year the SOA announced sweeping changes to the pathway from ASA to FSA. Significant details were announced on May 14, including identifying the 23 courses to be offered starting fall 2025. This article summarizes that information, providing details relevant for GI actuaries pursuing fellowship. Full details are available at the dedicated webpage: fsa2025.soa.org.

The new pathway requires that candidates complete four courses, two of which must be a specified sequence in their practice areas. For GI, the two-course sequence is:

GI 101 – Ratemaking and Reserving

Covers key concepts underlying ratemaking and reserving for general insurance. Topics will include introductory GI concepts, insurance company functions (e.g., underwriting and claim), coverages, data considerations and preparation, fundamental ratemaking techniques, fundamental reserving methods, and projecting and selecting ultimate values.

  • The candidate will understand key considerations and concepts underlying general insurance actuarial work.
  • The candidate will demonstrate the ability to prepare claims and exposure data for general insurance actuarial work. 
  • The candidate will know how to calculate and evaluate projected ultimate values.
  • The candidate will understand financial reporting of claim liabilities.
  • The candidate will understand trending procedures as applied to ultimate claims, exposures and premiums.
  • The candidate will understand how to apply the fundamental ratemaking techniques of general insurance.
  • The candidate will be able to define an approach for actuarial analyses supporting financial reporting and ratemaking analyses under various real-life scenarios.

GI 201 – Financial, Regulatory, and Legal

Covers the financial reporting, regulatory and legal environments for general insurance companies.  Topics will include financial reporting, analysis of a general insurer’s financial health, professional standards of practice, regulatory issues, and the legal environment.

  • The candidate will understand the structure and functions of a general insurance company.
  • The candidate will understand the different types of general insurance products offered.
  • The candidate will understand the reasons for, and the types of, general insurance regulation.
  • The candidate will understand tort law and insurance law with respect to its effect on general insurance.
  • The candidate will understand the elements of financial reporting for general insurance companies.
  • The candidate will understand elements of financial economics relevant to general insurance.
  • The candidate will understand the analysis of a general insurer’s financial health.
  • The candidate will demonstrate knowledge of ORSA.
  • The candidate will understand standards of practice and professionalism required of the actuary.

While GI 201 contains some U.S. related material, the bulk of the material will not relate to any specific jurisdiction. This will allow international candidates to complete the required two-course sequence without learning U.S. material that is likely not relevant to them.

Candidates are then free to select their other two courses from all those available. There are two courses with specific GI content:

GI 301 – Further Topics in General Insurance

Covers further GI analysis topics such as additional techniques for reserving (e.g., LDF curve fitting), reserve variability, risk margins, specialized ratemaking topics and reinsurance.

  • The candidate will be able to use stochastic loss development models to estimate reserve variability.
  • The candidate will understand and apply the considerations in the development of losses for excess limits and layers.
  • The candidate will be able to estimate premium liabilities.
  • The candidate will understand the considerations in selecting a risk margin for unpaid claims.
  • The candidate will be able to apply methods to monitor actual versus expected experience.
  • The candidate will understand excess of loss coverages and retrospective rating.
  • The candidate will understand reinsurance topics including the issues encountered when performing a reserve analysis on reinsurance, how to apply the fundamental techniques of reinsurance pricing and risk transfer testing of reinsurance contracts.
  • The candidate will understand and be able to apply ratemaking techniques for the following situations: Classification ratemaking, deductible options, increased limit options, claims-made polices and individual risk rating.
  • The candidate will understand catastrophe modeling and how its output may be used in actuarial tasks.

GI 302 – General Insurance in the United States

Covers U.S. focused GI topics such as structure and function of general insurers in the United States, general insurance products in the United States, regulation of general insurers in the United States, financial reporting for U.S. general insurers, NAIC IRIS, NAIC RBC, the U.S. P/C Statement of Actuarial Opinion (SAO) and the professional responsibilities of the actuary signing the SAO and the Actuarial Report.

  • The candidate will understand the personal lines insurance products offered in the United States.
  • The candidate will understand the commercial general insurance products offered in the United States.
  • The candidate will understand the structure of insurance regulation and its development in the United States.
  • The candidate will understand the different financial reporting standards for U.S. general insurance companies and be able to use the statutory financial statement to measure the financial health of an insurer (e.g., NAIC RBC and IRIS ratios).
  • The candidate will understand the requirements for signing the U.S. P&C Statement of Actuarial Opinion (SAO).
  • The candidate will be able to describe and apply the concept of materiality with respect to the U.S. P&C SAO.
  • The candidate will be able to apply the standards of practice regarding the responsibilities of the signing actuary as defined by regulators and the American Academy of Actuaries.

While GI 301 may have value to all GI candidates, GI 302 is devoted to the U.S. topics from GI FREU that have not appeared elsewhere.

Transition Rules

The exam transition rules for GI candidates are a bit more complex than for other practice areas due to the extra required exam (GI INT).

  • GI RR -> GI 101
  • GI FREU -> GI 201
  • CAS 6C -> GI 201
  • GI ADV -> GI 301
  • GI INT but neither GI FREU nor GI 6C -> credit for one GI module (see module transition rules)
  • GI INT and FREU -> GI 302 (in addition to GI 201)
  • GI INT and CAS 6C -> credit for one new course (in addition to GI 201)

For modules, candidates completing all three non-DMAC modules in the track (Enterprise Risk Management; General Insurance Applications; and Financial Economics, Regulation, and Law) will receive credit for one new course, other than one of the two sequence courses (GI 101 and GI 201). To earn transition credit, end of module assessments must be submitted by Dec. 31, 2025. If three modules are not completed by that time, credits will be lost. As noted above, passing INT but not FREU nor 6C can substitute for one of the three modules.

There is one path by which a candidate can meet the new requirements without completing all the current requirements. A candidate who has passed GI RR, GI FREU, GI INT, and all three modules will earn transition credit for GI 101, GI 201, GI 302, and one additional course. This completes the requirement of four courses, without having passed GI ADV. It is important to note that a candidate who does this and passes DMAC will not become eligible to attend the Fellowship Admissions Course until July 2025. That is because the transitions do not take effect until then.

International Candidates

In the new pathway, GI 101 and 201 will be required, while GI 301 and GI 302 are optional. International candidates may find value in GI 301, but the U.S. nature of GI 302 may make other courses more attractive. Possibilities include:

  • CFE 101 – Enterprise Risk Management (along with the ERM module, which will continue to be offered, this candidate can earn a CERA credential as well);
  • CFE 201 – Corporate Finance;
  • CP 312 – Model Development and Governance; and
  • another 101 course to learn about a different practice area.

U.S. Candidates

U.S. Candidates have the same options described above, but for them the GI 302 exam will be relevant as it applies to local practice. Requirements for meeting the U.S. Specific Qualification Standard for signing the NAIC’s statement blank will at a minimum include the four GI courses.

Canadian Candidates

The SOA will continue to offer Canadian education via accepting CAS 6C. For those earning an FSA with GI exams, it is unclear what further work will be necessary to also become an FCIA. That is up to the Canadian Institute of Actuaries.

Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the newsletter editors, or the respective authors’ employers.

Stuart Klugman, FSA, CERA, is a senior staff fellow at the Society of Actuaries. Stuart can be contacted at sklugman@soa.org.