2006 General Meeting Assemblée générale 2006 Chicago, Illinois
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Transcript of 2006 General Meeting Assemblée générale 2006 Chicago, Illinois
2006 General MeetingAssemblée générale 2006
Chicago, Illinois
Canadian Institute
of Actuaries
L’Institut canadien desactuaires
Future Education Design
OF-28Chris Fievoli, Mary Hardy,
Michel GiguereOctober 20, 2006
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Purpose of Session
• Bring membership up to speed on discussions pertaining to education of Canadian actuaries– Still in idea-generation phase– Nothing “carved in stone”– Still open to new concepts and
suggestions
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Agenda
• Background (Chris Fievoli)• Overview of Foreign Actuarial
Education Systems (Mary Hardy)• Overview of Education System for
Other Professions (Michel)• Implementation Issues (Michel)• Perspectives (Mary, Michel, Chris)• Comments and Questions
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2006Background
• Stems from CIA investigations into future of profession– Task force chaired by Alex Brown– Identified future education as an issue
to investigate– CIA has been talking about taking a
greater role in the education of Canadian actuaries
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2006Background
• External Influences– New SOA system recognized
Validation by Educational Experience
– Criticisms of Morris Report– UK actuaries too “insular”– Lagging modern financial topics
• Desire to avoid same criticisms being raised in Canada
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2006Background
• External Influences– New SOA system makes use of
interactive modules• Improvement on traditional self-study
– Canadian universities have developed strong actuarial programs
• XX universities now offer actuarial courses and programs
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2006Background
• SOA view on “alternate route”– Considered by SOA board– Agreed in 2006 to defer decision until 2008
• Allow time for new system to stabilize
• Canadian university system is ideally suited to this– Could be used as a “pilot project”– No desire to break away from SOA/CAS
• Still view as a partnership
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2006Background
• Concern over travel time– Length of time to qualification may
discourage potential applicants– Part of the problem is lack of overlap
between university courses and SOA exams
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2003 Survey of Universities
• 10 universities participated– Receptive to concept of developing
programs to replace or complement Preliminary Education
– Strong desire to maintain flexibility in program design
• CIA would need to recognize differences
– Several issues to iron out• i.e. passing grades
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FEM Task Force
• Future Education Model (FEM) task force set up in 2005– Key points to consider:
• How can we improve the education of actuaries in Canada?
• Can we make more efficient use of the university system in Canada?
• Can we build on the strengths of the current SOA/CAS/CIA volunteer system?
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Vision of FEM Task Force
• Develop process by which university courses could be used to exempt students from writing SOA preliminary examinations
• Build necessary relationships between CIA and Canadian universities
• Longer-term vision may be more ambitious– Will take it one step at a time
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2006 Actuarial Research Conference
• Presentation was made at August conference
• Generally receptive• Issues to work out
– Program vs. course accreditation– Control over standards– Volunteer resources– Need for external reviews
Alternative Route – UK and Australian Examples
Mary Hardy
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UK system
• UKAP=UK Actuarial Profession• 4 stages to qualify
– Core Technical (CT)– Core Applications (CA)– Specialist Technical (ST)– Specialist Applications (SA)– Business Awareness and
Communications
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UK system
• Exemptions available from some CT subjects based on University grades (like VEE)– Economics– Accounting– Statistics
• Exemptions available from all CT based on Uni grades, selected universities.
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UK system
• Exemption ‘granting’ status for 30 Universities– 13 in UK, 5 in Oz, 7 in RSA, 3 in Ireland etc– In UK, 5 major programs offering full CT
• Independent Examiner– Monitors each exam paper
• Course-by-Course Exemption,– usually B+-ish requirement
• Recommendations only
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2006UK System
• Still, only approx 25% enter profession with act sci degrees & exemptions
• One university offers Specialist exemptions
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Notes on the UK system
• System moving towards accreditation
• Some Unis will not be accredited• Better control
• After >25 years, exemptions are still not popular with some employers and fellows
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What did Morris say?
The current model encourages:• Narrow skills rather than broad principles• Insularity
– Discourages exchange of ideas• Prolongs qualification• Insular approach to syllabus development• Pre-occupation with exams, not learning
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What did Morris suggest?
• Profession, employers and universities cooperate towards…
• Accreditation of university programs• Creation of post-grad conversion
courses for non act sci undergrads
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Australia
• Few programs, in strong universities
• Most new entrants take act sci undergrad
• Similar demographics to Canada• Historically linked to UKAP
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Australian system
• 4 Accredited universities– Melb, NSW, ANU, Macq.
• Accreditation based on courses, history, faculty.
• Offer alternative to Pt I (CT)– Exams or exemptions also used
• Pt II (similar to FAP) must be taken through unis (DE possible)
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Australian system
• No (apparent) member dissent– Why not!?
Implementation Issues
Michel Giguere
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Plan of my presentation
• Other professions in Canada• Changes being contemplated• Course by course approach or
accreditation of actuarial programs• How a new system could work
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Other professions in Canada
• Medical profession– Tight control over the « offer », namely for
social reasons– Less likely to serve as a model
• Accounting profession– Uniform final examination– Require a University degree– System of internships (after the University)– Leading to full recognition (like
Fellowship)
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Other professions in Canada (cont’d)
• Engineering profession– Acreditation of University programs– Much closer agreement as to the contents of
the programs (because no uniform final examination)
– Existence of a joint Board (professionals and academics) to define the required contents and the extent of the review process
– Leading to full recognition (like Fellowship)
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Other professions in Canada (cont’d)
• Actuarial profession– Current system:
• System independent of universities, except for VEE credits on subjects seen as peripheral
– New system:• Not likely to establish a tight limit on offer• Not likely to establish a uniform final
examination (redundancy of efforts)• Not likely to lead to full recognition (i.e.
preliminary examinations or associateship rather than fellowship)
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What changes are being contemplated ?
• Changes contemplated would take into account the quality of existing Canadian actuarial programs
• New approach would likely focus on Preliminary Examinations (first four exams)
• Other steps could be taken later, depending on experience
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What changes are being contemplated ?
• The new system would make a better use of the universities in the education of actuaries
• This would create a partnership between the universities and the profession
• The old system would still exist for those who do not have a ready access to the Canadian Universities, or prefer the traditional route
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How this proposal would work ?
• There are basically two ways such a proposal could work for the Preliminary Examinations:– Course by course exemption systemor– Acreditation of a bachelor degree or
major in actuarial science
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Course by course system
• Could look alike the current VEE system
• Need to define contents of courses and learning objectives
• Need to define uniform passing marks or grading
• Need to establish which courses meet these criteria
• Periodic review• Seek SoA / CAS mutual recognition
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Course by course system (cont’d)
• Some pros and cons– Avoids duplication of testing– Greater use of universities– Closer to VEE, easier to sell– Technical or micro-system– Students can « repeat » missing parts– Universities somewhat « adapting »
to the profession (less likely)
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Acreditation system
• Would look more like other professions system
• Joint acreditation Board regrouping academics and professionals
• Need to define topics to be covered (vs contents of courses) and learning objectives
• Need to review quality of Faculty, level of difficulty of program
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Acreditation system (cont’d)
• Need to define overall grade for acreditation (vary by University or standardization of grading)
• Need to establish which University programs meet these criteria or what they must change
• Periodic review• Seek SoA / CAS mutual recognition
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Acreditation system (cont’d)
• Some pros and cons– Recognizes the value of university
education (uses their expertise)– Focuses more on variety and quality of
support, tools and gradual learning– Better insurance of overall quality (more
macro than micro)– Different from the past; we went through a
tougher route; not retaining only the quickest; less pressure
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Course by course or acreditation ?
• Considering the point of view of academics (more flexibility to define good programs within defined framework)
• Considering the approach of other professions (recognition or testing of programs)
• Considering we are looking at Preliminary Examinations only
• The FEM Task Force could be leaning towards proposing an acreditation approach in opposition to a course by course exemption
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Next steps
• Resources and steps required– Staff a joint board (profession and
university)– Define objectives, structure,
processes, thresholds– Create review tools and review
committee– Sell to the profession, to the EEC, to
the CIA Board
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Next steps
• Timeline– Two years ?– Students entering actuarial programs
in Sept. 2009 ? 2008 ?
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2006Point of view
• Value of a University formation• Requirement of a University
formation• Course by course ?
– No, thank you• Value of a B-
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2006Point of view
• Better technical actuaries or better business actuaries ?– Probably both; it’s your choice
• More actuaries ?– Probably; maybe better equipped
• A little story about the strength of current University actuarial students
An Academic Perspective
Mary Hardy
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University* view of accreditation
• Students can focus – Learning style for Uni exams for
SOA exams• Retain good candidates
– Who otherwise leave for eg finance• Increased curriculum freedom
– Textbooks– Nimble syllabus
* OK, not necessarily every university…
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Trends in SOA Life Cons Exams
When was this question asked?
Find the net single premium at age 55 for a deferred continuous annuity of $1 per year commencing at age 65, with a death benefit before age 65 equal to the benefit reserve at death.
Answer: 1959
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How about this one?
For a deferred whole life annuity-due on (25) with annual payment of 1 commencing at age 60, you are given:
(i) Level benefit premiums are payable at the beginning of each year during the deferral period.
(ii) During the deferral period, a death benefit equal to the benefit reserve is payable at the end of the year of death.
Calculate the benefit reserve at the end of the 20th year.
Answer: 2004
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Typical SOA questionThe random variable X has
survival function:
Two values of X are observed to be 2 and 4. One other value exceeds 4.
Calculate the maximum likelihood estimate of θ.
222
4
)(x
xS
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Typical University Question might add…
(b) Prove MLE is asymptotically unbiased
(c) Explain why the MLE might not be the best estimator for this data
(d) Given prior, calculate Bayesian estimate
(e) Discuss advantages and disadvantages of Bayes cf MLE
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University learning should …
• Be higher level cognitive• Offer more realistic problems• Closely link assessment and learning• Offer more collegial environment,
exchange of ideas• Be up-to-date in knowledge and
technology• Bring in relevant research
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Accreditation would..
• Attract the best students to the profession
• Qualify them efficiently• Using relevant, lasting, up-to-date
teaching and materials• Exploit the strong university base in
Canada• Strengthen the profession and the
industry
Perspectives – Non Academic
Chris Fievoli
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Observations on Current System
• Value proposition to potential candidates– Investment of 7-10 years should
provide commensurate benefits– How does our profession stack up
against medical / legal professions?– Does the value proposition work for
the best and brightest?
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Observations on Current System
• How much do we educate?– SOA system has been traditionally
“self-study”– More emphasis placed on selection of
materials and testing; less emphasis on education per se
– New module-based system is step in the right direction
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Concerns with University Exemptions
• Is this making the system easier?– i.e. “I went through the exam system;
why shouldn’t they?”– Do university courses cover the
required material?– Has been successfully used by other
professions• Would you go to a doctor with no
university training?
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Changing Times
• Other disciplines (financial engineers, risk practitioners) are figuring out what we do– No “magic” to actuarial science– Someone with a strong quantitative
background can become familiar with what we do
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Changing Times
• We need to stay ahead of the curve• SOA system was not a rapid
responder in the past– Turnaround time to source material,
develop, edit, and review was prohibitive
– Tried to address this through PD– PEC was good example
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Changing Times
• University system may be best method to maintain leading edge– Can still keep elements of current
actuarial education • Work experience• Examinations• Professionalism courses• PEC
Questions?