Presentation to the Atlanta Actuarial Club on the continuing education requirements of the SOA, CAS, AAA and JBEA.

1. How Can I Meet the
Continuing Education Requirements?
AAA, SOA, CAS, JBEA
Alberto Dominguez
October 18, 2012

2. Why are you here?
 To earn 1 unit of AAA Professionalism continuing education credit
 To learn about four distinct continuing education requirements
 American Academy of Actuaries General Qualification Standard
 Society of Actuaries Continuing Professional Development Requirement
 Casualty Actuarial Society Continuing Education Requirement
 Joint Board for the Enrollment of Actuaries Continuing Education
Requirement
 To get answers to some common questions about the AAA, SOA, CAS
and JBEA requirements
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3. Why am I here?
 Member of the SOA Professional Development Committee (2009-2011)
 Discussed rules with folks who worked on drafting the continuing
education requirements documents
 Participated in presentations that introduced the SOA CPD requirement
at the SOA Annual Meetings in 2009 and 2010
 Quotes are from the relevant documents; everything else should be
considered my personal opinion
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4. American Academy of Actuaries
Qualification Standards for Actuaries
Issuing Statements of Actuarial Opinion in the United States
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5. What is the AAA General Qualification Standard?
 http://dev.actuary.org/files/qualifation_standards.pdf
 Effective January 1, 2008, for opinions issued on or after January 1,
2009
 Applies to all actuaries ―who issue Statements of Actuarial Opinion‖
much broader than previous concept of Prescribed Statement of
Actuarial Opinion
 All members of any of the five US-based actuarial organizations
 Even if not a MAAA
 Applies to most actuaries practicing in the U.S.
 Actuary must meet ―Basic Education and Experience Requirement‖
 Actuary must meet ―Continuing Education Requirement‖
 Meeting standard is necessary but not sufficient Actuary must make
the determination that he/she is qualified based on experience and
education (Code of Conduct Precept 2)
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6. How is “Statement of Actuarial Opinion” (SAO) defined?
 ―An opinion expressed by an actuary in the course of performing
Actuarial Services and intended by that actuary to be relied upon by the
person or organization to which the opinion is addressed‖
 ―Based upon actuarial considerations‖ and contains ―advice,
recommendations, findings, or opinions‖
 SAO must ―include an appropriate acknowledgment‖ that the actuary
meets the Qualification Standard
 Need not be in every SAO if client has knowledge of qualification through
totality of communications (ASOP 41)
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7. What constitutes a Statement of Actuarial Opinion?
 Includes
 Any actuarial opinion (written or oral) made by an actuary to a client (internal or
external) in the course of an assignment
 Drafts sent to the client unless the draft clearly states that the draft is not to be
relied on
 Such a draft might still be considered a SAO if
— There is a reasonable likelihood that the recipient will rely on it regardless of intent
— It never becomes finalized and the client ends up relying on it
 Does not include
 Communications between actuaries working on an assignment
 Drafts not sent to the client
 Communications to the client lacking an actuarial opinion, recommendation or
finding (e.g., factual information about a data file)
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8. What is the Basic Education & Experience Requirement?
 Be a credentialed actuary
 Have three years of responsible actuarial experience
 Meet practice area requirement
 FSA/FCAS with fellowship exams in practice area
 FSA/FCAS with 1 year supervised experience in practice area (if fellowship
exams in different practice area)
 ASA/ACAS with 3 years supervised experience in practice area
 For the pension practice area, EA
 Be knowledgeable about the law applicable to the SAO
 Be knowledgeable about the ASOPs applicable to the SAO
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9. What is the AAA Continuing Education Requirement?
 30 ―relevant‖ credits in the calendar year prior to the year in which a
SAO is being issued
 Shortfall can be made up in the current year prior to issuing any SAO but will
not count towards CE credits for that year
 Excess credits can be carried over for one year
 1 credit = 50 minutes
 At least 6 credits must be from ―organized‖ activities
 At least 3 credits must be on ―professionalism‖
 Maximum of 3 credits on general business skills and consulting topics
 Client relationship management, presentation skills, communication skills,
project management, personnel management
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10. What does “relevant” mean?
 ―Broadens or deepens an actuary’s understanding of one or more
aspects of the work an actuary does‖
 ―Expands an actuary’s knowledge of practice in related disciplines that
bear directly on an actuary’s work‖
 Computer skills and statistics would generally be considered relevant
 Law, investments, accounting, economics that bear directly on your work
might be considered relevant rather than general business skills
 ―Facilitates an actuary’s entry into a new area of practice‖
 ―Ultimately, it is an actuary’s responsibility to make a reasonable, good-
faith determination of what continuing education opportunities will
enhance the actuary’s ability to practice in a desired field.‖
 AAA website: ―you learned something‖ or ―you had the intent to learn
something‖ or ―you were confirming your existing understanding‖
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11. What does “organized” mean?
 Must involve interaction with actuaries or other professionals working
for a different organization
 Must be directly relevant to area of practice of SAO
 Can consist of conferences, seminars, webcasts, in-person or online
courses, committee work
 In-house meetings can satisfy this requirement by using outside
speakers
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12. What does “professionalism” include?
 Studying Code of Professional Conduct or Actuarial Standards of
Practice
 Commenting on ASOP exposure drafts
 Business ethics would probably be considered professionalism rather
than ―general business skills‖
 Learning about qualification standards and continuing education
requirements
 This session
 Self-study of the AAA, SOA, CAS and JBEA source documents
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13. When does the AAA Qualification Standard apply to me?
 Applies the year you become credentialed for any SAO issued the
following year
 IMPORTANT: There is no grace period under the AAA Qualification Standard
 Confirmed during Academy webcast on June 17, 2010
 If you get your ASA/ACAS in 2012…
 Standard applies to any SAO issued starting January 1, 2013
 Must meet Continuing Education requirement in 2012
 Make sure you meet all the requirements in addition to continuing
education before issuing any SAO
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14. What if I am still taking exams?
 Hours spent meeting the basic education and experience
requirement (i.e., study time) may be applied toward the 30 credit
requirement
 You must still satisfy the 3 credit professionalism requirement
 You must still satisfy the 6 credit organized activities requirement
 Study time is NOT organized
 Exam seminars are generally considered organized
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15. Is there an AAA exemption for Enrolled Actuaries?
 Yes, but not really
 EAs who are not members of any actuarial organization do not fall
within the scope of the Qualification Standard
 EAs whose only SAOs are Schedule SB/MB certifications and other
government-required forms are exempt if they meet the JBEA CE
requirements
 EAs who issued any SAO related only to plans to which ERISA applies
were exempt through 12/31/2010 (for any SAO issued in 2011) if they
meet the JBEA CE requirements
 AAA rules applied beginning in 2011 (for any SAO issued in 2012)
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16. What if I work in multiple practice areas?
 Need only 30 credits total
 Need only 3 credits of professionalism
 Must ―include material in each practice area‖
 Does the actuary need 6 organized credits in each of the areas?
 Yes
 No
 Up to the actuary’s judgment
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17. What documentation does the AAA require?
 What, where, when, how much, how does it meet compliance?
 How Can I Meet the Continuing Education Requirements?
 Atlanta Actuarial Club October 18, 2012 50 minutes
 1 unit of professionalism credit under AAA QS Standard
 Tools
 AAA provides an online tool available to everyone (TRACE)
 CCA provides an online tool for members
 Can just use a personal spreadsheet or document
 Must be maintained for minimum of 6 years after the year applicable
 No attestation or other official submission is required
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18. Should I keep registration/certificate or slides/notes?
 Recent AAA and CCA presentations have stated that you don’t need
to keep meeting registration/certificate or slides/notes
 However… Substantiating Compliance – ―An actuary should be
prepared to provide evidence of compliance including certificates of
attendance, meeting outlines or handouts, and notes related to other
activities, when requested by the appropriate counseling and
disciplinary body of the profession.‖
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19. Society of Actuaries
Continuing Professional Development Requirement
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20. Do I need to concern myself with the differences between
AAA QS and SOA CPD / CAS CE?
 Generally, no
 If you are subject to the AAA US Qualification Standard, you should elect
to meet the SOA CPD or CAS CE requirement through satisfying the
AAA Qualification Standard
 No need to track credits under two different sets of rules
 IMPORTANT: Make sure you don’t confuse the two sets of rules in
tracking whether you’ve satisfied the requirements; if using AAA QS to
satisfy SOA / CAS requirement then track all continuing education
activities using AAA QS and ignore SOA / CAS rules
 Must still attest SOA / CAS compliance even though the AAA
Qualification Standard does not require attestation
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21. What if I really want to know the SOA rules anyway?
 http://www.soa.org/files/pdf/current-cpd-req.pdf
 Applies to all SOA members ASA, CERA, FSA
 60 credits on a rolling two-year cycle
 At least 45 credits must be in ―job-relevant‖ skills
 1 credit = 50 minutes
 At least 30 credits must be from ―structured‖ activities
 At least 3 structured credits must be on professionalism
 Maximum of 15 credits on general business skills and consulting topics
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22. What does “structured” mean to the SOA?
 Opportunity for interaction among participants
 Recorded sessions count if the original session allowed such opportunity
 Effective sittings on FSA or EA examinations and successful completion
of FSA modules count as structured (5-15 credits); you can count
additional time as self-study time
 At least 7.5 structured credits must be from a source other than your
employer
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23. What does “job-relevant” mean?
 Education is job relevant if it broadens or deepens a member’s
knowledge and is
 Required for the member’s current role
 In related disciplines that bear directly on the member’s work
 In a new area in which the member contemplates practicing in the future
 Reminder: the AAA definition of ―relevant‖ is
 Broadens or deepens an actuary’s understanding of one or more aspects of
the work an actuary does
 Expands an actuary’s knowledge of practice in related disciplines that bear
directly on an actuary’s work
 Facilitates an actuary’s entry into a new area of practice
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24. When does the SOA requirement apply to me?
 New ASAs are required to begin earning CPD credits the calendar year
following attainment of ASA and are subject to reporting at the end of
the second full calendar year after attainment of ASA
 If you get your ASA in 2012…
 Must meet the CPD requirement for the 2013-2014 cycle
 Must attest as of 12/31/2014
 Do NOT need any CPD credits in 2012
 Do NOT need to attest as of 12/31/2012 or 12/31/2013
 REMEMBER: There is no grace period under the AAA Qualification
Standard
 For AAA QS purposes, must earn CE credits in 2012 for 2013 SAOs
 And in 2013 for 2014 SAOs
 Just don’t need to attest until SOA requires it as of 12/31/2014
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25. What are the SOA attestation rules?
 IMPORTANT: Required whether you use SOA rules or alternative
compliance (AAA rules)
 Members ―must certify compliance at the end of each calendar year‖ for
the preceding rolling two year cycle
 Most recent rolling two-year cycle was January 1, 2010, to December
31, 2011
 Will need to attest again as of 12/31/2012 for rolling two-year cycle from
January 1, 2011, to December 31, 2012
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26. How does SOA attestation work?
 Go to www.soa.org (My Account) and select ―Update my SOA CPD‖
 Click the box that states ―I certify that I have fulfilled the SOA CPD
requirement for 2011-2012 by meeting the following‖
 Could attest compliance under SOA rules only if you tracked them
separately from AAA rules; more commonly, will attest under the
alternative compliance path
 US AAA Qualification Standard – Click the box that states ―Qualification
Standard for Actuaries issuing Statements of Actuarial Opinions in the US‖
 SOA CPD Requirement – Click the box that states ―Basic Requirement
provisions of Section B‖
 CIA (Canada), FOA/IOA (UK) and IAA (Australia) paths are not generally
available to actuaries practicing in the US
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27. How will SOA monitor compliance?
 Actuarial membership directory was altered to indicate Compliant or
Non-Compliant (or Retired)
 If you forget to attest by deadline, directory can be updated once you attest
 If you have a shortfall, you can attest once you’ve made up the shortfall
 You are still a member in good standing if you
— Don’t falsely attest compliance
— Inform anyone relying on your actuarial expertise that you did not meet the SOA
CPD requirement
 Approximately 1% of members (200) will be audited each cycle
 2nd quarter of each year
 Will be required to provide log of activities used to satisfy compliance
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28. Casualty Actuarial Society
Continuing Education Requirement
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29. What are the key elements of the CAS CE policy?
 Applies to all ACAS and FCAS members who provide Actuarial Services
 Can meet the requirements by satisfying the continuing education
requirements established by a national actuarial organization recognized
by the policy (e.g., the AAA Qualification Standard)
 Can elect to meet the CAS policy directly
 Must maintain a log of continuing education activities
 Must certify compliance at the end of each year, beginning 12/31/2011
 CAS online membership directory will be modified to include a heading
for CAS CE, which will be available to the general public
 Compliant or Non-Compliant (or Not Currently Providing Actuarial Services)
 CAS may randomly audit a small percentage of members
 CAS members listed as Non-Compliant may be subject to penalties
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30. What are the CAS rules?
 http://www.casact.org/cms/files/CAS_CE_Policy.pdf
 60 credits on a rolling two-year cycle
 30 credits in 2011 (half of a two-year cycle)
 New members must earn 30 credits in the year following admission
 At least 45 credits must be ―job-relevant‖ excluding professionalism
 CAS has adopted AAA’s definition of job-relevant
 1 credit = 50 minutes
 At least 30 credits must be from ―structured‖ activities
 At least 6 credits must be on professionalism
 Maximum of 6 credits on general business skills and consulting topics
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31. What does “structured” mean to the CAS?
 Organized activity or experience derived from an organized activity in
which there is opportunity for interaction or viewing of interaction among
participants
 Viewing recorded presentations that included a Q&A discussion would qualify
as structured
 Effective sittings on FCAS examinations count as structured (15 credits);
you can count additional time as self-study time
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32. Joint Board for the Enrollment of Actuaries
Continuing Education Requirement
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33. What is the JBEA Continuing Education Requirement?
 New rules effective for the 2011-2013 cycle
 http://www.irs.gov/pub/irs-utl/2011-7573.pdf
 36 credits in each three-year enrollment cycle
 1 credit = 50 minutes
 ―Core‖ requirement
 If first full cycle (enrolled in 2008 or later), at least 18 credits must be core
 Otherwise (enrolled before 1/1/2008), at least 12 credits must be core
 12 credits must be in ―formal‖ programs
 2 credits relating to ethical standards
 The shortest recognized program is 1.0 credit
 The same course of study cannot be used more than once within a
given cycle
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34. When does the JBEA requirement apply to me?
 New EAs generally must satisfy a prorated continuing education
requirement in the same cycle they obtain the EA
 If you become an EA during the first year of the cycle (2011)…
 Must complete 24 credits
 At least 12 credits must be core and 8 credits must be formal
 If you become an EA during the second year of the cycle (2012)…
 Must complete 12 credits
 At least 6 credits must be core and 4 credits must be formal
 If you become an EA during the third year of the cycle (2013)…
 Exempt from the continuing education requirements until the next enrollment
cycle
 Must still file a timely application for renewal
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35. What constitutes a “qualifying program”?
 Is conducted by a ―qualifying sponsor‖
 Covers current subject matter
 Includes written outlines or textbooks
 Is developed by individual(s) qualified in the subject matter
 Is taught by instructors, discussion leaders, and speakers qualified with
respect to the course content
 Includes means for evaluation by the Joint Board of technical content
and presentation
 Provides a certificate of completion
 Provides a certificate of instruction to each person who served an
instructor, discussion leader, or speaker.
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36. What constitutes a “formal program”?
 Meet all qualifying program requirements
 Participants must have opportunity to interact with another individual
qualified with respect to the course content who serves as an instructor,
whether or not in the same physical location
 Whether a program qualifies as formal determined on a participant-by-
participant basis
 Formal with respect to a participant if the participant simultaneously
participates in the program in the same physical location with at least two
other participants engaged in substantive pension service
 Groups of three or more participants in the same physical location may
participate in person or via internet, videoconference, or teleconference
 If program is pre-recorded, there must be a qualified individual who
serves as instructor and is available to answer questions immediately
following the pre-recorded program.
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37. What constitutes “core” credit?
 ―Core subject matter is program content and knowledge that is integral
and necessary to the satisfactory performance of pension actuarial
services and actuarial certification under ERISA and the IRC‖
 Characteristics of actuarial cost methods under ERISA
 Actuarial assumptions
 Minimum funding standards, maximum deductible contributions
 Titles I, II, and IV of ERISA
 Requirements with respect to the valuation of plan assets
 Requirements for qualification of pension plans
 Tax treatment of distributions from qualified pension plans
 Excise taxes related to the funding of qualified pension plans
 Standards of performance (including ethical standards) for actuarial services
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38. What constitutes acceptable “non-core” credit?
 Non-core credit is ―designed to enhance the knowledge of an EA in
matters related to the performance of pension actuarial services‖
 Economics
 Computer programming
 Pension accounting
 Investment and finance
 Risk theory
 Communication skills
 Business law and general tax law
 Note that this is a much narrower range of acceptable topics than those
allowed under either the AAA Qualification Standard or the SOA
Continuing Professional Education Requirement
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39. What kinds of other activities qualify for JBEA credit?
 Serving as an instructor, discussion leader or speaker for a qualifying
program
 Four-for-one credit will be awarded in recognition of both presentation and
preparation time
 Credit may not exceed 50% of the continuing education requirement for an
enrollment cycle
 Publishing relevant articles, books, films, audio or video
 Credit may not exceed 25% of the continuing education requirement for an
enrollment cycle
 Service on a Joint Board advisory or examination committee
 Passing SOA examinations limited to the number of hours scheduled
for each examination and may be applied only as non-core credit
provided the content of the examination is acceptable non-core
 Presumably CSP-RU and DP-RU both count as non-core credit
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40. What documentation does the JBEA require?
 Programs must provide a written outline and a certificate of attendance or
completion
 Actuary must retain “sufficient documentation to establish
completion of such hours” for 3 years after the end of the cycle
 Name of sponsor
 Location of the program
 Date(s) attended
 Name(s) of the instructor(s), discussion leader(s), or speaker(s)
 Core and non-core credit claimed for program
 Title of program and description of content
 Certificate of attendance/completion or signed statement of the hours of attendance
obtained from the sponsor
 Compliance is determined at the time of applying for renewal of enrollment
 Joint Board may require any EA to provide copies of any records required to
be maintained
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41. Additional Questions?
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