Alberto Dominguez

October 18, 2012

How Can I Meet the Continuing Education Requirements?AAA, SOA, CAS, JBEA

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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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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

American Academy of ActuariesQualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States

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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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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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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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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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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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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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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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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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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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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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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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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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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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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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Society of ActuariesContinuing Professional Development Requirement

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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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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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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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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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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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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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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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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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Casualty Actuarial SocietyContinuing Education Requirement

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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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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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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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Joint Board for the Enrollment of ActuariesContinuing Education Requirement

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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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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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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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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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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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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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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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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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Additional Questions?

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