The CAS Future Education Task Force (FETF) and the SOA Education Working Group (EWG) explored ways to improve their respective education systems and have proposed changes to the preliminary examinations. In response to the proposals from these two groups, the Joint CAS/SOA Task Force on Preliminary Education was formed to review the two sets of recommendations and make a final recommendation on joint educational activity between the CAS and SOA. The Joint Task Force has completed its work and recommended changes to the subjects covered by current Exams 1-4 to be effective in Spring 2005.

The CAS and SOA Boards recently approved the proposal. Changes to preliminary education will be effective starting in Spring 2005. A notice about these changes can be found in the "Admissions" section.

The new CAS preliminary education structure will consist of three categories: pre-requisites, subjects to be Validated by Educational Experience (VEE), and four examinations.

1. Pre-requisites are topics that will assist candidates in their exam progress and work life but will not be directly tested or validated:
   • Calculus
   • Linear Algebra
2. Subjects to be Validated by Educational Experience (Joint CAS/SOA):
   • Economics
   • Corporate Finance
   • Applied Statistical Methods
3. Examinations:
   • Exam 1 (Joint): Probability (with supporting Calculus), 3 hours
   • Exam 2 (Joint): Mathematics of Finance, 2 hours
   • Exam 3 (CAS Only): Statistics and Actuarial Models, 4 hours
   • Exam 4 (Joint): Actuarial Modeling (Fitting Models and Credibility), 4 hours

VEE Process

Under the new VEE process, candidates will have to submit acceptable evidence in order to demonstrate knowledge of the above subjects. VEE can be accomplished in one of four ways:

• The CAS and SOA approve completion of one or more courses from a recognized college or university. To earn valida- tion, a candidate must receive a grade of B- or better.
• Achieve a pre-set score on a standardized examination such as the Advanced Placement (AP) or College Level Examination Program (CLEP) tests.
• Completion of a CAS- or SOA- administered exam. The CAS will offer exams on the subjects under VEE through at least 2006.
• Completion of other educational experiences as approved by the CAS or SOA. The CAS/SOA will work to ensure that such experiences exist in sufficient quantity.
  

In order to reduce administrative costs, candidates will not be allowed to submit their VEE evidence until after they have passed two exams. However, there will be no time limit on when VEE experiences were completed. VEE administration details will be released in Fall 2004. Further details and learning objectives can be found in the CAS Preliminary Education Proposal.

Changes to Exams 1-4 will be as follows. For Exam 1, direct testing of calculus will be removed, and the material will be narrowed to probability only. Calculus will be a pre-requisite and will be indirectly tested through probability questions on Exam 1. The subjects of economics and corporate finance that are tested on the current Exam 2 will fall under the VEE category rather than being tested on this exam. Exam 2 will then be limited to Mathematics of Finance (Interest Theory). The only change to Exam 3 will be the addition of statistics. Applied Statistical Methods (time series and regression) will be taken off the current Exam 4 and also moved to the VEE category. This should move the focus away from memorizing formulas for Exam 4 and towards analyzing data. Exams 1, 2, and 4 will remain joint exams with the SOA, and Exam 3 will remain a CAS only exam.

Expected Implementation Timeline:

• Late Spring/Early Summer 2004 - Syllabus details for new Exams 1-4 released
• Fall 2004 - VEE administration details released
• November 2004 - Final administration of current preliminary exams
• January 2005 - VEE course approval requests may be submitted
• May 2005 - First administration of new preliminary exams