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Letter to the Editor
Why Take Exam 7-Canada?
To the Editor:
I was upset to hear that some Canadian CAS students plan to write Exam 7-US rather than Exam 7-Canada. I would like to address my comments to these students.
I urge you to reconsider your decision. I hope that the points raised in this letter will address your concerns. The reasons given for writing Exam 7-US rather than Exam 7-Canada are as follows:
1. With the new rules I can still qualify as an FCIA, subject to an additional 18 month waiting period.
2. There is significantly more material on Exam 7-Canada.
3. The ACTEX study manual for Exam 7-Canada will not be available until March.
4. There are no exam seminars for Exam 7-Canada.
5. It will be harder to set a fair pass mark because there are fewer students writing.
6. A lower percentage of students will pass Exam 7-Canada because there is more new material that will result in a harder exam.
Let me consider each of these points in turn.
1. The new [CIA] membership rules were developed in response to the mutual recognition initiative. The purpose of mutual recognition is to make it easy for actuaries to move between countries with similar (high) standards for admission. If we are successful in negotiating these agreements, many of you will benefit by having the opportunity to accept assignments outside Canada as a fully qualified actuary.
These agreements, however, are not designed to make it easier for students to qualify (i.e., by writing exams in a jurisdiction where the standards are lower). If abuses occur I am sure that changes will be made.
2. The Study Kit for Exam 7-Canada is larger than the US equivalent but it contains some material provided for information that will not be tested. In particular:
Klar, Linden, Cherniak, and Kryworuk, Remedies in Tort amounts to a maximum 50 pages when taking into account what really has to be studied (rather than the 175 pages which are included in the Study Kit).
The OIC, "Section 411/412 Filing Guidelines for Proposed Revisions to Automobile Insurance Rates and Risk Classification Systems" has been included in full in the Study Kit: of all these, only 24 pages of Attachment A have to be studied. The rest has been included for sake of completeness and for future reference for those students involved in rate filings.
KPMG, Eckler & Exactor, Motor Vehicle Insurance for BC—Volume I is included in full (60 pages) but results in an effective page count of 30.
Facility Association, Plan of Operation is included in full in the Study Kit (60 pages) but only 14 of those pages have to be studied.
IBC, Discounting of Loss Reserves in the P&C Insurance Industry—Phase II is also included in full (42 pages of text, 78 pages of appendices) but has an effective page count of 25 pages (no appendices).
I think that you will find that the effective page count of both exams is about the same. In addition, many will be familiar with some of this material through work assignments and much of this information will be useful on the job. If you write the US exam, you will be at a disadvantage to US students who use some of this material in their day-to-day work.
3. This is true but all students are affected equally and I am sure that the exam difficulty and passing mark will be adjusted accordingly.
4. This also is true but all students are affected equally and I am sure that the exam difficulty and passing mark will be adjusted accordingly.
5. It is not clear that a low number of students writing an exam reduces the chance of passing. There is more randomness in the results with fewer candidates, but it would seem equally likely that they would pass more students as fewer.
6. The two exams are different and independent. There will be no comparison between the students on the different exams.
As a student I resented having to learn the minutiae of US law and regulation. Not only did I not use this information but I had to learn the Canadian equivalents on my own. Many of our members have worked very hard to provide you with a good quality Canadian exam. I hope you will take advantage of this opportunity.
Please note that while I am president-elect of the Canadian Institute of Actuaries, the views expressed are my own and are not the official position of the CIA.
Sincerely,
Dave Oakden, FCAS, FCIA