CAS Board Endorses the Concept of Mutual Recognition
Boston, Ma.During its November 2002 meeting, the CAS Board of Directors endorsed the concept of the CAS entering into mutual recognition agreements with other actuarial organizations that provide rigorous education and examination tracks in property/casualty insurance. The Board identified only three organizations with the current potential for mutual recognition agreements with the CAS: the Institute of Actuaries (England and Wales), the Faculty of Actuaries (Scotland), and the Institute of Actuaries of Australia.
In 1999, the CAS Board of Directors had decided against pursuing mutual recognition agreements, which are reciprocal agreements between two actuarial organizations whereby a member of one organization could become a member in the other, subject to the requirements in the agreement. However, there have been developments since then that led the board to reconsider the issue.
As a consequence of the CAS not entering into mutual recognition agreements, during 2000 and 2001 there were movements in Australia and Ireland regarding qualifications for a valuation actuary that excluded CAS members. As additional countries take similar action, CAS members may be constrained to a significant degree from acting as appointed actuaries outside the United States and Canada. Mutual recognition agreements will allow CAS members to be recognized as qualified actuaries and practice in other countries.
The opportunity to increase the number of candidates around the world who are taking CAS examinations was also cited by the board as an incentive for considering mutual recognition agreements. Currently, many students in countries outside North America are discouraged from taking CAS examinations. Without mutual recognition agreements, students who proceed through the CAS examination system and obtain Fellowship may not be recognized as qualified actuaries in their home countries. Although there is a growing demand abroad for CAS educational offerings, students are forced to take exams in their local organizations' general insurance track. In order for the CAS to gain access to a larger body of talented and qualified candidates, the board believes that the CAS needs to be open to more formal relationships with other actuarial organizations and achieve greater acceptance of the CAS training in more countries.
Finally, CAS leaders who attend meetings with leaders of actuarial organizations around the world have indicated that the CAS's past position on mutual recognition is having a negative impact on how the CAS is perceived within the international actuarial community. With the CAS Board having recently established an international strategy that calls for the CAS to be an active participant in the global community of property/casualty actuaries, its prior position on this issue was called into question.
"The Board is excited by the opportunities offered by selective mutual recognition agreements," said CAS President Gail Ross. "Such agreements will facilitate our members' ability to practice in various jurisdictions, increase the attractiveness of our exams to students in other countries, and improve our visibility, stature, and influence in the global actuarial community."
"The Board recognizes that in order to pursue mutual recognition agreements, we will need a constitutional amendment," stated Ross. "To gather member input as we prepare an amendment, over the next few months, members of the Executive Council and Board will be meeting with CAS members and candidates at Regional Affiliate meetings and individual companies to discuss the topic."
A board-level task force, chaired by President-Elect Mary Frances Miller, has been formed to further consider mutual recognition issues as it digests the membership input. A primary focus of the task force will be the potential requirements for an actuary applying for FCAS by mutual recognition. Requirements may include the following.
- Applicants must demonstrate knowledge and experience in the property/casualty field, that is, they must have successfully completed the property/casualty specialty track examinations of their home organization and spent a significant portion of recent years working in the general insurance field.
- Applicants must complete the CAS Course on Professionalism.
- Applicants must obtain letters of reference.
- Applicants will not be allowed to use a "derived qualification" to apply for membership in the CAS.
- Applicants will be subject to the CAS Code of Conduct, Standards of Practice, and Qualification Standards.
The task force has created a page on the Web Site devoted to mutual recognition issues. The Web page, which includes a mechanism for asking questions, voicing opinions, and suggesting issues for the Board to consider, can be accessed from the "Member Services" section.