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CAS Unveils Plans to Award the CERA Designation

On November 13, 2009, the CAS, SOA and 12 other actuarial organizations across the globe signed a treaty for the purpose of establishing a new enterprise risk management (ERM) designation, designed to promote actuaries in the field of ERM. The credential will be awarded through qualified participating associations and will incorporate and adopt the name CERA, or Chartered Enterprise Risk Analyst, which is currently issued by the Society of Actuaries (SOA). The credential will identify actuaries who meet stringent education requirements in ERM and are governed by a strong code of professional conduct.

While the treaty signing was an important milestone, it only marked the beginning of the process that will eventually allow the CAS to award the CERA credential in the future.

Forming the CERA Global Association
During early 2010, the international CERA Treaty Board was formed. The Board is the governing body of the global ERM credential, and the CAS is represented on the Board by John Kollar. Per the treaty, the CERA Review Panel was also formed. The purpose of the Review Panel is to ensure that each treaty organization’s proposed CERA program meets the treaty standards. As each organization applies to become an Award Signatory (i.e., obtains permission to award the CERA designation) it must first be reviewed by this panel, which then makes its recommendation to the Board. The Board reviews and acts upon all Award Signatory applications. The CAS’s representative on the Review Panel is Steve D’Arcy. In addition, Gary Venter is a reviewer.

The CERA Board created a legal entity under Swiss law to house the intellectual property rights shared by all treaty-signing organizations; the organization is called the CERA Global Association.

The process of reviewing applications to become an Award Signatory began with the application of the Institute of Actuaries (U.K.), followed by the Institute of Actuaries of Australia and the CAS. The review of the CAS’s program has just been started, but no official timeline for completion of the review has been announced. Once the review is completed and the international Board has approved the application, the CAS may begin awarding the CERA designation. Review of other organizations’ applications will follow.

Proposed CAS Paths to Obtaining CERA
The CAS has proposed, in its application, to offer two paths by which individuals may obtain the CERA (pending CERA Treaty Board approval).

The first path involves exams, and there are four ways that candidates may earn CERA through this process:

  1. Under the 2011 syllabus, CAS Associateship requirements plus successful completion of new Exams 7, 9, and RM will be required to qualify for CERA. Exam RM is American Institute for Chartered Property Casualty Underwriters Exam ERM 57—Enterprise-Wide Risk Management.   
  2. Fellows who do not satisfy the first criteria are required to successfully complete a rigorous ERM seminar plus Exam RM to qualify for CERA. This option will be offered on a transitional basis for a limited period of time, with the exact timeframe still to be determined.
  3. Associates who do not satisfy the first criteria are required to have credit for current (2010) Exam 8 and successfully complete the rigorous ERM seminar plus Exam RM to qualify for CERA. This path will be offered on a transitional basis for a limited period of time, with the exact timeframe still to be determined.
  4. Under Options 2 and 3, Exam RM and the rigorous ERM seminar can be replaced by either of the following examinations: (a) SOA Advanced Finance/ERM exam including its related Internet modules or (b) the U.K. ST9 Enterprise Risk Management Specialist Technical Exam. This path is anticipated to still be available when the rigorous ERM seminar is no longer offered. Otherwise, after the ERM seminar is no longer offered, the only other way to qualify for CERA is option 1 above.

The second path is called the Experienced Practitioners Pathway (EPP), consistent with the Treaty, which states:

“The [CERA Treaty] Board may choose to approve an arrangement whereby an Award Signatory may…award the Treaty Designation to a number of its members who are leading practitioners and academics and who are considered, by virtue of their experience, to have demonstrated a level of knowledge and understanding of ERM comparable to that achieved by other Designees.”

The CAS plans to model this program after the SOA’s. Pending approval by the CERA Treaty Board, the following steps would be implemented for the EPP:

  1. An announcement will be sent to CAS members inviting them to apply for CERA via EPP.   
  2. Interested candidates will complete an application in which they must demonstrate substantial professional ERM expertise.
  3. A CAS review team will review all applications and make a determination as to which applicants are to be awarded CERA through EPP.
  4. Accepted applicants must participate in a seminar covering advanced enterprise risk management topics. This seminar is anticipated to span two days and would be taught by CAS CERA members and other qualified faculty. Note that the EPP seminar is NOT the same seminar as that required as part of the exam path. Exam-path candidates must attend the exam-path seminar; EPP-path candidates must attend the EPP seminar.
  5. Upon completion of the seminar, applicants are awarded CERA.
  6. Applicants declined CERA through EPP may pursue CERA through the normal exam route.

It is expected that the EPP will be offered for a limited time. Once the program begins, applications would be accepted for a period of a few months. Several EPP seminars would then be offered over a period of 12 to 18 months to accommodate schedules. After that time, the EPP path would no longer be available, and those pursuing CERA would need to do so through the exam route. Additional details regarding the application process and the seminar will be provided as soon as they are available.

In addition to these two pathways, there are currently about 40 CAS members who obtained the CERA designation through the SOA. These members will be invited, but not required, to transfer their designation to the CAS. There will be no additional qualification requirements for this group.

Timeline for Awarding CERA
The proposed CAS CERA program is being reviewed by the CERA Review Panel, and then would be considered by the CERA Treaty Board, and this process may span a couple of months. The EPP could begin shortly after final approval by the CERA Treaty Board. If, for illustration, approval is received at the end of August 2010, an EPP announcement and invitation to apply would be released right away. Applications would be accepted and the CAS Review Team would begin reviewing individual applications. Under this scenario the first EPP seminar could be offered in late 2010 or early 2011.

Exams for the revised 2011 education structure will begin in May 2011. Exam RM is currently available through the American Institute for Chartered Property Casualty Underwriters as ERM 57—Enterprise-Wide Risk Management. The exam is offered by computer-based testing in four two-month windows each year. The rigorous ERM seminar could be available in the fourth quarter of 2010.

Volunteer Opportunities
Many CAS volunteers are currently involved in various aspects of the CERA designation, including syllabus and exam design and EPP design. In addition, volunteers are serving in different roles with the CERA Treaty Board and CERA Global Association. More volunteers are needed in the effort to launch CAS CERA. On an on-going basis, volunteers will be needed for the ERM Committee (whose charge includes the administration of the CERA within the CAS). Volunteers will also be needed to represent the CAS on the international board and review teams. If you are interested in volunteering for these efforts, please complete the Participation Survey or contact Larry Peacock at the CAS office at lpeacock@casact.org or (703) 276-3100.

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