CAS Action on Developments Regarding the SOA Consolidation Proposal
By Gary R. Josephson, CAS President-Elect
Brad Smith, in his inaugural speech as President of the Society of Actuaries, called for the Society of Actuaries (SOA), Casualty Actuarial Society (CAS), and American Academy of Actuaries (Academy) to consolidate, stating, “There is absolutely no need for three separate professional organizations…to exist. They need to consolidate into one efficient, effective organization.”
Following Mr. Smith’s speech, the SOA Board authorized the formation of a task force to explore “whether other U.S.-based actuarial organizations are willing to discuss a possible consolidation of the actuarial professional organizations in the United States, consider various options for such a consolidation, and make a recommendation to the Board for possible action.”
This is not the first time that a consolidation of the CAS and SOA has been suggested. Each time the CAS Board has considered such proposals, we have heard very clearly from our members that any advantages that might be gained from consolidation would be outweighed by the loss of independence and autonomy that would result.
In advance of the November 2011 CAS Board meeting, the Executive Council established the following vehicles for eliciting member reactions to the latest proposal:
- Inviting comments on the CAS Roundtable (blog).
- Asking members to complete an on-line poll.
- Asking the CAS Member Advisory Panel to complete a somewhat longer survey.
The three feedback vehicles produced generally consistent results. Comments were overwhelmingly negative. And the poll and survey indicated that a substantial majority of the respondents disagreed with the consolidation proposal. (The results of the on-line poll can be found on the CAS Roundtable at blog.casact.org.)
The CAS Board met on November 6, 2011, and discussed the proposal. After extensive discussion, the Board issued the following statement:
The CAS is the only non-nation specific actuarial organization exclusively focused on property-casualty risks, and our members find this of value. Our members have made it clear, and the CAS Board agrees, that they do not see benefits in consolidation with other actuarial organizations. The CAS has been, and continues to be, strongly in favor of cooperative efforts with other organizations, including efforts to address the concerns raised in the SOA President’s speech.
In addition to unanimously agreeing to release the statement, the CAS Board chose not to participate in the SOA task force.
Somewhat overshadowed by the discussion of consolidation are some of the other issues raised in Mr. Smith’s speech, most notably the actuarial profession’s opportunity and responsibility to contribute to the debate on societal problems having actuarial components. While the problems he identified might be narrowly viewed as “SOA issues,” the broader message is that we (SOA, CAS, and the Academy) need to continue to find ways to make our voice heard in those areas where we can assist with the solutions. This was discussed and acknowledged by the CAS Board and is reflected in the last sentence of the statement.
After notifying the SOA of our position, the leaders of the two organizations met on November 30, 2011, to informally discuss ways in which we might be able to collaboratively address the SOA’s concerns. The meeting was intended to allow the CAS to get a better understanding of the issues underlying the proposal for consolidation, to communicate to the SOA the reasons for the CAS Board’s rejection of the proposal, and to determine common ground for solutions, if any.
It is clear from our discussions that the SOA feels strongly that consolidation of some type is a strategic issue, and they intend to pursue it through their task force.
It is also clear that the CAS has a long history of successful collaboration with the SOA and we continue to be involved in many joint initiatives, including:
- Administering Preliminary Actuarial Exams (1-4).
- Encouraging students to consider a career as an actuary, including www.BeAnActuary.org.
- Sponsoring the Joint Risk Management Section, along with the Canadian Institute of Actuaries.
In addition, there are new initiatives in the pipeline relating to:
- Joint discipline.
- Transparency in the discipline process.
- Consideration of a joint exam for the CERA designation.
The CAS Board statement reiterates our strong history of collaboration with the SOA in areas of mutual interest and our support for continued cooperation on these and other potential joint initiatives between our respective organizations.