August 2004 Actuarial Review - CAS Board Debates the Status of Associates

CAS Board Debates the Status of Associates

COLORADO SPRINGS, Co.—How many classes of credentialed membership are right for the CAS in the 21st century? If the CAS decided to have only one class of credentialed members, how would the transition occur? Should Associates be granted the right to vote? Should Associates be eligible to serve on the board of directors?

The CAS Board of Directors discussed these questions and others at length during its meeting held on May 16 in conjunction with the 2004 CAS Spring Meeting here. With about a dozen observers in attendance, the board heard reports from the chairs of the Task Force on Classes of Membership and Task Force on the ACAS Vote. The task forces’ reports contained suggestions that, in order to be implemented, would require a vote—by the Fellows only—to make them constitutional amendments. The CAS Constitution may be amended by an affirmative vote of 10 percent of the Fellows or two-thirds of the Fellows voting, whichever is greater.

Sheldon Rosenberg presented the Report on the Task Force on Classes of Membership. The task force was charged with investigating the advantages and disadvantages of having one or more classes of credentialed membership. Also, it was charged with developing a recommendation for the proper qualifications, rights, and responsibilities associated with these classes of membership.

The task force concluded that there should be only one class of credentialed membership, finding that there is only a small educational difference between CAS Fellows and Associates and virtually no practice rights difference in the United States. (The task force worked under the assumption that the Affiliate class of member would remain in place.) A key consideration was that two designations (ACAS and FCAS) that each mean “a fully qualified actuary” is confusing. A second consideration is that the Associate designation connotes lesser standing, even though the ACAS is fully qualified to sign statements of actuarial opinion. The task force learned that the current structure began with the formation of the CAS in 1914, when there was a much clearer distinction between Fellows and Associates. At that time, Fellows were those who were in charge of actuarial, mathematical, or statistical departments of insurance companies, and Associates were those who worked in such departments and desired to study actuarial science. Currently, there is little or no distinction between Fellows and Associates in the ability to perform professional actuarial services in the United States. However, Fellowship is a requirement for most practice rights in Canada and for membership in the Canadian Institute of Actuaries.

The board’s discussion of this issue took into account the various transition options as they apply to current Associates and to candidates on the path to ACAS. Transition options discussed ranged from immediately granting Fellowship to all Associates, (and discontinuing the ACAS designation), through many alternatives all the way to discontinuing the ACAS designation after a transition period (and putting the ACAS into “run-off”).

With one class of credentialed membership, concerns were raised about the potential negative impact on recruiting new candidates, since the time until achievement of a CAS designation would be longer (a student would have to go further than the current Associate designation since there would only be the Fellow designation, going forward). The task force recommended that the ideal number of exams for Fellowship would be eight exams, and that the necessary material could be reorganized to fit into that number of exams.

With so many issues on the table, the board decided to defer action on the report and to release it to the membership for comment.

While the board took no action on the classes of membership, it did take action on the recommendations of the Task Force on the ACAS Vote, following a presentation by Amy Bouska. This task force was charged with investigating the advantages and disadvantages of whether the current Associates should have voting rights, and whether other differences between CAS Fellows and Associates should exist, including differences in dues and in the right to hold high-level positions in the CAS.
Most notably, the task force recognized the lack of true representation within the CAS for Associates, despite the fact that Associates pay full dues. CAS approval of Mutual Recognition has also warranted reconsideration of voting rights, since Fellows who are granted the FCAS designation via Mutual Recognition would have voting rights even though long-time CAS Associates would have no such voting rights.

The board voted on each of the specific recommendations of the task force. Among the changes to CAS governance approved by the board (subject to further approval by the membership—again, only the votes of Fellows—where necessary) are:

That the unrestricted right to vote be given to members either upon attainment of Fellowship or five years after their recognition as Associates, whichever should occur first;

That all voting members be allowed to stand for election to the CAS Board of Directors, with no change in the current size or structure of the board;

That voting Associates be allowed to hold all officer positions with the exception of president, president-elect, and vice president-admissions; and

That one seat be added to the Nominating Committee for an Associate with more than 10 years as a voting member.

Granting voting rights to Associates would require approval of a constitutional amendment by the Fellows. While it is not clear whether the move to one class of credentialed membership will require a constitutional amendment, the board intends to develop a process that will allow thorough discussion and exchange of ideas among the members. The board anticipates that, if a vote on the Task Force on Classes of Membership proposal is required, it will precede the vote on voting rights for Associates.