MR Fears Validated
Dear Editor:
The announcement of the mutual recognition (MR) agreement recently signed with the U.K. Faculty and Institute of Actuaries ("Mutual Recognition-At Long Last," AR May 2005) confirms my fears about MR, validates my decision to oppose the CAS constitutional change, and reveals that I was correct in characterizing the issue as one of international trade economics rather than professional reciprocity.

...the current international societies insist on a playing field that is not level. Alas, the CAS has once again gone out of its way to accommodate them. — John W. Rollins

Careful reading of the announcement shows that an FCAS desiring an FFA/FIA must, in particular, obtain "recent practical experience, one year of which was in the U.K. or Ireland" (emphasis mine), while an FFA/FIA desiring an FCAS need not obtain any work experience outside the U.K. Assuming an equivalent marginal value for U.K. and U.S. home country designations when working in the country, this has the market effect of allowing an influx of new FCAS from FFA/FIA professionals with no U.S. experience, while restricting the supply of prospective new FFA/FIA from current FCAS with no U.K. experience.

Why? It will be difficult for CAS Fellows who don't possess the FFA/FIA to find quality work in the U.K.-they are at a competitive disadvantage in the U.K. without it, but they can't obtain it without working there. In contrast, FFA/FIA wishing to make a grand entrance to the U.S. market must merely complete some paperwork and register for a course on professionalism(COP). (Even the COP may conceivably be offered internationally.) Everyone has heard the Catch-22 of employment stated as "you can't get experience without a job, but you can't get a job without experience." As with the Canadian FCIA requirements of work experience in Canada, the current international societies insist on a playing field that is not level. Alas, the CAS has once again gone out of its way to accommodate them. Axiomatically, this will diminish the relative value of the FCAS designation in our global marketplace over time.
John W. Rollins, FCAS, MAAA

The purpose of the confidentiality requirement is to keep information from competitors. — Oakley E. (Lee) Van Slyke

Confidential For A Reason
Dear Editor:
Charles L. McClenahan asks the wrong question when he asks, "What is it in the Actuarial Report, or in the Actuarial Opinion Summary to be added with the 2005 opinion, that is appropriate for management and regulators to see, but not for shareholders, policyholders, or claimants?" ("Random Sampler," AR May 2005). Those are not the parties for which confidentiality of proprietary information is an issue. The purpose of the confidentiality requirement is to keep information from competitors. Any Actuarial Report worthy of the name will include a discussion of why the data and financial numbers are the way they are. That explanation discloses the nature of the competitive advantage of the risk-assuming enterprise. For the commercial insurance company, this competitive advantage lies in both underwriting and claims handling. Confidentiality is even more of an issue for captive insurance companies because the why often reflects the competitive advantage of the parent company in its marketplace.
Oakley E. (Lee) Van Slyke, FCAS

Classes of Membership Redux
Dear Editor:
While reading the story on the Report of the Task Force on Class of Membership ("Board Discussion on Classes of Membership Continues," AR November 2004), I noted that the main argument against eliminating the Associate designation was the indignation of some Fellows who believed they worked harder. They make an excellent point. Let's carry that thought to its conclusion. How many Fellows out there have not passed all the exams on the 2005 syllabus? Exactly! Therefore, I propose that the CAS start from scratch and require everyone, including all current Fellows, to qualify under the existing syllabus. Ok, not really, but think about that when discussing the fairness of turning Associates into Fellows. Most of us have had different, but challenging, mountains to climb. The inclusion of actual work experience is long overdue.
Alan R. Clark, ACAS

Kudos for Puzzles
Dear Editor:
I would like to submit an answer for the May 2005 "It's A Puzzlement." It is simply 12 as 2+1+3+6=12. This is not elegant as there is not much to explain. But I would like to add that this problem was very funny. It is just so amazingly built to direct everything toward 15. As for most problems in life, there is always a solution that is obvious, easy, quick and...false. But when you open your mind a little, the real solution is just as easy.

I would like to take this opportunity to thank those who are in charge of finding these puzzles. The selection is always interesting. I rarely take the time to send you an answer, but I really wanted to let you know that I appreciate your puzzles and it is always the first thing I look for in The Actuarial Review.
Jean-Denis Roy, FCAS