Membership Requirements: U.S. Versus Canada
Exams 7 and 8 have alternatives: the U.S. specific exams, 7 (U.S.) and 8 (U.S.), or the Canadian specific exams, 7 (Can) or 8 (Can). A student who passes the U.S. specific exams (in addition to all the other parts) becomes an FCAS; but a student who passes the Canadian specific exams instead of the U.S. specific exams (and completes 18 months of Canadian specific experience) gets one more designation - in addition to becoming an FCAS, they become an FCIA (Fellow of the Canadian Institute of Actuaries).
An FCAS who passes the U.S. specific exams cannot get their FCIA status even if they move to Canada and work for many years. They must pass the Canadian specific exams. But an FCAS/FCIA can move to the U.S. and practice his profession and sign important reserve opinions, although he has not mastered the vital areas of U.S. accounting and U.S. regulations. This is not equitable.
The position taken by the CIA is laudable and sound. The position of the CAS is not sound, in that it puts its members in a disadvantageous position.
This can lead to inequities and games played by smart students:
- Students may decide (I know of one who has) to take the Canadian specific exams even though they have never lived or worked in Canada. They may do this "just in case" they decide to move to Canada in the future.
- An FSA/FCIA studying to become a property/casualty actuary could take the U.S. specific exams rather than the Canadian specific exams, if for some reason he thought they would be easier, even if he never worked in the U.S. and never intended to. (There is a rumour that an FSA/FCIA is doing this.)
I suggest four alternative solutions:
- Grant the FCAS designation only to those students who pass the U.S. specific exams, and only issue transcripts to other candidates, so that they can be granted the FCIA designation by the CIA. (This is my preference.)
- Persuade the American Academy of Actuaries and the insurance regulatory authorities to specify that only those actuaries with the U.S. specific exams are qualified to render any actuarial opinion regarding U.S. insurance companies.
- Break each of the exams 7 and 8 into a general subpart (for which all candidates would be graded together) and a country specific subpart. Then grant FCAS or FCIA designations depending on which subparts were passed. An FCAS would be permitted to take the Canadian specific exams at a later date, to become an FCIA (assuming an appropriate experience requirement, also); similarly, an FCIA would be able to take the U.S. specific exams at a later date to become an FCAS (assuming an appropriate experience requirement, also).
- Use Alternative 1 shown above, but also allow an FCIA to become an FCAS if the actuary has demonstrated five years of U.S. experience in a responsible position, as certified by another FCAS. Similarly, allow an FCAS to become an FCIA if the actuary has demonstrated five years of Canadian experience in a responsible position, as certified by another FCIA.
This approach is more humane, plus it will bring the two societies together under one umbrella and will eliminate the inequity that currently exists.
I am willing to present my views in any CAS forum or committee. Let me hear from you if you think I have a point or if you don't agree with me [(770) 951-2782].
Sri Ramanujam, FCAS, FCIA