What Is Independence?
by Mavis A. Walters
"The CAS has historically placed great value on its identity and organizational independence and on its success in educating casualty actuaries" - CAS Strategic Plan
In today's increasingly interdependent world we should ask ourselves the question, "What does independence mean?" The CAS Board of Directors recognizes that independence does not require severing all relationships and joint activities with other actuarial organizations. In fact, the strategic plan says that the CAS "should become or remain involved with joint activities or cooperative efforts, including exams with other organizations." The plan also outlines the criteria that should guide the CAS Board in addressing cooperative activities for the good of the CAS and the actuarial profession.
The May editorial of the Actuarial Review cast an extremely negative shadow over some recent attempts at cooperative activities and attacked the professionalism and the leaders of the Society of Actuaries. While the editorial reflects the opinion of the editor, the editorial reflects neither my view nor, I am confident, that of the CAS Board of Directors.
I believe that independence with respect to the education and examination process means being guided by what should be the core competencies of casualty actuaries. The CAS has much to gain by jointly sponsoring early associateship exams with the SOA. But joint sponsorship works only if both the CAS and SOA want to test the same material and concepts with the same level of intensity. While our new exam structure for the year 2000 contemplates joint sponsorship of only two exams, we may, if appropriate, be able to move beyond that in future years.
Independence also means being responsible for our own governance, with casualty actuaries exclusively as officers and Board members of our own organization. Previous ecumenical discussions about reorganizing the profession into one actuarial body with several practice area specialties have been received with a dull thud and while those proposals resurface periodically, they certainly do not constitute a threat to the continued viability of the CAS.
Independence means having publications dedicated solely to casualty topics of interest to casualty actuaries. But that is not to say that the publication of papers on property/casualty topics in other scientific journals is a violation of the principle of independence. So long as those articles are written by competent casualty actuaries, then our reputation can only be enhanced by a wider exposure of our expertise to the broader scientific community. I do not believe that our Proceedings or the CAS are harmed by having articles on casualty actuarial topics published in any other journal, be it the ASTIN Bulletin, The Journal of Risk and Insurance, or the North American Actuarial Journal.
It is my strongly held belief that the CAS has no need to fear any other actuarial organization. Our members are not naive or innocent hogs waiting to be led to the slaughter. CAS members are strong, intelligent, highly respected professionals whose loyalty and dedication to the CAS are the envy of other professional organizations.
Notwithstanding the fact that some recent SOA activities have left an impression that is troubling to the CAS, I am highly confident that there is no secret scheme or grand design on the part of the SOA or any other organization to "take over" the CAS or to "graduate casualty actuaries." The actions that the CAS has found offensive have a benign explanation when viewed from a different perspective. Nevertheless, my confidence is not based solely on the credible assurances given to us by the president and president-elect of the SOA.
Rather, my confidence stems from the recognition that employers of actuaries are sophisticated buyers who cannot easily be fooled into believing they are buying an expert, if that expert had only a superficial survey course on casualty topics. In addition, the insurance regulatory community has become highly sophisticated with separate life and property/casualty actuarial task forces providing advice to the National Association of Insurance Commissioners. The distinction between these two practice areas is not going to be obscured by some fast-talking lobbyist.
If there is a challenge to casualty actuaries and the CAS, that challenge does not come from other actuarial organizations. Rather, it is likely to come from other professions such as economists, accountants, financial analysts, and others who may not recognize the distinct and unique contribution that actuaries can make in wider practice areas. These professionals, whose numbers dwarf the entire actuarial community, may pose a threat to the extension of actuarial practice into emerging areas where our particular skills could be very useful but may not be welcome.
I believe that the CAS is an unusually strong organization because it reflects the strength and dedication of its members. As long as those strengths exist, no one can take anything away from us. Long live the CAS!