CAS Considers Mutual Recognition Proposals

Task Force Solicits Member Input
by Mary Frances Miller

As actuaries become more and more mobile, nation-specific education systems are beginning to create barriers to practice. A Fellow in one country may not be recognized as qualified to practice in another jurisdiction. A proposal for "Mutual Recognition" of Fellowship has therefore been proposed by the Institute of Actuaries in Australia and adopted in principle by the Institute of Actuaries (U.K.). If adopted, it would mean a series of bilateral agreements among various actuarial organizations that a Fellow from one could become a Fellow in another organization after some period of residency and the local professionalism course plus possibly some local law/regulation course or exam. At least right now, only the English-speaking, exam-giving organizations are asked to participate. The proposal as applied to the CAS would apply only to actuaries with a "general insurance" specialty, not all Fellows of other organizations.

The CAS has created the Task Force on Mutual Recognition to look at the issue. We have noted that, in the U.S. and Canada, there are already few barriers to practice because the American Academy of Actuaries and the Canadian Institute of Actuaries set qualification standards, not the CAS or the Society of Actuaries. To practice in property/casualty areas, an actuary needs to meet the qualification standards of the CIA or AAA, which do not require CAS membership.

Why, then, should we consider mutual recognition? First, the mutual recognition proposal works in both directions. There are some barriers to practice for CAS Fellows outside North America. If we would like our own Fellows to be recognized as qualified to practice, we may need to acknowledge others' qualifications as well. Second, as free trade agreements are adopted in wider areas, we may find ourselves required to recognize the credentials of our foreign colleagues. We should consider whether we want to adopt a mutual recognition strategy or have one imposed on us. Third, it appears that the SOA is leaning toward adopting mutual recognition. The next issue of the Actuary will contain an article advocating mutual recognition and requesting feedback from the SOA membership. If the SOA adopts the concept, the CAS may find itself isolated from the rest of the English-speaking actuarial community.

There are reasons to be cautious in our approach, as well. CAS credentials are recognized in many parts the world besides North America. We do not want to water down the admissions requirements or cheapen the credential in any way. The Education Policy Committee (EPC) is charged with recommending waiver policies for actuaries educated in other systems. Under the current system, FIAs (general insurance) are given Parts 1-5 if they decide they want to work toward CAS membership. Both the CAS and the Institute/Faculty have made major syllabus changes, however, and our current waiver policies are not up to date. The new Institute syllabus apparently has significantly more depth in property/casualty topics than the old one, so there is a possibility that the EPC will recommend that more credit be given, possibly as much as seven or eight exams. The task force has therefore decided to wait until the EPC has completed a detailed comparison of the syllabus materials and made its recommendations, sometime this fall.

Once the EPC is done, the task force will meet to make a recommendation on the mutual recognition issue. I believe that our cautious approach is in the best interests of the membership. We don't want to appear uncooperative and possibly put our own members at a disadvantage outside North America, but we also don't want to make a recommendation that we would later regret.

In the meantime, the task force would welcome feedback from the membership. What are your experiences working outside the United States and Canada? Have you had the opportunity to work closely with general insurance actuaries from other countries? Where do you see the CAS within the international actuarial community five or ten years from now? You can respond taking completing the Mutual Recognition of Credentials Survey or by e-mail or mail to the CAS Office. Members can also contact me directly at maryfrances.miller@selectactuarial.com or Select Actuarial Services, 700 Craighead Street, Suite 303, Nashville, Tennessee 37204-2254.