Exams 3 and 4 To Be Modified

by Marty Adler

Arlington, VA—Responding to criticism and poor results for the jointly administered Exams 3 and 4, the CAS and SOA have implemented changes that significantly reduce the amount of material covered on the exams. The changes will take effect for the Spring 2001 exam sitting. The two organizations issued a joint statement announcing the change on December 21, 2000. On the same day, the CAS Task Force on Exams 3 and 4 also posted their report, which led to the changes, to the CAS Web Site.

Early last year the CAS Board of Directors appointed the task force and charged it with evaluating the appropriateness of both the learning objectives, especially for casualty actuaries, and the teaching materials. Chaired by Howard Mahler, task force members included Fellows who are past and current members of the Syllabus or Examination Committees, Fellows in academia, and a Society of Actuaries liaison.

The task force reached five conclusions:

Some action should be taken because a significant number of CAS candidates fared poorly on the Spring 2000 Exams 3 and 4. While the results may be attributed to the newness of the exams, the Task Force did not expect sufficient improvement in exam results.

A significant number of learning objectives are beyond the needs of casualty actuaries, particularly on Exam 3.

An excessive amount of material is contained on both exams, especially Exam 3.

Much of the current readings should be replaced; the overall presentation of the study materials should be more practical and actuarial, and less theoretical. Until new study notes are available, Exams 3 and 4 should be published for their educational value.

Current exams appear to be much more difficult for those now working than for those in college. The most significant of the factors contributing to the difficulty are the current readings. Although the task force did not study whether the difficulty is new with respect to joint exams, it was not a problem on the old CAS Parts 3B, 4A, 4B, 5A, and 5B exams.

The task force recommended:

1. Carefully monitoring the examination results for CAS candidates on joint exams and the number of such candidates in the near future.
2. Cutting a significant amount of material from the current syllabus. Removing some learning objectives and reducing the level of detail and comprehension required by some of the remaining objectives would accomplish this.
3. Replacing many current readings as soon as practical. Provide funding for commissioned study notes.
4. Continuing to release Exams 3 and 4 for the next few years.

Joint Sponsorship

While the task force had no specific recommendations with respect to joint sponsorship of Exams 3 and 4, they noted that the CAS must consider the potential impact on joint sponsorship in implementing any of the task force recommendations. Joint sponsorship has advantages; compromises may be necessary in order to retain joint sponsorship of Exams 3 and 4. The task force considered a number of possible frameworks for implementation. The options with substantial support among task force members, in order of such support, were:

Keep joint sponsorship of both exams; fix what we have.

Have one joint exam and one CAS-specific exam.

Rearrange the current material into two jointly sponsored exams.

The options with little support were:

Replace both exams with two CAS-specific exams.

Have one basic exam. Spread the remaining material across other exams, keeping nine exams in total.

Negotiate joint exams with the Institute of Actuaries.