Opinion

What is Wrong with a Comprehensive Exam?

by Howard C. Mahler

In spring 2000, the joint CAS, CIA, SOA Task Force on Academic Relations exposed for discussion the establishment of "a single comprehensive examination option to obtain credit for all of the examinations jointly sponsored by the CAS and the SOA, available to students at accredited actuarial science programs." This proposed comprehensive examination would give credit for joint Exams 1 through 4, and would be an option available to students at "accredited" actuarial science programs at certain universities. This is a terrible idea: unfair, unnecessary, ill conceived, impractical, and a waste of valuable effort.

What problem is this comprehensive exam intended to solve? Presumably the typical student at an "accredited" actuarial program would be passing courses covering the material needed to become an actuary and taking the current separate exams available to everyone. Why would a student in an actuarial program wait until his final year to take a comprehensive exam?

For example, Exam 2 covers theory of interest, economics, and finance. Do the university courses cover the same material as the CAS/SOA syllabus? Is the material covered at the same level of comprehension and with the same emphasis? After taking and passing these courses at the university, wouldn't a typical student at an accredited program take and pass our Exam 2? If not, then clearly something is wrong with the student, the university's actuarial program, the CAS/SOA syllabus, or the CAS/SOA exam. If Exam 2 is difficult for full-time students who have recently passed courses covering this material, wouldn't it be even more difficult for actuarial students who are working full-time and have no university professor to help? If the CAS/SOA exams are too difficult and/or too long, the solution is to reexamine the length and difficulty of our actuarial exams and change them for everyone.

If our current exams and syllabus are driving too many good people away from our profession, then the solution again is to make a change that applies to everyone. The proposed comprehensive exam will not be available to everyone. This is unfair, and it would (rightly) undermine confidence in the CAS/SOA examination process.

Moreover, it is inconceivable to me that the CAS/SOA could maintain any consistent relationship between a comprehensive exam and four separate exams. It is difficult enough to maintain the same length and difficulty level for a single exam from sitting to sitting. Vast amounts of energy would be wasted arguing over which version of the exam was easier. I suspect that the intent is to make it easier to pass the comprehensive exam than the four separate exams. This would just add to the unfairness of this proposal. It would provide an easier route to membership that is not available to everyone.

Presumably, to take advantage of this unfair situation, students would want to gain admission to "accredited" actuarial programs. Those not admitted would feel discouraged, and they would likely refrain from entering our profession. The CAS/SOA should neither encourage nor discourage attendance at particular universities. Rather, if students from an "accredited" actuarial program at XYZ University are more valuable to certain employers, let the market adjust accordingly. Those students will get better and/or more jobs offers, which, in turn, will give other students an incentive to attend XYZ University and take its actuarial program.

Actuarial training is more than an academic program; it is an apprenticeship program. I believe the CAS has benefited from the diversity of its members' backgrounds. While some have majored in actuarial science, most have majored in mathematics, statistics, physics, computer science, or economics. I know fine actuaries who have majored in history or music.

The comprehensive exam would cause very significant testing problems for the exam committees. Currently, Exams 1 through 4 total 15 examination hours. Even with a total of 15 hours, it is a difficult task to test fairly and adequately what is on the current syllabus. The comprehensive exam would be significantly shorter (or why bother to have it in the first place) with fewer questions on each syllabus topic. Therefore, the comprehensive exam will not tell us whether a student has, in fact, learned the material at the desired level of comprehension.

The students would, however, face an awful endurance challenge, assuming that the comprehensive exam must run well over four hours. Exams longer than four hours, even with a break for lunch, put too much emphasis on endurance.

If the comprehensive exam is six hours long (three hours in the morning and three hours in the afternoon), there will be time for only four credibility questions, rather than the normal ten questions. If a student's knowledge of credibility (or any other subject) is spotty, then four questions rather than ten increases the influence of pure luck on the student's ability to answer correctly.

Students might earn a passing score by totally ignoring a topic. For example, economics is currently about 40 percent of Exam 2, so it is extremely difficult to pass Exam 2 knowing absolutely nothing about economics. On the other hand economics would be only about 10 percent of the proposed comprehensive exam. A student could pass the comprehensive exam knowing absolutely nothing about economics.

Economics is one of many important topics that would each account for 10 percent or less of the comprehensive exam. Many students would pass having learned absolutely nothing about one or more of these important topics. The Syllabus must contain inessential material, then, if students need not demonstrate knowledge of it. Drop this material from the Syllabus rather than create a comprehensive exam.

In summary, significant harm would result from the proposed comprehensive exam. We should focus our valuable resources on improving our current Syllabus and exams. In every respect, the proposed comprehensive exam is unfair, unnecessary, ill conceived, and impractical.

Editor's Note: The Actuarial Review encourages the publication of opinion pieces. If you would like to respond to a published opinion or express a new one, please send your article to the CAS Office or send it by e-mail to esmith@casact.org. All submissions should be in electronic format with 500 words or less.