Important Changes to Exams 1-4 Due in '05by Dana R. Frantz, CAS Candidate Liaison Committee
Starting in 2005, significant changes to Exams 1-4 will be effective. These are the changes to preliminary education that the CAS approved earlier this year. The biggest difference is the movement of some topics off the exams to a Validation by Educational Experience (VEE) process. The new structure will consist of three topics requiring VEE and four exams. A summary of the transition from the current structure to the new structure is summarized in Table 1.
Changes to Exams 1-4 will be as follows. For Exam 1, direct testing of Calculus will be removed, and the material will be narrowed to Probability only. Calculus is now a prerequisite and will be indirectly tested through Probability questions on Exam 1. After the Spring 2005 sitting, this three-hour exam will be offered by computer-based testing.
The subjects of Economics and Corporate Finance that are tested on the current Exam 2 will fall under the VEE category rather than being tested on this exam. Exam 2 will then be limited to Financial Mathematics (Interest Theory).
The only change to Exam 3 will be the addition of statistics. Applied Statistical Methods (time series and regression) will be taken off the current Exam 4 and moved to the VEE category. This should move the focus away from memorizing formulas for Exam 4 and towards analyzing data.
Exams 1, 2, and 4 will remain joint exams with the SOA, and Exam 3 will remain a CAS-only exam. Syllabi for new Exams 1-4 are located in the 2005 Preliminary Examination Syllabus.
Validation by Educational Experience can be satisfied in one of four ways:
1. College Course(s)
Earn a B- or better on college or university courses approved by the CAS/CIA/SOA. A list of approved courses will be available online. Course instructors and/or candidates will be able to submit course information for approval.
2. Standardized Exams
Achieve a pre-set score on standardized exams such as Advanced Placement (AP) exams. The VEE Administration Committee (VEEAC) will determine which other examinations qualify and the score required for credit.
3. Transitional VEE Exams
Pass a CAS transitional VEE exam. In August 2005, 90-minute exams for VEE-Economics, VEE-Corporate Finance, and VEE-Applied Statistical Methods will be offered. The CAS will also offer the transitional VEE exams in 2006, at which time the CAS will reevaluate whether there is a need to continue the transitional exams.
4. Other Educational Experiences
Online courses, intensive seminars, and other options are expected to become available in the future.
In order to reduce administrative cost, candidates will not be allowed to submit their VEE evidence until after they have passed two exams. However, there will be no time limit on when VEE experiences were completed. Details on the process to obtain VEE and the syllabi for the three transitional VEE exams can be found in the Latest Admissions News section.
Table 2 shows how the transition rules will apply to the revised preliminary education structure.
Table 3 shows how the transition rules will also apply for candidates with unused credit from exams administered prior to 2000.
Practical Considerations for Employers and their Candidates
With these significant changes just around the corner, employers will want to consider how these changes affect their Actuarial Candidate programs. Some of the issues that were discussed at a recent Candidate Liaison Committee teleconference included:
- Study Time
The length of some of the CAS exams will be shorter than the current standard of four hours. Most notably, Exam 2 will be a two-hour exam. Should candidates now be allotted less work-study time for this exam compared to the other four-hour exams? Also, will those candidates who opt to obtain VEE credit through the transitional VEE exams be allowed study time at work? And if so, how much time should they get? Other exams will be affected as well. With Exam 1 eventually becoming a computer exam being offered multiple times throughout the year, employers may need to change their study programs to accommodate this.
- Exam Raises
Will the schedule for raises need to be modified now that candidates must have credit for both exams and VEE requirements? Will a candidate receive an exam raise for obtaining VEE credit? It seems logical that a raise would be given for passing one of the transitional VEE exams, but how will it work when credit is obtained through college courses? Will there be raises for completing online courses or intensive seminars? With some of these processes being offered throughout the year, rather than just in May and November, will employers be able to give "exam" raises off-cycle?
- Costs of Candidates Satisfying VEE Requirements
Some candidates will be satisfying these requirements through seminars or online courses, which will likely have varying costs. Will these costs be paid in the same way as regular exam costs or any other educational support currently offered to employees?
Employers should stay current on all of these exam changes and communicate to their candidates. Further details about the new exams and VEE can be found in the "Admissions" section.
CAS candidates may contact universities and request that relevant courses be submitted to the VEE Administration Committee for approval. Candidates may begin to submit requests for course approval and for individual VEE credit in January 2005.