At its August 2012 meeting, the CAS Board of Directors approved the recommendation of the CAS Executive Council and the Education Policy Committee (EPC) that the CAS recognize the exam waivers granted by the Canadian Institute of Actuaries (CIA) for certain CAS preliminary examinations. This action followed the announcement by the CIA of the ten universities that had met the CIA’s requirements under its University Accreditation Program (UAP). Readers are encouraged to refer to the original CAS announcement, as well as embedded links, for a more detailed description of the CIA UAP and the process used by the CAS to consider recognizing CIA examination waivers.
The CAS has received several letters from members expressing a concern that the Board action is inconsistent with the wishes of a majority of CAS members who spoke out on the issue when it was being considered several years ago. The comments below respond to these concerns, and address some apparent misunderstandings of the implications of this Board action.
In reaching its decision to recognize examination waivers granted by the CIA for certain CAS preliminary examinations, the Board considered the following:
- The CAS waiver policy for actuarial examinations states that “Waiver of individual examination requirements will be granted by the CAS Board of Directors in instances where an applicant has passed or received credit for examinations sponsored by another recognized actuarial organization that cover equivalent material in both subject and depth.” For many years, the CAS has recognized some of the examinations sponsored by the Institute and Faculty of Actuaries (United Kingdom), Actuaries Institute (Australia), and the Institute of Actuaries of India. The policy goes on to state that “Credit will be granted for examinations passed or waived in accordance with examination equivalencies between the CAS Syllabus and the syllabi of each of the three aforementioned actuarial organizations.” (Emphasis added).
- In recognition of the existing CAS waiver policy for actuarial examinations, in May 2010, the CAS Board approved a resolution that would allow the CAS to grant waivers for CAS exams to those who would have been granted exam credit through the Canadian Institute of Actuaries (CIA), subject to review and recommendation by the CAS Education Policy Committee (EPC) and approval by the Executive Council (EC). At that time, the CAS Board noted that these CIA waivers, if granted, would be similar to the waivers currently granted for examinations of the Institute and Faculty of Actuaries (U.K.), the Actuaries Institute (Australia) and the Institute of Actuaries of India.
- Consistent with the 2010 Board resolution, the EPC was asked to evaluate whether credit granted by the CIA for examinations passed or waived was in accordance with the examination equivalencies of the CAS Syllabus. The EPC concluded “that the Canadian Institute of Actuaries University Accreditation Program waiver process would meet the requirements to grant waivers for CAS exams.”
- The most recent Board action did not encompass a reexamination of the CAS waiver policy for actuarial examinations. Rather, it affirmed that the recognition by the CAS of exemptions granted by the CIA UAP was consistent with the spirit of the CAS examination waiver policy as already applied to the Institute and Faculty of Actuaries, the Actuaries Institute (Australia) and the Institute of Actuaries of India.
- Requirements established by the CIA for its UAP accreditation are rigorous. Not all universities that applied for accreditation were approved, and not all students successfully completing the identified courses at approved universities will be eligible to apply for the exemption. The CAS identified a liaison representative, who provided periodic comments and suggestions to the CIA in the design and development of UAP. The main criteria for accrediting universities can be found on the CIA’s website.
Specific features of the process that led the EPC to its conclusion are:
– Coverage of CAS/SOA syllabus. At least 85% of the actuarial syllabus must be directly covered in the course(s) being used for each exam.
– Accreditation Actuary (AcA). Each school must designate a CIA member with a Fellowship designation and at least five years of experience as the AcA. The AcA (who is employed by the university) is responsible for working with the CIA to ensure standards are being maintained.
– Grades. For each course or group of courses offered, the CIA has established a minimum passing grade for accreditation (if there are several courses mapped to an exam, the student must achieve the minimum grade in all courses). The grades vary by university, and were established based on an evaluation of historical performance of students who took the actuarial exams after completing the corresponding course(s).
– Grade inflation. The EPC asked specifically for information on grade inflation. There are a number of guidelines in place to guard against and monitor grade inflation. The AcA is responsible for reporting any issues that may negatively affect the quality of the program, including grade inflation. The CIA will review the minimum grade for exemptions on an annual basis.
– Testing. Each course required for exemption must have 80% of the final grade coming from examination. The number of hours of examination must exceed the number of hours on the corresponding CAS/SOA exam.Exemptions considered by the CIA apply only to preliminary CAS Exams 2, 3L, 3F and 4. Canadian candidates who apply for and are granted waivers will still need to successfully complete CAS Exams 1, 5 and 6, as well as the CAS Course on Professionalism to be eligible for CAS membership.
- The CAS recognition of examination waivers granted by the CIA applies only to credits earned at accredited Canadian universities. The CAS Board action specifically notes that these waivers will not be extended to universities in the U.S.
- The CAS decision to decline to participate in the University Accreditation Program in 2010 was based, in large part, on the number and diversity of universities in the U.S. The resources required to evaluate, accredit and monitor all universities that would likely apply for accreditation in the U.S. would clearly have been significant. In addition, unlike the situation in Canada in which the academic community supported the accreditation process, the response from academics in the U.S. was, in some instances, strongly negative because of the impact that the requirements would have had on their teaching methods and course materials.
- The demographics of the CAS community in Canada differ in several ways from the demographics of the U.S. CAS community. Most CAS Canadian members have graduated from one of the CIA accredited universities with degrees in actuarial science; many have passed several preliminary examinations before their first work experience. In contrast, U.S. members come from a wide array of universities and colleges, with degrees in a broad array of subjects. Perhaps because of the concentration of Canadian candidates from actuarial science programs, Canadian candidates have historically performed better on CAS preliminary examinations than their corresponding U.S. cohorts, as measured by exam passing grades.
CAS leadership is aware that there are members who are strongly opposed to the concept of exam waivers. Some members have expressed the concern that the recent Board action undermines the integrity of the CAS credential and is a way to “open the door” for alternative routes to CAS membership. In reaching its decision regarding recognition of CIA exam waivers, the CAS Board concluded that, because of the rigorous process followed by the CIA in accreditation of universities and courses including ongoing supervision of approved universities by the CIA, CAS recognition of examination waivers granted by the CIA in no way endangers the quality of the CAS education process or the value of the CAS credentials.
We welcome your comments on this issue.
Firstly, I would like to thank you, Pat, for taking the time to respond in detail to many of our concerns. While many of us are still in disagreement with the decision, having leadership respond to the complaints and explain, in detail, many of the decisions helps, at least as regards myself personally, to allay fears of leadership ignoring the members and ruling by fiat, as it were.
As regards some of the specific points mentioned, I appreciate the distinction made between US universities and Canadian ones, both in terms of numbers, oversight, and variety. I understand we already have agreements in place, over and above mutual recognition, to allow credit to be transferred between other societies’ specific exams and CAS exams. For example, credit for FIA CT1 is equivalent to credit for Exam 2. Part of this arrangement is that we are not differentiating when foreign associations give their credit based on an exam or based on classroom work. I understand that it would be difficult for us to make that differentiation right now.
However, it concerns me that now, for the first time, we have a direct link between classroom attendance and a CAS exam exemption. The CIA and CAS share exams; we can no longer say that we are creating an equivalence between exams of different societies and not intruding on how the foreign society gives credit. Instead, we are saying that there is an explicit relationship between certain coursework and CAS exams, which, in my opinion, is a significant change, and opens up future equivalences, which are subject to the long-standing debate in the membership as to the efficacy and ability of individual classroom work to substitute for standardized examinations.
Avrahim: I appreciate the continued dialogue. In my mind, there is not a direct link, under the CIA UAP, between classroom attendance and the CAS exam exemption. Not all students (even successful students) attending a class will be eligible for waivers. The requirements of the CIA for its universities (at least 80% of the final grade must be achieved through examination), and for its students (a passing grade set at a level higher than that achieved by candidates who successfully completed the CAS exams) are distinctions that I believe ensure the continued integrity and high quality of our candidates (and ultimately, our members).
Even with 80% of the grade being based on a final and a B- grade being required, there is still a problem introduced due to the same person teaching the class also being the one to write the final. This is a different situation than taking a test written by a stranger (such as on an actuarial exam). In a classroom setting, the questions on a final are generally very similar to questions students have seen on their homework. They may even be the same exact questions as given on the homework with only the numbers changed. Students can pass these types of tests just by memorizing how to solve previously seen types of questions. In contrast, actuarial exams present problems to a student that he has never seen before. This challenges the student since he can no longer rely on rote memorization and must demonstrate a deeper understanding of the mathematical principles at hand to solve the problem.
I don’t think the required grade is a B-. If I remember correctly from my reading, the required grade varies (above an 80 to 90, possibly 75 for the FM waiver but I think it was 80), so it’s more like an A- to get the waiver. And I believe they need to achieve that grade in each of the required courses (at the University of Waterloo, I think you need a 90 in each of 3 courses to get a waiver for exam C/4). That’s just my memory though, I’m not certain.
If you took every student that was eligible for an exemption from this program and had them sit for the same actuarial exam which they just received an exemption for, would 100% of them pass the actuarial exam? If the answer to this question is no, then exemptions should not be given.
There appears to be a great risk of admitting unqualified candidates and I don’t see what the great offsetting benefit is to our society. If the classes are so rigorous, why don’t we just have them take the actuarial exam to prove their knowledge? We could begin to schedule preliminary exams around the same time that finals occur in college. Instead of students taking a final in class, they could take their final as an actuarial exam. The university could pay for their exam fee through the student’s tuition. We could offer bulk discounts to universities for this. This would protect the integrity of the exam system while also catering to the schedule of university classes. If the classes are as rigorous as claimed, then the students should have no problem sitting for an exam to receive credit for it.
Firstly, I’ll point out that I don’t really support the exam waiver. That being said, I just want to say this comment is unfair (“If you took every student that was eligible for an exemption from this program and had them sit for the same actuarial exam which they just received an exemption for, would 100% of them pass the actuarial exam? If the answer to this question is no, then exemptions should not be given.”).
It’s unfair because consider this, would 100% of the students who pass each sitting of the preliminary exams pass the same exam in the next sitting? I can guarantee you this is not the case, especially since I know of many individuals that have failed the same exam 1, 2, 3 or even 4 times before they finally pass it. Since the actual exams are multiple choice, if someone only ever knows less material than would be needed to pass, given enough attempts they’ll guess enough of the other material correctly to get a pass. With regards to the University waiver, the student gets 1 chance and 1 chance only. If they have a good day and perform admirably at a level where the same type of performance on an exam would warrant a pass, then they deserve the waiver as much as an individual who passes an exam on their third try and manages to successfully guess enough of the questions they don’t know correctly.
My only concerns with the program are:
Teachers typically cover most examples they test on. It removes the effect of the SoA/CAS exams having unexpected content.
Typically if averages are too low, professors curve marks or give more generous part marks for questions in order to increase the average. This shouldn’t be permitted whatsoever for the classes being given a waiver.
What percentage of new students are CIA out of the CAS+CIA total? If this is a small number (<5%) and the Board means what it says about the US accreditation program never happening, then I am ok with this. Otherwise, I am not.
Be certain though, that adverse selection will cause more and more candidates who wish to enter the actuarial field to attend Canadian universities with the understanding that the newly approved path is an easier way to bypass the preliminary exams.
I have to agree with Michael that the best way to implement this program would be to ask the universities to offer the SOA/CAS exam as the final exam, especially noting that the preliminary exams are already offered via Prometric. If the class is as rigorous as claimed, I am sure that the candidates will have no issues obtaining a passing grade.
I’m not sure how many Canadian actuaries are in the CAS, but we can guesstimate by looking at the number of students sitting for exams 6U (United States Regulation Exam) versus exam 6C (Canada Regulation Exam). In October 2011, 1002 students sat for 6U and 155 sat for 6C. So 13.4% (155/1157) of the students in that sitting were Canadian / practicing in Canada.
Is there a reason something this significant doesn’t go to a membership vote?