Earning the ACAS designation is a great accomplishment. Your college education, hundreds of hours of studying, and maybe a little exam luck have earned you a valuable accreditation for work in insurance and other industries.
The question you should now ask yourself is “What does a CAS designation allow me to do?” If you work in the United States, your designation is just one part of a three-part requirement from the American Academy of Actuaries (AAA) U.S. Qualification Standards that allows you to provide a “statement of actuarial opinion.” The U.S. qualification standards applies to all actuaries working in the U.S., even if you are not a member of the AAA.
What is a statement of actuarial opinion? The qualification standards read, “a Statement of Actuarial Opinion (SAO) is an opinion expressed by an actuary in the course of performing Actuarial Services and intended by that actuary to be relied upon by the person or organization to which the opinion is addressed.”
So almost any of your work that is an “opinion in the course of performing Actuarial Services” is a statement of actuarial opinion. For example, if I say “the calendar year loss ratio for 2018 was 67.5%,” I am not rendering an opinion – I am stating a fact. However if I say, “based on my analysis, the projected loss ratio for commercial auto in accident year 2019 will be 69.4%,” or “I think the rating factor for safe drivers should be .80” – I am providing a statement of actuarial opinion, and I am subject to the qualification standards.
What are the three requirements to render an opinion? The first one is “Be a Member of the Academy, a Fellow or Associate of the SOA or the CAS, a Fellow of the CCA, a Member or Fellow of ASPPA, OR a fully qualified member of another IAA-member organization”. Congratulations, you have the first, and most difficult, requirement out of the way.
The second requirement is “Have three years of responsible actuarial experience, which is defined as work that requires knowledge and skill in solving actuarial problems.” Be careful here, if you are successful in passing exams quickly or you graduated college with several exams, you may not meet the three-year actuarial experience requirement even though you have your ACAS, which means you are not yet allowed to provide a statement of actuarial opinion.
This does not mean you cannot do actuarial work, you just need to make sure an actuary that does meet the qualification standards reviews your work and the qualified actuary’s name is included in the actuarial communication. This actuary is the one ultimately responsible for the actuarial opinion. Be sure to communicate with the qualified actuary that they are the one rendering the actuarial opinion, and that you are not fully qualified.
The third requirement is continuing education (CE). New actuaries are sometimes surprised to learn they must meet CE requirement as soon as the obtain their designation. There is no CE grace period for actuaries working in the U.S. This differs from the CAS CE requirements, which do not require you to attest that you have met your CE requirements until the end of the year of designation.
The good news is, you probably have met most of your CE already. General CE requirements are 30 hours a year, with at least six hours being organized and three concentrating on professionalism. If you have been studying for exams and studying the ASOP’s as part of your exam preparation, you probably have the first two covered. You also may have the six hours of organized activity if you recently took the Course on Professionalism or have attended a CAS meeting or regional affiliate meeting in the last year. Be sure that your CE credits are well documented.
Finally, while most CAS actuaries work in the U.S., many of you may do actuarial work in other countries. Almost all countries have some sort of actuarial qualification standard. Make sure before you start doing work in your country you are aware of not only the qualification standards, but also any actuarial standards of practice.
I have just touched on a few parts of the U.S. qualification standards; this blog is not intended to be an all-encompassing review. I encourage all U.S. based actuaries to review the U.S. qualification standards and contact the ABCD at guidance@actuary.org if you have any questions.
I wish this discussion had gone further on the topic. Too many actuaries believe that once they are qualified in some area of P&C work, they are qualified for all areas. But is someone who has spent all their career working on Personal Auto ratemaking then “qualified” to work on US Workers Compensation reserving (and vice versa)? I think not, absent sufficient continuing education (and even then I’d strongly recommend peer review at a minimum). The issue of “Are you qualified?” transcends the attainment of a CAS designation and 3 years of P&C experience.
Ralph – I agree, this blog was just intended to scratch the surface and discuss the minimum standards. I plan to discuss more on the qualification standards in future blogs and publications.