I’m going to apologize in advance to non-actuarial/non-insurance readers of this blog. This is most likely my only post today, and it’s going to be long and probably pretty boring to non-actuaries.
I wrote almost two weeks ago about a draft of the CRUSAP report on the American actuarial profession having been released (available for download at crusap.net).
I’ve had a chance to read through it and think about it. My (admittedly somewhat irreverent) summary is as follows:
- The public isn’t all that aware of the profession, which is a shame since actuaries are in a perfect position to opine about major matters of public interest (e.g. pension underfunding, Social Security, medicare);
- The profession’s continuing education guidelines are wimpy in the face of change in the insurance and financial services fields;
- The profession’s self-regulation is weak, particularly given a lack of whistle-blower protections and limitations on sharing confidential information that may be used as evidence of an actuary’s relative competence; and
- The profession is over-organized for its size…but the CRUSAP folks recognize that resolving the turf battles to bring the level of professional bureaucracy down to more efficient levels will be incredibly bloodily political and therefore perhaps unresolvable.
It’s that last part that has me thinking. CRUSAP is probably correct that the idea of shedding some of our alphabet soup of professional organizations is so touchy that it’s unrealistic to expect that there will be any improvement, or even much constructive dialogue.
However, as someone who dislikes bureaucracy and inefficiency, the idea of consolidating/distilling our professional organizations does have some appeal to me. And, from my admittedly property-and-casualty centric view, I can’t help but notice that such a reorganization could offer a nice resolution to some of the more heated issues debated in the CAS’s hallowed halls.
If I were king, perhaps this is how I’d restructure the American actuarial landscape:
- Merge the major American actuarial bodies, rolling them up into the American Academy of Actuaries.
- Credentials awarded prior to the great merging would continue to exist, although the granting organizations would cease to exist as independent entities. In other words, FCAS’s would become “FCAS,MAAA”. ACAS’s would become “ACAS,MAAA”. FSA’s would be “FSA,MAAA”, and ASA’s would be “ASA,MAAA”. Fellowship and Associateship would both continue to be sufficient for practice rights domestically. (In other words, probably not much would change for most current actuaries, especially since so many are already both members of the Academy and either the SOA/CAS.)
- After the great merging, two new classes of membership would be created. Students attaining some middle-landmark would be eligible for MAAA. Someone completing exams roughly equivalent to the current 8 exam level in the CAS (or whatever the equivalent is these days over in SOA land) would be eligible to become “Fellow of the American Academy of Actuaries” (FAAA).
(Note that this would have the handy benefit of not inherently devaluing the FSA/FCAS credentials. The new credential provides a way to distinguish within our little guild between the 9+ exam FCAS/FSA fellows and the 8-ish exam FAAA’s, while still retaining the Fellow label to avoid confusing folks out in the real world.)
- At the time of the great merging, I would envision the former-SOA and former-CAS exam systems continuing to exist as discrete entities for a while, although I would hope that eventually some additional areas of overlap on syllabus material could be found. (However, becoming a casualty-focused FAAA should still require something a bit more refined than ‘everything a life actuary has to take except substituting a casualty exam in at the very end’.) It’d be even better if there could be some coordination on exam material with the British Institute/Fellowship of Actuaries.
(I’d also still like to see a transition from self-study exams to internet-based classes, but I appear to be virtually alone in the CAS in thinking that way, and so I won’t beat that dead horse any more.)
- FAAA-ship should convey full membership and practice rights domestically and eligibility for mutual recognition abroad. MAAA-ness plus some term of practical experience (e.g., 5 years) would be sufficient to deserve limited voting rights within the expanded Academy (e.g. suffrage wouldn’t extend to matters concerning eligibility for Fellowship). However, MAAA-ness wouldn’t be sufficient for domestic practice rights.
- I’d beef up the continuing ed requirements, up to the point of perhaps requiring some formal classwork/examwork (but probably not as grueling as the actuarial exams) once every three years, to ensure that credentialed actuaries are staying up on developments in the profession. Given distance-learning technology and the size of the expanded Academy, this should be doable.
There are some issues that I’m aware of with this scheme for which I don’t currently have good answers. For example:
- What about the Canadians? The CAS and SOA are international educational bodies, while today’s AAA is U.S.-focused. Perhaps the Canadian Institute would loosely affiliate with the expanded Academy in a rough approximation to the relationship between the Institute and Faculty in England and Scotland?
- There has been some talk about the possible value of an “actuarial technician” designation, possibly with different training. I think it’s an interesting idea, but it’s not something I’m addressing with my reorganization scheme.
- Today’s CAS is extremely territorial when it comes to its organization and exam system. I think CRUSAP was probably very wise in essentially saying “we need to point this out as a weakness in the profession, but we don’t think a practical resolution is realistically achievable.”
That’s enough rambling for one day. What do you think?