20121018 How Can I Meet the Continuing Education Requirements
1. How Can I Meet the
Continuing Education Requirements?
AAA, SOA, CAS, JBEA
Alberto Dominguez
October 18, 2012
2. Why are you here?
To earn 1 unit of AAA Professionalism continuing education credit
To learn about four distinct continuing education requirements
American Academy of Actuaries General Qualification Standard
Society of Actuaries Continuing Professional Development Requirement
Casualty Actuarial Society Continuing Education Requirement
Joint Board for the Enrollment of Actuaries Continuing Education
Requirement
To get answers to some common questions about the AAA, SOA, CAS
and JBEA requirements
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3. Why am I here?
Member of the SOA Professional Development Committee (2009-2011)
Discussed rules with folks who worked on drafting the continuing
education requirements documents
Participated in presentations that introduced the SOA CPD requirement
at the SOA Annual Meetings in 2009 and 2010
Quotes are from the relevant documents; everything else should be
considered my personal opinion
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4. American Academy of Actuaries
Qualification Standards for Actuaries
Issuing Statements of Actuarial Opinion in the United States
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5. What is the AAA General Qualification Standard?
http://dev.actuary.org/files/qualifation_standards.pdf
Effective January 1, 2008, for opinions issued on or after January 1,
2009
Applies to all actuaries ―who issue Statements of Actuarial Opinion‖
much broader than previous concept of Prescribed Statement of
Actuarial Opinion
All members of any of the five US-based actuarial organizations
Even if not a MAAA
Applies to most actuaries practicing in the U.S.
Actuary must meet ―Basic Education and Experience Requirement‖
Actuary must meet ―Continuing Education Requirement‖
Meeting standard is necessary but not sufficient Actuary must make
the determination that he/she is qualified based on experience and
education (Code of Conduct Precept 2)
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6. How is “Statement of Actuarial Opinion” (SAO) defined?
―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‖
―Based upon actuarial considerations‖ and contains ―advice,
recommendations, findings, or opinions‖
SAO must ―include an appropriate acknowledgment‖ that the actuary
meets the Qualification Standard
Need not be in every SAO if client has knowledge of qualification through
totality of communications (ASOP 41)
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7. What constitutes a Statement of Actuarial Opinion?
Includes
Any actuarial opinion (written or oral) made by an actuary to a client (internal or
external) in the course of an assignment
Drafts sent to the client unless the draft clearly states that the draft is not to be
relied on
Such a draft might still be considered a SAO if
— There is a reasonable likelihood that the recipient will rely on it regardless of intent
— It never becomes finalized and the client ends up relying on it
Does not include
Communications between actuaries working on an assignment
Drafts not sent to the client
Communications to the client lacking an actuarial opinion, recommendation or
finding (e.g., factual information about a data file)
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8. What is the Basic Education & Experience Requirement?
Be a credentialed actuary
Have three years of responsible actuarial experience
Meet practice area requirement
FSA/FCAS with fellowship exams in practice area
FSA/FCAS with 1 year supervised experience in practice area (if fellowship
exams in different practice area)
ASA/ACAS with 3 years supervised experience in practice area
For the pension practice area, EA
Be knowledgeable about the law applicable to the SAO
Be knowledgeable about the ASOPs applicable to the SAO
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9. What is the AAA Continuing Education Requirement?
30 ―relevant‖ credits in the calendar year prior to the year in which a
SAO is being issued
Shortfall can be made up in the current year prior to issuing any SAO but will
not count towards CE credits for that year
Excess credits can be carried over for one year
1 credit = 50 minutes
At least 6 credits must be from ―organized‖ activities
At least 3 credits must be on ―professionalism‖
Maximum of 3 credits on general business skills and consulting topics
Client relationship management, presentation skills, communication skills,
project management, personnel management
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10. What does “relevant” mean?
―Broadens or deepens an actuary’s understanding of one or more
aspects of the work an actuary does‖
―Expands an actuary’s knowledge of practice in related disciplines that
bear directly on an actuary’s work‖
Computer skills and statistics would generally be considered relevant
Law, investments, accounting, economics that bear directly on your work
might be considered relevant rather than general business skills
―Facilitates an actuary’s entry into a new area of practice‖
―Ultimately, it is an actuary’s responsibility to make a reasonable, good-
faith determination of what continuing education opportunities will
enhance the actuary’s ability to practice in a desired field.‖
AAA website: ―you learned something‖ or ―you had the intent to learn
something‖ or ―you were confirming your existing understanding‖
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11. What does “organized” mean?
Must involve interaction with actuaries or other professionals working
for a different organization
Must be directly relevant to area of practice of SAO
Can consist of conferences, seminars, webcasts, in-person or online
courses, committee work
In-house meetings can satisfy this requirement by using outside
speakers
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12. What does “professionalism” include?
Studying Code of Professional Conduct or Actuarial Standards of
Practice
Commenting on ASOP exposure drafts
Business ethics would probably be considered professionalism rather
than ―general business skills‖
Learning about qualification standards and continuing education
requirements
This session
Self-study of the AAA, SOA, CAS and JBEA source documents
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13. When does the AAA Qualification Standard apply to me?
Applies the year you become credentialed for any SAO issued the
following year
IMPORTANT: There is no grace period under the AAA Qualification Standard
Confirmed during Academy webcast on June 17, 2010
If you get your ASA/ACAS in 2012…
Standard applies to any SAO issued starting January 1, 2013
Must meet Continuing Education requirement in 2012
Make sure you meet all the requirements in addition to continuing
education before issuing any SAO
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14. What if I am still taking exams?
Hours spent meeting the basic education and experience
requirement (i.e., study time) may be applied toward the 30 credit
requirement
You must still satisfy the 3 credit professionalism requirement
You must still satisfy the 6 credit organized activities requirement
Study time is NOT organized
Exam seminars are generally considered organized
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15. Is there an AAA exemption for Enrolled Actuaries?
Yes, but not really
EAs who are not members of any actuarial organization do not fall
within the scope of the Qualification Standard
EAs whose only SAOs are Schedule SB/MB certifications and other
government-required forms are exempt if they meet the JBEA CE
requirements
EAs who issued any SAO related only to plans to which ERISA applies
were exempt through 12/31/2010 (for any SAO issued in 2011) if they
meet the JBEA CE requirements
AAA rules applied beginning in 2011 (for any SAO issued in 2012)
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16. What if I work in multiple practice areas?
Need only 30 credits total
Need only 3 credits of professionalism
Must ―include material in each practice area‖
Does the actuary need 6 organized credits in each of the areas?
Yes
No
Up to the actuary’s judgment
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17. What documentation does the AAA require?
What, where, when, how much, how does it meet compliance?
How Can I Meet the Continuing Education Requirements?
Atlanta Actuarial Club October 18, 2012 50 minutes
1 unit of professionalism credit under AAA QS Standard
Tools
AAA provides an online tool available to everyone (TRACE)
CCA provides an online tool for members
Can just use a personal spreadsheet or document
Must be maintained for minimum of 6 years after the year applicable
No attestation or other official submission is required
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18. Should I keep registration/certificate or slides/notes?
Recent AAA and CCA presentations have stated that you don’t need
to keep meeting registration/certificate or slides/notes
However… Substantiating Compliance – ―An actuary should be
prepared to provide evidence of compliance including certificates of
attendance, meeting outlines or handouts, and notes related to other
activities, when requested by the appropriate counseling and
disciplinary body of the profession.‖
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20. Do I need to concern myself with the differences between
AAA QS and SOA CPD / CAS CE?
Generally, no
If you are subject to the AAA US Qualification Standard, you should elect
to meet the SOA CPD or CAS CE requirement through satisfying the
AAA Qualification Standard
No need to track credits under two different sets of rules
IMPORTANT: Make sure you don’t confuse the two sets of rules in
tracking whether you’ve satisfied the requirements; if using AAA QS to
satisfy SOA / CAS requirement then track all continuing education
activities using AAA QS and ignore SOA / CAS rules
Must still attest SOA / CAS compliance even though the AAA
Qualification Standard does not require attestation
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21. What if I really want to know the SOA rules anyway?
http://www.soa.org/files/pdf/current-cpd-req.pdf
Applies to all SOA members ASA, CERA, FSA
60 credits on a rolling two-year cycle
At least 45 credits must be in ―job-relevant‖ skills
1 credit = 50 minutes
At least 30 credits must be from ―structured‖ activities
At least 3 structured credits must be on professionalism
Maximum of 15 credits on general business skills and consulting topics
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22. What does “structured” mean to the SOA?
Opportunity for interaction among participants
Recorded sessions count if the original session allowed such opportunity
Effective sittings on FSA or EA examinations and successful completion
of FSA modules count as structured (5-15 credits); you can count
additional time as self-study time
At least 7.5 structured credits must be from a source other than your
employer
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23. What does “job-relevant” mean?
Education is job relevant if it broadens or deepens a member’s
knowledge and is
Required for the member’s current role
In related disciplines that bear directly on the member’s work
In a new area in which the member contemplates practicing in the future
Reminder: the AAA definition of ―relevant‖ is
Broadens or deepens an actuary’s understanding of one or more aspects of
the work an actuary does
Expands an actuary’s knowledge of practice in related disciplines that bear
directly on an actuary’s work
Facilitates an actuary’s entry into a new area of practice
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24. When does the SOA requirement apply to me?
New ASAs are required to begin earning CPD credits the calendar year
following attainment of ASA and are subject to reporting at the end of
the second full calendar year after attainment of ASA
If you get your ASA in 2012…
Must meet the CPD requirement for the 2013-2014 cycle
Must attest as of 12/31/2014
Do NOT need any CPD credits in 2012
Do NOT need to attest as of 12/31/2012 or 12/31/2013
REMEMBER: There is no grace period under the AAA Qualification
Standard
For AAA QS purposes, must earn CE credits in 2012 for 2013 SAOs
And in 2013 for 2014 SAOs
Just don’t need to attest until SOA requires it as of 12/31/2014
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25. What are the SOA attestation rules?
IMPORTANT: Required whether you use SOA rules or alternative
compliance (AAA rules)
Members ―must certify compliance at the end of each calendar year‖ for
the preceding rolling two year cycle
Most recent rolling two-year cycle was January 1, 2010, to December
31, 2011
Will need to attest again as of 12/31/2012 for rolling two-year cycle from
January 1, 2011, to December 31, 2012
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26. How does SOA attestation work?
Go to www.soa.org (My Account) and select ―Update my SOA CPD‖
Click the box that states ―I certify that I have fulfilled the SOA CPD
requirement for 2011-2012 by meeting the following‖
Could attest compliance under SOA rules only if you tracked them
separately from AAA rules; more commonly, will attest under the
alternative compliance path
US AAA Qualification Standard – Click the box that states ―Qualification
Standard for Actuaries issuing Statements of Actuarial Opinions in the US‖
SOA CPD Requirement – Click the box that states ―Basic Requirement
provisions of Section B‖
CIA (Canada), FOA/IOA (UK) and IAA (Australia) paths are not generally
available to actuaries practicing in the US
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27. How will SOA monitor compliance?
Actuarial membership directory was altered to indicate Compliant or
Non-Compliant (or Retired)
If you forget to attest by deadline, directory can be updated once you attest
If you have a shortfall, you can attest once you’ve made up the shortfall
You are still a member in good standing if you
— Don’t falsely attest compliance
— Inform anyone relying on your actuarial expertise that you did not meet the SOA
CPD requirement
Approximately 1% of members (200) will be audited each cycle
2nd quarter of each year
Will be required to provide log of activities used to satisfy compliance
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29. What are the key elements of the CAS CE policy?
Applies to all ACAS and FCAS members who provide Actuarial Services
Can meet the requirements by satisfying the continuing education
requirements established by a national actuarial organization recognized
by the policy (e.g., the AAA Qualification Standard)
Can elect to meet the CAS policy directly
Must maintain a log of continuing education activities
Must certify compliance at the end of each year, beginning 12/31/2011
CAS online membership directory will be modified to include a heading
for CAS CE, which will be available to the general public
Compliant or Non-Compliant (or Not Currently Providing Actuarial Services)
CAS may randomly audit a small percentage of members
CAS members listed as Non-Compliant may be subject to penalties
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30. What are the CAS rules?
http://www.casact.org/cms/files/CAS_CE_Policy.pdf
60 credits on a rolling two-year cycle
30 credits in 2011 (half of a two-year cycle)
New members must earn 30 credits in the year following admission
At least 45 credits must be ―job-relevant‖ excluding professionalism
CAS has adopted AAA’s definition of job-relevant
1 credit = 50 minutes
At least 30 credits must be from ―structured‖ activities
At least 6 credits must be on professionalism
Maximum of 6 credits on general business skills and consulting topics
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31. What does “structured” mean to the CAS?
Organized activity or experience derived from an organized activity in
which there is opportunity for interaction or viewing of interaction among
participants
Viewing recorded presentations that included a Q&A discussion would qualify
as structured
Effective sittings on FCAS examinations count as structured (15 credits);
you can count additional time as self-study time
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32. Joint Board for the Enrollment of Actuaries
Continuing Education Requirement
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33. What is the JBEA Continuing Education Requirement?
New rules effective for the 2011-2013 cycle
http://www.irs.gov/pub/irs-utl/2011-7573.pdf
36 credits in each three-year enrollment cycle
1 credit = 50 minutes
―Core‖ requirement
If first full cycle (enrolled in 2008 or later), at least 18 credits must be core
Otherwise (enrolled before 1/1/2008), at least 12 credits must be core
12 credits must be in ―formal‖ programs
2 credits relating to ethical standards
The shortest recognized program is 1.0 credit
The same course of study cannot be used more than once within a
given cycle
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34. When does the JBEA requirement apply to me?
New EAs generally must satisfy a prorated continuing education
requirement in the same cycle they obtain the EA
If you become an EA during the first year of the cycle (2011)…
Must complete 24 credits
At least 12 credits must be core and 8 credits must be formal
If you become an EA during the second year of the cycle (2012)…
Must complete 12 credits
At least 6 credits must be core and 4 credits must be formal
If you become an EA during the third year of the cycle (2013)…
Exempt from the continuing education requirements until the next enrollment
cycle
Must still file a timely application for renewal
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35. What constitutes a “qualifying program”?
Is conducted by a ―qualifying sponsor‖
Covers current subject matter
Includes written outlines or textbooks
Is developed by individual(s) qualified in the subject matter
Is taught by instructors, discussion leaders, and speakers qualified with
respect to the course content
Includes means for evaluation by the Joint Board of technical content
and presentation
Provides a certificate of completion
Provides a certificate of instruction to each person who served an
instructor, discussion leader, or speaker.
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36. What constitutes a “formal program”?
Meet all qualifying program requirements
Participants must have opportunity to interact with another individual
qualified with respect to the course content who serves as an instructor,
whether or not in the same physical location
Whether a program qualifies as formal determined on a participant-by-
participant basis
Formal with respect to a participant if the participant simultaneously
participates in the program in the same physical location with at least two
other participants engaged in substantive pension service
Groups of three or more participants in the same physical location may
participate in person or via internet, videoconference, or teleconference
If program is pre-recorded, there must be a qualified individual who
serves as instructor and is available to answer questions immediately
following the pre-recorded program.
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37. What constitutes “core” credit?
―Core subject matter is program content and knowledge that is integral
and necessary to the satisfactory performance of pension actuarial
services and actuarial certification under ERISA and the IRC‖
Characteristics of actuarial cost methods under ERISA
Actuarial assumptions
Minimum funding standards, maximum deductible contributions
Titles I, II, and IV of ERISA
Requirements with respect to the valuation of plan assets
Requirements for qualification of pension plans
Tax treatment of distributions from qualified pension plans
Excise taxes related to the funding of qualified pension plans
Standards of performance (including ethical standards) for actuarial services
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38. What constitutes acceptable “non-core” credit?
Non-core credit is ―designed to enhance the knowledge of an EA in
matters related to the performance of pension actuarial services‖
Economics
Computer programming
Pension accounting
Investment and finance
Risk theory
Communication skills
Business law and general tax law
Note that this is a much narrower range of acceptable topics than those
allowed under either the AAA Qualification Standard or the SOA
Continuing Professional Education Requirement
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39. What kinds of other activities qualify for JBEA credit?
Serving as an instructor, discussion leader or speaker for a qualifying
program
Four-for-one credit will be awarded in recognition of both presentation and
preparation time
Credit may not exceed 50% of the continuing education requirement for an
enrollment cycle
Publishing relevant articles, books, films, audio or video
Credit may not exceed 25% of the continuing education requirement for an
enrollment cycle
Service on a Joint Board advisory or examination committee
Passing SOA examinations limited to the number of hours scheduled
for each examination and may be applied only as non-core credit
provided the content of the examination is acceptable non-core
Presumably CSP-RU and DP-RU both count as non-core credit
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40. What documentation does the JBEA require?
Programs must provide a written outline and a certificate of attendance or
completion
Actuary must retain “sufficient documentation to establish
completion of such hours” for 3 years after the end of the cycle
Name of sponsor
Location of the program
Date(s) attended
Name(s) of the instructor(s), discussion leader(s), or speaker(s)
Core and non-core credit claimed for program
Title of program and description of content
Certificate of attendance/completion or signed statement of the hours of attendance
obtained from the sponsor
Compliance is determined at the time of applying for renewal of enrollment
Joint Board may require any EA to provide copies of any records required to
be maintained
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