Whats happening at the CIA

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Whats happening at the CIA?

• Charles McLeod
• June 2, 2005

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What Ill cover

• What constitutes a profession?
• Morris Review of UK actuarial profession
• The CIA Strategic Plan
• Some other major CIA developments
• Key issues for the CIA

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About the CIA

• Celebrating 40th anniversary
• Over 2,500 fellows
• Governed by a Board and 3 Councils
• Over 30 Committees
• Secretariat in Ottawa
• Almost all actuarial involvement is by volunteers

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About the CIA (continued)

• Only FCIAs are permitted to carry out certain
  reserved roles such as
• - Be the Appointed Actuary for an
  insurance company
• - Sign pension plan actuarial reports
• The CIA is a self-regulating profession

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About the CIA (continued)

• Many things that we may take for granted today
  were earned due to the hard work of some
  members of the CIA, and the trust that regulators
  and legislators had in the CIA.
• Complacency can be dangerous.

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A. What constitutes a profession?

• Education (pre-fellowship) and accreditation.
• Post-fellowship education and training,
  especially CPD requirements
• Rules of Professional Conduct
• Standards of Practice
• Review of members work
• Discipline procedures

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B. Morris Review

• Direct cause was Equitable Life (UK) and
  subsequent Penrose enquiry
• Looked at all aspects of UK actuarial profession
• Final report published in March 2005

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Morris Reviews Criticisms

• Professional standards that have been weak,
  ambiguous or too limited in range, and perceived
  as influenced by commercial interests
• An absence of pro-active monitoring of members
  compliance with professional standards and
• A profession that has been too introspective, not
  forward-looking enough and slow to modernise.

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Self-regulatory or not?

• Continued self-regulation by the (UK) profession
  is unlikely to restore public confidence in the
  (UK) actuarial profession.
• Independent oversight of the Professions
  self-regulation is the most appropriate
  regulatory framework.

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Self regulation the UK outcome

• Financial Reporting Council (FRC) to provide
  oversight of regulation of actuarial profession
  (FRC already does this for accountancy)
• POBA (Prof. Oversight Body for Accountancy) to
  oversee actuarial education and CPD
• New Actuarial Standards Board (reporting to FRC)
  to set technical standards
• Actuarial profession to continue to set ethical
  standards of conduct provided that the FRC feels
  this to be appropriate.

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C. Strategic plan

• 5 year horizon. Where do we want to be?
• Approved by Board in Nov 2004
• Specific action plans being developed and/or
  implemented by Councils and Committees

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Four strategic objectives

• The actuarial profession will be recognized for
  its integrity, high standards of practice, and
  quality of work.
• The Institute will have more public influence
  and will be recognized as a key player in matters
  of public policy.

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Strategic objectives

• 3. The Institute will be a stronger
  organization, evidenced in part by an increase in
  membership.
• 4. The Institute will act in an efficient and
  responsive manner.

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Strategic Objective 1

• The actuarial profession will be recognized for
  its integrity, high standards of practice, and
  quality of work.
• To be effective, a profession must show that it
  understands and responds to the needs of its
  public this has always been important , but is
  particularly so today given events such as Enron
  and Equitable Life (UK)

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Objective 1 major initiatives

• Review Standards of Practice (PSC)
• Review CPD requirements (Continuing Education
  Committee)
• Review discipline procedures (CPC)
• Review other elements of corporate governance
  (Board task force)
• Develop a brand for the profession (MSC)

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Strategic Objective 2

• The Institute will have more public influence
  and will be recognized as a key player in matters
  of public policy.
• Actuaries have the knowledge to make a valuable
  contribution to public policy issues such as
  retirement and health care we have not always
  done so.

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Objective 2 - background

• Actuarial work is highly technical and not always
  well understood to be influential we must
  improve our communications

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Objective 2 major initiatives

• Develop and implement a communications strategy
  (communications plan approved in late 2004) MSC
  and ED
• Better support government and media relation
  efforts (MSC and ED)
• Developing set of position statements
• Create network of people with good media training

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Objective 2 - major initiatives (continued)

• 3. Improve public image
• Actively promote actuarial approach to the Health
  Care debate
• Articulate the CIA position on key pension issues
• Seek opportunities to communicate the CIA
  position on other key topics

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Strategic Objective 3

• The Institute will be a stronger organization,
  evidenced in part by an increase in membership.
• Limited growth opportunities in some traditional
  areas of practice, but
• We have skills that can be used in other areas

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Strategic Objective 3 (contd)

• If we are strong in Canada we can influence
  international developments and can take advantage
  of the opportunities of globalization.
• Long qualification process discourages many
  potential high quality candidates

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Objective 3 major initiatives

• 1. Consolidate position of actuaries in
  traditional fields by identifying what needs to
  be done to expand the scope of work done by
  actuaries (e.g. additional skills training such
  as communications) EEC
• 2. Attract bright university graduates with
  pertinent business and communication skills (EEC)

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Objective 3 major initiatives (continued)

• 3. Develop opportunities for actuaries in new
  areas such as Risk Management

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Strategic Objective 4

• The Institute will act in an efficient and
  responsive manner.
• We have moved slowly in dealing with key
  stakeholders such as regulators, in making public
  statements, and in developing standards of
  practice we need to be faster

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Objective 4 major initiatives

• 1. Improve organizational effectiveness (Board
  and all councils)
• 2. Improve effectiveness of CIA members as
  volunteers (MSC and ED)
• 3. Review due process
• 4. New guidelines approved (April 2005) for
  making public statements

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D. Some other major CIA developments

• Additional resources at Secretariat
• New logo
• Survey of members

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E. Key issues for the CIA

• Morris Review and Corporate Governance
• Pensions
• International accounting standards especially
  for insurance
• Health Care
• Risk Management
• Research

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Research

• The (UK) profession has been too insular, with
  insufficient contact with other professions and
  too narrow a professional training, and has been
  too slow to adopt new approaches and techniques
  
• (Interim report, Morris Review, Dec 2004)
• Financial economics

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Questions and comments?