FAQs about the revised Qualification Standards
[FAQ last updated Oct. 16, 2008]
- What are the CE (continuing education) requirements for actuaries who issue Statements of Actuarial Opinion (SAOs) in 2008?
- To whom do the revised Qualification Standards apply?
- Under the revised standards, what does the "grandfather" clause for basic education and experience mean for actuaries?
- Under the revised Qualification Standards, what constitutes a Statement of Actuarial Opinion?
- Is an opinion that was considered a PSAO under the old standards now considered an SAO?
- Have the examinations required to satisfy the Basic Education Requirement of the General Qualification Standard been changed?
- How much CE is required?
- How are CE credits calculated?
- Is there any flexibility in the calendar-year CE requirement?
- How much of the CE is required to be an organized activity?
- Does the CE requirement include any mandatory content?
- Under the new Qualification Standards, in-house meetings can qualify as organized CE activities only if outside speakers are invited. To what extent must the outside participant be involved in the meeting?
- If you have been qualified to issue SAOs in an emerging area that later becomes the subject of an SOA specialty track, must you then meet the specialty track requirements in the General Qualification Standard (Section 2.1) to remain qualified?
- How do the Qualification Standards affect enrolled actuaries?
- Do the Specific Qualification Standards require 15 CE credits a year in addition to the 30 credits required by the General Qualification Standard?
- What kinds of CE are allowed under the new requirement to earn 3 professionalism CE credits per calendar year?
- How do the revised standards affect retired actuaries who are Academy members?
- Is there still a process for becoming an "approved provider" under the revised Qualification Standards?
- I have a question about the revised Qualification Standards that isn't addressed here. Where can I get an answer?
- What should an actuary maintain as evidence of compliance with the continuing education requirements of the qualification standards?
- Does the Committee on Qualifications have any further suggestions to assist actuaries to determine what constitutes "relevant continuing education" (CE) under Section 2.2.7 of the Qualification Standards, particularly in the context of presenters at sessions or seminars?
Actuaries who issue SAOs in 2008 must meet the pre-2008 Qualification Standards, either under the Qualification Standards for issuance of PSAOs, or under Precept 2 of the Code of Professional Conduct.
For SAOs that would have been PSAOs under the pre-2008 Qualification Standards, the pre-2008 standards apply (including a required minimum of 24 CE credits in a rolling two-year period). For SAOs that would not have been PSAOs, Precept 2 of the Code of Professional Conduct requires that the actuary be qualified before issuing SAOs; however, no specific amount of CE is required.
Actuaries are expected to continue to exercise their professional judgment to determine the appropriate level of continuing education to issue SAOs in 2008. The new continuing education requirements must be met for SAOs issued in 2009 and thereafter.
To whom do the revised Qualification Standards apply?
The revised Qualification Standards will apply to all actuaries who are members of one of the U.S.-based actuarial organizations and who issue Statements of Actuarial Opinion (SAOs) in the United States, and to members of any actuarial organization that is not U.S.-based but requires its members to meet the Qualification Standards when practicing in the United States.
The U.S-based organizations are the Academy, the American Society of Pension Professionals and Actuaries (ASPPA), the Casualty Actuarial Society (CAS), the Conference of Consulting Actuaries (CCA), and the Society of Actuaries (SOA).
An actuary who met the basic education and experience (BEE) requirements to issue Prescribed Statements of Actuarial Opinion in a particular area of practice prior to Jan. 1, 2008 (i.e., under the old standards) continues to meet the basic requirements for that area of practice after Dec. 31, 2007, under the new standards. This applies whether or not the actuary issued any PSAOs in 2007.
An actuary who was unqualified, under the BEE requirements, to issue PSAOs in 2007 (i.e., under the old standards) must meet the new BEE requirements under the revised Qualification Standards to issue SAOs. Actuaries who begin issuing SAOs in a new area of practice after Dec. 31, 2007 must also meet the new BEE requirements in the revised Qualification Standards for that practice area.
Under the revised Qualification Standards, what constitutes a Statement of Actuarial Opinion?
For purposes of the Qualification Standards, 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.
"Actuarial Services" are defined in the Code of Professional Conduct as "Professional services provided to a Principal (client or employer) by an individual acting in the capacity of an actuary. Such services include the rendering of advice, recommendations, findings, or opinions based upon actuarial considerations."
An appendix to the Qualification Standards describes SAOs and lists examples of commonly issued opinions and work products that are�or are not�SAOs.
Is an opinion that was considered a PSAO under the old standards now considered an SAO?
A PSAO is a type of SAO. Actuaries who issue certain PSAOs, such as those issued for the NAIC Life and A&H Annual Statement, NAIC Property and Casualty Annual Statement, and NAIC Health Annual Statement, must meet the Specific Qualification Standards (Section 3 of the revised standards) in addition to the General Qualification Standard (Section 2).
The revised Qualification Standards no longer require an actuary to meet certain examinations, but rather to obtain membership in an actuarial organization and to meet certain other criteria, as described below:
- 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; and
- Have three years of responsible actuarial experience, which is defined as work that requires knowledge and skill in solving actuarial problems; and
- Be knowledgeable, through examination or documented professional development, of the Law applicable to the statement of actuarial opinion. "Law" is defined in the Code of Professional Conduct.
There are additional experience requirements for actuaries who issue statements of actuarial opinion in an area covered by a specialty track offered by the SOA or in an area of practice covered by the exams of the CAS or ASPPA. (For more information on the Specific Qualification Standards, see below.)
Actuaries who want to sign SAOs are required to have obtained at least 30 relevant CE credits in the previous calendar year.
This requirement is being phased in, however. For the year 2008, the requirement has been shortened to 24 credits for actuaries who will be signing SAOs in 2009. However, commencing in 2009, actuaries who wish to sign SAOs must obtain 30 CE credits each calendar year to be qualified to issue SAOs.
How are CE credits calculated?
Both for organized activities and other activities, 50 minutes of participation equals 1 CE credit. (This is sometimes called a "CE hour.")
Is there any flexibility in the calendar-year CE requirement?
Yes. The 30-credit requirement will usually be met in the calendar year before the year the SAO is issued. However, if an actuary who wants to sign an SAO has fewer than 30 credits of relevant CE from the preceding year, he or she can make up the shortfall. Those credits must be earned before the SAO is issued, and they will not count toward the CE requirement for the current year.
There is also a one-year roll-forward provision. If an actuary earns more than 30 relevant CE credits in any given year, the excess can be carried over to the next year.
How much of the CE is required to be an organized activity?
Only 6 CE credits per year must be from "organized activities" that involve interaction with actuaries or other professionals working for different organizations. The remainder of the CE may be from "other activities."
Detailed examples of "organized activities" and "other activities" are included in the Qualification Standards. For instance, "organized activities" can include (but are not limited to) "conferences, seminars, webcasts, in-person or online courses, or committee work that is directly relevant to the area of practice of the subject of the SAO." In-house meetings with outside speakers would be an organized activity.
"Other activities" can include reading actuarial literature, writing professional articles (including researched articles for Contingencies), listening to tapes of actuarial meetings, relevant in-house meetings, study for actuarial exams, or preparing to speak or lead a discussion at a CE activity.
Does the CE requirement include any mandatory content?
Actuaries are required to complete and document at least 30 credits of relevant CE each calendar year. That must include at least 3 credits on professionalism topics. CE on business skills and consulting topics is not mandatory, and the Qualification Standards allow no more than 3 CE credits on those topics to count toward the annual CE requirement.
The Qualification Standards include a description of what is considered "relevant continuing education." They also state that ultimately, it is an actuary�s responsibility to make a reasonable, good-faith determination of what CE opportunities will enhance his or her ability to practice in a desired field.
For in-house meeting time to count as an "organized activity," there should be an outside active participant available for questions and for participation throughout the event.
If an organization has a daylong series of sessions and the outside participant can only participate in one or two of the sessions, only those sessions would count as "organized activities."" If an organization has a full day of panel discussions and the outside participant serves on the panel for the entire day, therefore having an opportunity to actively participate and interact, the full day can be counted as an "organized activity."
You only need to meet the BEE requirements once. If you are currently qualified to issue SAOs in a particular area that has no specialty track, and if the BEE requirements subsequently change (e.g., a specialty track is added at some point after you first became qualified to issue such SAOs), you need not meet the Section 2.1 requirements again to be qualified.
However, if you have never issued SAOs in a particular specialty because you were unqualified in that area, and if that area becomes the subject of an SOA specialty track and you want to issue SAOs in that specialty, you will need to meet the Section 2.1 specialty track requirements.
How do the Qualification Standards affect enrolled actuaries?
There is an exemption for enrolled actuaries who issue SAOs related to retirement plans to which ERISA applies. This broad exemption is temporary. Beginning in 2011 (after the next three-year Joint Board cycle), the exemption is limited to the Form 5500 Schedule B certification and other ERISA forms. Enrolled actuaries who issue SAOs other than those exempted must satisfy the CE requirements of the Qualification Standards.
No. The 15 CE credits required by the revised Specific Qualification Standards may be applied to the 30-credit annual CE requirement in the General Qualification Standard. In other words, actuaries are not required to obtain 45 CE credits annually to satisfy the revised Qualification Standards.
Also, the 6 CE credits that must be "obtained through experience that involves interaction with outside actuaries or other professionals" under the Specific Qualification Standards may also satisfy the "organized activity" requirement under the General Qualification Standard.
The CAS, CCA and SOA have various audiocasts, webcasts, and seminars on professionalism topics throughout the year; information on many of these can be accessed online via the North American Actuarial CE Calendar. In addition, in 2008 the Academy is sponsoring at least three webcasts on various professionalism topics that could satisfy both the professionalism component and the organized activity requirement.
Relevant CE might involve such topics as actuarial discipline, actuarial communication, the Code of Professional Conduct, and actuarial standards of practice (ASOPs). Such CE could include studying, reviewing, or commenting on an ASOP exposure draft; studying or reviewing the Code of Professionalism Conduct; or serving on the ASB or a professionalism committee.
Courses on topics that involve business ethics, in general, could be counted as professionalism CE. However, courses on general business topics that do not involve ethics could count only as general business or consulting CE, which is limited under the revised Qualification Standards to a maximum of 3 CE credits per year.
How do the revised standards affect retired actuaries who are Academy members?
If you are retired and will not be issuing SAOs, you are not required to comply with the revised standards. However, you must comply with all of the requirements in the standards if you choose to issue SAOs in the future. Having the MAAA designation does not automatically mean that an actuary is qualified under the Qualification Standards.
Also, please note that the CE requirements in the revised standards apply only to actuaries who will be issuing SAOs. They do not apply to other Academy members.
Under the revised standards, there is no longer a process for becoming an "approved provider." It's now up to the individual actuary to determine if attendance and participation at any particular event constitutes an "organized activity."
If you have a question about the Qualification Standards, please forward your specific question to the Academy. Some questions take more time than others to answer and depend upon the availability of volunteers. We will try to answer all questions within two weeks of their submission.
The American Academy of Actuaries does not "audit" actuaries for compliance with the Qualification Standards, however, actuaries may face situations where their CE qualifications are audited by third parties, such as regulators, attorneys in litigation, the Actuarial Board for Counseling and Discipline (or other disciplinary bodies to which the actuary is subject), or other organizations to which such actuary is a member that require audits. Section 6.1 of the Qualification Standards sets forth recommended recordkeeping of CE, however, the method of recordkeeping is ultimately up to the individual actuary. Section 6.1 recommends at a minimum keeping track of the date of the CE, the hours earned, and a brief description of the subject matter.
Section 6.2 describes recommended materials that an actuary should consider keeping in case of an audit. For example, certificates of attendance (if available), meeting outlines or handouts, registration materials, and notes (in the case of "other activities"). Again, it is up to the actuary to use his or her judgment in determining what best exemplifies compliance with the CE requirements given the circumstances of the event.
As noted in Section 2.2.7 of the U.S. qualification standards, it is ultimately up to the individual actuary to determine on a good-faith basis what CE opportunities meet the definition of relevant CE. However, the Committee on Qualifications has provided the following informal guidance at various webcasts and seminars: activities (whether organized or other) may constitute relevant CE if you learned something or if you had the intent to learn something or if you were confirming your existing understanding of materials related to your current or future actuarial work. This guidance should also be considered in the context of teaching actuarial courses or presenting at seminars. Teaching or presenting may not necessarily result in an opportunity by the presenter to earn relevant CE unless the nature of the presentation allows the presenter to learn from others in attendance. Note that time spent preparing for the presentation might also qualify as relevant CE. However, if you are teaching the same subject matter again and again, at some point, you, as the teacher, would not likely be gaining or confirming anything. This is a determination you must make.
