President's Message (October 21, 2010)
Dear Academy colleague,
Earlier this month your board of directors met for its last meeting of the year. In addition, a number of U.S. delegates (me included) just returned from attending a meeting of the International Actuarial Association (IAA). Spending several days with representatives of nearly 80 actuarial organizations from around the globe serves to remind us of how passionate actuaries are about our profession, how significant an impact we have on national and international economies, and how many lives we touch in the course of our work.
To ensure that the 2011 board gets off to a great start, we invited all incoming members of the board to participate in our October meeting as observers. While that made for a large group around the table, even with a lengthy agenda we enjoyed a thoughtful, spirited discussion of numerous topics ranging from public policy to international issues and from actuarial discipline to the governance and operations of the Academy itself.
During the meeting, the board received the final report of the Governance Task Force, a group of 15 volunteers representing a broad cross section of the Academy's membership. The task force was created to examine the Academy's governance structure and recommend changes where appropriate. The board will consider the report at a special full-day meeting in early January.
We already have posted the complete report on the Academy website and we invite every member to read the task force report and share detailed comments via an online feedback form [please note that the form is on the members-only section of the website; you first will need to log in as a member to access the form]. Your feedback certainly will assist the board's discussions in January.
The board also received a status report from President-Elect Mary Frances Miller on the Strategic Planning Committee's review of the Academy's mission and vision statements. To gain a broader perspective on the committee's draft, we plan to call upon the new Academy Advisors group to examine the components of the Academy's proposed/revised mission and vision.
In addition to these issues, the board also:
- Unanimously approved in principle the current proposal, developed by the Council of U.S. Presidents (CUSP) in consultation with the ABCD, to reform the disciplinary process. Under the proposal, a disciplinary recommendation by the ABCD would be submitted for determination to a single representative joint disciplinary panel and, in the event of an appeal, a joint appeal panel. The proposal would create a more efficient disciplinary process with greater consistency in outcomes. For the Academy, this will require bylaws changes and a vote of the membership to ratify those changes in 2011, with the other organizations following a similar process and timeline. Our goal remains for the revised process to go into effect in 2012.
- Unanimously elected the slate of 2011 Academy officers presented by the Nominating Committee. All members should have received the press release announcing the new officers.
- Received the slate of five candidates for regular director positions on the board of directors, as recommended by the Nominating Committee: Catherine Murphy-Barron (1-year term), Shari Westerfield (2-year term), Marc Oberholtzer (3-year term), Jeffrey Petertil (3-year term), and Stephen Preston (3-year term). Academy members will vote on this slate of candidates at the Academy's Annual Meeting and Luncheon on Nov. 8. For more information, read the Nominating Committee report sent to all members.
- Received and actively discussed a report from the Public Plan Task Force (chaired by Dave Sandberg). The board endorsed the position of the Task Force that public plans should be analyzed under a risk framework.
- Discussed issues relating to model standards of practice being contemplated by the IAA as well as the report of an IAA task force to steer actuarial standards of practice in all countries toward convergence.
- Approved a $10 dues increase (approximately 1.7 percent) to maintain a break-even operating budget for the Academy in 2011. The issue of dues is always sensitive and the increase was discussed in great detail. While actuaries always feel that professional dues are too high, I think it is important to note that the dues in the United States for members of the Academy and either the CAS or SOA compares favorably with the dues paid by actuaries in the U.K. and Australia.
The Academy's work, of course, hasn't been focused entirely on governance and related topics. Our practice councils remain busy addressing a wide variety of developing issues. Among many actions, the Academy recently:
- Testified to a jointly sponsored Department of Labor and Department of the Treasury public hearing on lifetime income options for retirement;
- Updated the issue brief on raising the retirement age for Social Security;
- Published a report concerning the effects of loss reserve development in the P/C industry and the role that the development of losses plays in the insolvencies of P/C insurance companies;
- Submitted comments to the President's Working Group on Financial Markets on analysis of terrorism risk insurance;
- Submitted comments to the Financial Accounting Standards Board (FASB) on its Proposed Accounting Standards Update, Accounting for Financial Instruments and Revisions to the Accounting for Derivative Instruments and Hedging Activities; and,
- Submitted comments to the International Association of Insurance Supervisors (IAIS) on Group-wide Regulatory Requirements.
Check the Practice Council pages on the Academy website for the latest developments. And be sure to look for the year-end wrap-up of all the Academy's 2010 activities, The Record, to be released in November with our 2011 dues statements.
This is my last President's Message — I hope you have found these to be informative. It will be my honor to pass the gavel to President-Elect Mary Frances Miller at our Nov. 8 Annual Meeting and Luncheon. I would like to thank each of the board members and volunteers with whom I had the privilege to serve this year and who contributed so much of their time, energy, counsel, and leadership to the profession and the Academy. Lastly, I want to thank all of you for your support during my term in office.
American Academy of Actuaries