Read the latest issue of This Week—the Academy's end-of-week digital newsletter, compiling a week’s worth of news, updates, and media coverage in one convenient, easy-to-use publication. (November 11, 2016)

Read the latest issue of This Week—the Academy's end-of-week digital newsletter, compiling a week’s worth of news, updates, and media coverage in one convenient, easy-to-use publication. (November 04, 2016)

Farewell Remarks of 2015-16 Academy President Tom Wildsmith at the American Academy of Actuaries Annual Meeting and Public Policy Forum in Washington, D.C. November 3, 2016   Wildsmith: Nothing of lasting importance is ever accomplished by just one person. This is true of the Academy. Our strength lies in our 19,000 members, and especially in our countless volunteers. I also want to recognize Academy staff. I have been struck by the remarkable dedication they show to a profession that is, in most cases, not their own. To all of our members, volunteers and staff—thank you. I would also like to thank Mary Downs, for her support, encouragement—and patience. Breaking in a new president each year must be a challenge, but she handled it with grace and good humor. I also owe a special debt of gratitude to a small cadre of past presidents who were willing to serve as a kitchen cabinet, providing constant advice, support and perspective. Mary Miller, Tom Terry, Cecil Bykerk and Ken Hohman—thank you. Earlier this year, I was talking with the president of another actuarial organization. He mentioned how his association’s mission and vision have evolved over time—and seemed surprised when I said that the Academy’s mission has not changed since it was first founded in 1965. The Board has tweaked the words over time to try and express that mission more clearly, but the mission itself has not changed. Understanding why the Academy’s mission has not changed—while those of other actuarial organizations have—is the key to understanding what makes the Academy unique. It’s not unusual for organizations to revise their missions over time. They do this to stay relevant in the face of market shifts, new technologies and social changes. But there are some organizations that—by the very nature of their mission—are of enduring relevance. They do not sell a product in the market, provide a technology that can be superseded, or ride the wave of a social fad. Instead, they play an essential role in government, society—or a profession. The Academy is one of those organizations. So what is the Academy’s mission? The Academy was established in response to a very specific need.  As one regulator put it at the time, “Our laws today demand no more proof of the actuary’s competence than did the laws of ancient Rome.”   Anyone could present themselves to the public as an actuary, without regard to training, background, or expertise. Tens of millions of Americans depended on the work of actuaries, but actuaries were largely unregulated.  That had to change, because it put the public at risk. This wasn’t a problem that could be fixed by more—or even better—education and research. It was a different kind of need, and demanded a fundamentally different response.  It was time to make the transition from an occupation—a technical specialty—to a true profession. U.S. actuaries faced a simple choice.  We could regulate ourselves—setting our own standards of conduct, practice and qualification—or wait for the government to do it for us. Leading actuaries had the vision to recognize the problem. They knew we had to build a profession that would ensure that practicing actuaries were both competent and committed to serving the public. They had the insight to recognize that it could be built on a flexible self-regulatory system, rather than relying on rigid and prescriptive government regulations. And they had the initiative to make it happen. Rather than waiting on government to impose the types of standards and institutions that are required of other professions to protect the public, they decided we should do it ourselves—and created an independent body, the Academy, for that purpose. The historical record is very clear on this.  The existence of the Academy as a separate entity is not a historical accident.  It is the result of a deliberate decision by a generation of leaders who understood that they couldn’t professionalize the actuarial community—or gain regulatory recognition for actuaries—by simply building a bigger and better, more consolidated education and research organization.  It required something new and different. That’s why they established the Academy as “a new organization which would be neither subordinate to, nor would have any authority over, any other actuarial professional organization.”   So, creating and maintaining the professionalism infrastructure for the U.S. actuarial community is at the heart of the Academy’s mission, and the primary reason it was established. Building this infrastructure was a slow, deliberate process—the Academy spent its first 25 years putting it into place. We now have a framework of mature institutions that allow us to be a truly self-governing profession. The Academy’s role in these standards and institutions isn’t a historical accident—it’s the reason the Academy exists. The Academy is also the voice of the profession to the nation. This role flows naturally from our professionalism mission, and was part of the founders’ original vision. But it’s important that we understand what this role means. The Academy serves the public interest ... on behalf of the actuarial profession. We aren’t a union or a trade association—we don’t represent the commercial interests of any particular industry, group of employers, or segment of the profession.  When it comes to public policy, we are the means by which the U.S. profession serves the public.  Is serving the public ultimately good for the profession?  Yes!  But it has to be real service-not industry lobbying dressed up with “public friendly” catchphrases. The only way to maintain a reputation for being impartial, nonpartisan, and unbiased is to truly be impartial, nonpartisan, and unbiased. Washington is full of groups that claim the mantle of impartiality while actively lobbying on behalf of a special interest agenda—it’s also full of folks who are very skilled at seeing through that sort of thing. Impartiality has to be real, or it won’t work. Over the last year I’ve had the privilege of speaking on behalf of the U.S. actuarial profession. I have tried to speak clearly, faithfully, and compellingly—because the profession deserves no less.  To preach, if you will, the gospel of professionalism. This has been the greatest honor of my career. Even so, my voice is a small one—and my time in this role has been relatively short. But the Academy, the Academy has been speaking clearly, faithfully and compellingly on behalf of the U.S. profession for more than a half-century.  Over those decades, it has developed a voice that is truly powerful—a voice that is heard in the halls of Congress, in federal agencies, and in state capitals and departments of insurance across the nation. So why don’t we “update” the Academy’s mission? Because the Academy was created for a very specific reason—to provide the infrastructure, the standards and the disciplinary process necessary for the U.S. actuarial community to be recognized as a self-regulating profession. This mission will remain not just relevant, but vital, as long as there are actuaries practicing in the United States. It’s a role, and a need, that’s simply not going away. That being the case, the only thing that could make the Academy irrelevant would be for us to lose sight of who we are, and why we’re here. Changing our mission—evolving it into something else—would not just endanger the relevance of the Academy, it would be a betrayal of the profession and the public the Academy was created to serve. So we should be proud. We have a truly honorable mission—to ensure that U.S. actuaries remain a self-regulating profession worthy of the public’s trust. We should be confident. We have a five-decade track record of excellence, a culture of objectivity and independence, and an unsurpassed reputation for nonpartisanship. And we should be optimistic! Because building on that foundation, the best is yet to come. ()

Inaugural Remarks of 2016-17 Academy President Bob Beuerlein at the American Academy of Actuaries Annual Meeting and Public Policy Forum in Washington, D.C. November 3, 2016   Beuerlein: Thank you, Tom [Wildsmith, Academy president, 2015-6]. It’s a great honor to stand before you, chosen to serve as the Academy’s 52nd president. Tom, last year in your inaugural address, you described how we are a link in a chain from the past to the future—a living history of the Academy and of our profession. I want to thank you for the Academy legacy that you, Mary D. Miller, Tom Terry, Cecil Bykerk, David Hartman, Ken Hohman, Jim MacGinnitie, Dave Sandberg, and others too numerous to name have passed down through your tremendous leadership. I’d also like to extend my public congratulations to our incoming president-elect, Steve Alpert. Steve, I look forward to working with you. I also look forward to working with my good friends Jerry Brown, the new president of the Society of Actuaries and Nancy Braithwaite, the soon to be president of the Casualty Actuarial Society.  I have been friends with Jerry and Nancy for many years and look forward to working with them for many years ahead. I would also like to thank my wife, Sue, who, though not an actuary, is one of the best ambassadors that the actuarial profession can have. So we are a living link from the past to the future of our profession. What responsibilities does that place on us as actuaries? What opportunities does it create? What are the implications for the Academy? Thinking about being the link to the future brings to mind the legend of the Boulder of Sisyphus from Greek mythology. As you may remember, due to some misdeeds, Sisyphus was required for eternity to roll a large boulder to the top of a mountain. But, each time Sisyphus, by the greatest of exertion and toil, attained the summit, the boulder rolled back down the mountain. Similarly, our profession can be thought of as a lifelong effort to acquire and enhance a continuously changing set of skills. As some skills become perfected, other new skill requirements will appear. This is meaningful as we reflect on how we think about our profession’s future. After all, 50 years ago, who could have foreseen: The diverse, emergent roles of actuaries in enterprise risk management, catastrophe modeling, predictive analytics, and other nontraditional areas? Or the challenges to public systems and programs threatening their future sustainability? Or the paradigm shifts brought on by the Affordable Care Act, life principle-based reserving, the low-interest-rate environment, and climate and terrorism risk, to name just a few? Or, how about the development of the robust pillars of actuarial professionalism, and the new pressures, demands, and ethical challenges actuaries face as professionals? And in a few moments, we’ll take a deep dive into the history and continuing implications of one of the most significant of those changes, the Dodd-Frank financial reform law, in a couple of minutes when Senator Dodd speaks. Just as Sisyphus was challenged with rolling a boulder up a mountain, we are challenged with an ever-changing world. We can’t predict exactly how our profession and the factors affecting it will change. We can, however, be confident of one thing: Change will continue. While the questions we ask now differ from those we would have asked 50 years ago, the answers remain elusive. How will qualifications and professional roles change, not just for actuaries but for para-actuaries and actuaries in yet-unknown roles of the future? How will the public policy landscape change after next week’s election and beyond, and what political and regulatory changes outside our borders will affect us? What technological changes and new risks will emerge decades from now, even as we struggle presently with Big Data, automated cars, and other new technologies? How will insurance regulation and financial risk evolve with new models of shared, unit-based, and on-demand insurance, and virtual financial instruments like Bitcoin?

So many questions. To which, for now, our imperfect reasoning can only guess at the answers. To get on with our work, rolling the boulder up the mountain and growing as a profession, we can’t and don’t have to be paralyzed by uncertainty. We can accept our limitations, and recognize the good news that we don’t have to be perfect thinkers about the future to meet its challenges and embrace its opportunities. What we do need is an ability to effectively respond to whatever changes may happen, both on an individual level and as a profession. I believe this means recognizing that the era of actuary as mere technician is over. More than ever, actuaries need to apply advanced business skills and deep understanding of current developments—not just technical expertise—in dealing with clients, stakeholders, and the public. It has been said that: “The wisdom of the world resides on bookshelves: …read by few …understood by fewer, and …acted upon by few who read and understand." Many of us fall into this category of being able to read and understand new concepts, but being reluctant to act on them. We must challenge ourselves to become more like thermostats than thermometers. In a room, a thermometer is able to precisely inform someone of the exact temperature of the room. But, if the room is too hot or too cold, the thermometer is not able to influence the environment. A thermostat, on the other hand, is similar to a thermometer in its ability to precisely measure the temperature of the room. And, the thermostat is able to influence the temperature of the room by sending a signal to the heating or cooling system if the temperature has varied from the desired level. We have the ability to be like thermostats in our business environment. By understanding complex issues, we can choose to influence the environment regarding these issues and thus impact the outcome of situations. We must avoid being like thermometers that understand the issues but do not influence the environment with this understanding. We must move the idea of professionalism from an abstract concept to a practical application. That’s where the Academy comes in. The Academy provides us with the ability to adapt to change and act—in a structured, deliberative, and timely way. The founders of the Academy were truly visionary in understanding that we need an ongoing organization that performs this essential role for the whole profession.

The Academy is the fulcrum of our profession, informed by the past so that we can smartly prepare for the future. We do this through our vital work with policymakers and the vital and fundamental structures for actuarial professionalism established here, and through our interface with members across practice areas and with the public. The public policy and professionalism questions and changes that the Academy reports on, responds to, and helps shape transcend technical changes in practice. They involve matters of the public interest, ethics, sound policy, evolving norms, and other factors. The Academy is where actuaries in our country deliberate on the big-picture issues and what they mean for successful actuaries and a successful society. I want to thank each of you for being here—being part of the link to the future of our profession. Your attendance reflects that you already understand the valuable role of the Academy in ensuring a deep and informative connection between actuaries and public policy and professionalism experts. I look forward to the remaining time we have together here in Washington and to the year ahead. With our committed leadership and volunteers, I am confident that we’ll have a productive year of working together to evaluate and prepare for the changes affecting us. I encourage all of us to continue to roll the boulder up the mountain and to be thermostats, influencing our environment. And I know we’ll do right in the Academy as the living link of our profession by “paying our knowledge forward” to future generations. Thank you. ()

Check out the latest issue of Contingencies. The cover story, “Generational Shift,” discusses how aging Millennials will challenge U.S. health and retirement systems—and transform them in the process. Other features investigate the risk considerations of New York’s new paid family leave program; a look at the opportunities and challenges of accelerated underwriting; plus an exploration of how the Actuarial Standards Board helps support the infrastructure of U.S. actuarial professionalism. (November 01, 2016)

Academy President Tom Wildsmith looks at the foundation of the Actuarial Standards Board (ASB) in “The Academy and the Web of Professionalism,” part three of his presidential papers, focusing on the development of actuarial standards of practice (ASOPs). Defining best practices—and preserving the public’s trust through a flexible, self-regulatory system—is and always has been at the at the heart of the ASB and ASOPs, and the ASB’s integrity and transparency will ensure that appropriate ASOPs serve the profession and the public well into the future, Wildsmith writes. (Contingencies, November/December 2016) (November 01, 2016)