The American Academy of Actuaries’ Committee on Qualifications (COQ) has approved the release of a second exposure draft of the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States (USQS). This document is intended to replace the Qualification Standards (including Continuing Education Requirements) for Actuaries Issuing Statements of Actuarial Opinion in the United States that took effect Jan. 1, 2008. The comment deadline for the second exposure draft is Aug. 20, 2021.
The first exposure draft was issued on Sept. 2, 2020, with a comment deadline of Oct. 30, 2020. The COQ received 152 comment letters, indicating that many members of the actuarial profession care strongly about the USQS and the standards they set for individual actuaries. The COQ thanks everyone who submitted comments.
Actuaries did not confine their comments just to the changes set forth in the exposure draft, but took the opportunity to comment on the USQS in total. The comments received were thoughtful, came from actuaries from a variety of practice areas, and covered a wide range of topics, including area of practice, basic education, specialty tracks and examinations, enrolled actuaries, and diversity, equity, and inclusion.
The COQ carefully considered the comments and made changes as reflected in this second exposure draft. The Academy Board of Directors reviewed this draft and provided comments, which were taken into consideration in developing this exposure draft.
The Transmittal Memorandum at the beginning of the second exposure draft describes the significant changes proposed and asks for comments from members of actuarial organizations governed by the USQS and all interested parties, including the public.
How to Submit Your Comments
The Committee accepts comments by electronic means.
The required form is electronic.
Please provide section or paragraph references for specific comments.
Comments will be posted in the order that they are received.
The Committee plans to post all signed comments received to its webpage to encourage transparency and dialogue. Unsigned or anonymous comments will not be considered by the Committee nor posted to the webpage.
The comments will not be edited, amended, or truncated in any way.
Comments will be removed when final action is decided by the Academy to this process such as revising the U.S. Qualification Standards in accordance with Appendix 3 to the U.S. Qualification Standards.
The comments submitted will be accessible to the public. The Academy disclaims any responsibility for the content of the comments posted, which are solely the responsibility of those who submit them.
Email Submission
If you wish to comment, please send a message to USQSComments@actuary.org. You may include your comments either in the body of the message or as an attachment prepared in any commonly used word processing format. Please do not password protect any documents.
Comments should be submitted no later than August 20, 2021.
I’m going to pull out some quotes from the document – this relates to the comment letters from the earlier draft.
Area of practice—Several commentators said it was unclear what was meant by “area of
practice,” which is referenced in several sections of the current USQS. The COQ notes that
section 1.4 states, “The traditional areas of actuarial practice are casualty, health, life, and
pension.” This language appears in both the 2008 USQS and this exposure draft. The lack of
clarity relates to references or circumstances when the same terminology “area of practice” was
used to refer to an area that may be more specific than these four practice areas. In response to
the comments, references to “area of practice” in sections 2.1(d), 2.1(d)(1), 2.1(d)(2), 2.1(d)(3),
and 2.1.1(b) where the COQ recognized more specificity was needed, were revised.
Specialty tracks and examinations—The COQ revised the language to clarify that section
2.1(d) sets qualifications for issuing SAOs “on a particular subject within an area of actuarial
practice,” rather than “an area covered by a specialty track offered by the Society of Actuaries or
in an area of practice covered by the exams for the Casualty Actuarial Society or the American
Society of Pension Professionals and Actuaries.” The goal was to keep this section of the U.S.
Qualification Standards clearly focused on the basic education component in a way that was both
sufficiently particular about basic education as well as sufficiently general so as not to become
outdated solely because of a change in the name of a specialty track or the addition of a
particular specialty track offered by a basic education provider. In addition, the applicability of
this section to actuaries with CAS credentials was unclear because the CAS does not currently
offer specialty tracks.
Diversity, Equity, and Inclusion (DE&I)—Many commentators requested that the USQS
clarify that professionalism topics include DE&I, and several of those commentators suggested
that DE&I continuing education be required. The COQ considered all these comments and
agreed with the need to clarify that some DE&I topics could be considered professionalism CE.
Thus, Frequently Asked Question #48 has been updated to clarify that DE&I topics may be
considered either general business skills CE or professionalism CE depending upon the content
of the particular CE offering. This change immediately addresses some of the comments received,
with the understanding that the FAQ may be further amended if appropriate upon final approval
of an updated USQS.
New Requirement for CE related to Bias Topics—This second exposure draft includes a new
one-hour minimum CE requirement dedicated to what is referred to as “bias topics.” Section
2.2.6 specifies that bias topics “include content that provides knowledge and perspective that
assists in identifying and addressing biases that may exist in data, assumptions, algorithms, and
models that impact Actuarial Services. Biases may include but are not limited to statistical,
cognitive, and social biases.” The COQ included bias topics in the CE requirements to focus on a
topic that provides knowledge and perspective that is relevant to the Actuarial Services that form
the basis of an SAO.
Should be interesting to see what people will come up w/ for bias-related CE.
Of course, in the statistical sense, a biased estimator is one for which the expected value differs from the value of the thing you’re trying to estimate.
I will give you a TOC, so you can decide what to read:
pp 2-6 – background & summary of comment letters from first draft
6-10 – changes made in this draft from prior draft
11 – committee members
12-13: intro to new QS
14-19: general QS (including CE requirement)
20-21: specific QS
22: change in practice/field
23: acknowledgement statement
24: recordkeeping
25-30: Appendix 1 - examples of SAOs
31: Appendix 2 - alternative basic qual
32-36: App 3 - procedures for adopting new QS
37-38: App 4 - procedures to determining specific QS needed
39: App 5 - recordkeeping form
I went to a session last year about bias in measuring expected losses, and how the "red lines"of the past affect today’s rates. It was quite good. I’m sure there’s more where that came from.
Amended Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States Released
To:
Members of Actuarial Organizations Governed by the Qualification Standards of the American Academy of Actuaries
—
—
From:
The Board of Directors of the American Academy of Actuaries & The Committee on Qualifications of the American Academy of Actuaries
Re:
Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States
The amended Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States (U.S. Qualification Standards or USQS) promulgated by the American Academy of Actuaries (the Academy) are now available. This document supersedes in its entirety the Qualification Standards (including Continuing Education Requirements) for Actuaries Issuing Statements of Actuarial Opinion in the United States that took effect January 1, 2008. The amended U.S. Qualification Standards take effect January 1, 2022, indicating that this document applies to actuaries issuing statements of actuarial opinion starting on January 1, 2023, and that such actuaries will need to meet the continuing education (CE) requirements before issuing any Statement of Actuarial Opinion (SAO) in 2023.
The Academy will host a webinar on Dec. 20 at noon EST to discuss the amended standards and the Committee on Qualifications is working to update the Frequently Asked Questions. Registration for the webinar will open soon.|
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I saw the 1 hour bias topics requirement made it in — any other major changes or just the stuff around generalizing the definition of qualified actuary?
b. Bias topics include content that provides knowledge and perspective that assist in
identifying and assessing biases that may exist in data, assumptions, algorithms,
and models that impact Actuarial Services. Biases may include but are not limited
to statistical, cognitive, and social biases.
Statistical bias means when the expected value of a statistical estimator is not the “real” value of what you’re trying to estimate.
Bias means a lot of different things, depending on context.
Ok, reading through, the bias topics looks like the only major change.
CE Requirements are:
30 total CE hours per year
At least 6 credits in organized activities
At least 1 in bias topics (which I think is a subset of professionalism?)
At least 3 in professionalism
At most 3 in business
FWIW, if you wanted to, you could have all 30 CE hours in professionalism in organized activities on bias topics, and that would fulfill requirements.
I tend to think this confusion leads to real errors.
Bias in the statistical sense is a practically inevitable consequence of learning. It can be good or bad depending on the environment.
Bias in the ordinary sense of the word is always bad.
So as I understand the words, statistical bias that is an inevitable consequence of the finite nature of our brains can also lead to racial bias in our everyday lives or in our conceptual understanding of things. Different biases also allow us to turn 2D images into 3 dimensional concepts, and help us immensely.
Its not clear to me how this learning objective distinguishes between the two. For example, random effects models or actuarial credibility have classical statistical bias built into them from a particular perspective. Does studying these meet this objective? Probably not by intent, but maybe so by wording.
Gah. I really wish they had a minimum in “specific” topics, and not a maximum in “business”. I just feel like it gives the wrong message that there’s a max, when many actuaries would be more effective with more business training. Sure, you shouldn’t have only business, but this just feels like the wrong way to construct the requirements.
