The people who help U.S. insurance insurers and pension plans peer into the future need a broader education and more attention from their disciplinary board.
Members of the Critical Review of the U.S. Actuarial Profession task force have presented those conclusions in their new CRUSAP report, which makes recommendations about ways the U.S. actuarial profession can address the risks and opportunities facing actuaries.
The American Academy of Actuaries, Washington, set up the 7-member task force in May 2005, in an effort to strengthen the actuarial professional and make sure that it meets the needs of the public.
The task force and its advisory panel include representatives from the major U.S. actuarial groups and many other for-profit, nonprofit and governmental organizations.
Fred Kilbourne, the task force chairman, is an independent consulting actuary in San Diego.
Other task force members include Bob Collett, a former chief executive of Milliman Inc., Seattle, and Terri Vaughan, a former Iowa insurance commissioner and former president of the National Association of Insurance Commissioners, Kansas City, Mo.
The task force members drew in their report on results from more than 80 interviews and 1,400 survey responses.
One concern is a “widespread perception” that the Actuarial Board for Counseling and Discipline, Washington, is getting fewer complaints than it should because clients and others are reluctant to file complaints, the task force members write.
The actuarial profession should consider addressing this issue by setting up “automatic triggers” that would lead to reviews of an actuary’s work, the task force members write.
The actuarial professional also should consider seeking legislation to protect ABCD whistleblowers and permit the ABCD to share information with state and federal regulators, according to the task force members.
The actuarial professional also should look into the possibility of establishing a “joint disciplinary process” for the profession that would be independent of the individual actuarial organizations. A new joint disciplinary body or ad hoc joint committees could make disciplinary decisions for all actuarial organizations, and actuaries could appeal to their own organizations in connection with any decisions involving suspension or expulsion, task force members write.
The task force members also:
- Call for the actuarial profession to accept the “nature and value of principles-based standards.”
- Urge actuaries to expand their horizons to include areas such as retirement planning for individuals, health care analysis, and analysis of issues such as tort reform and terrorism risk.
- Recommend that actuaries get more education in areas such as financial economics and international trade.
About 65% of the CRUSAP survey participants said actuarial education is good or excellent, but some advocates of change say U.S. actuarial education now is geared more toward building technical expertise rather than to providing a broad education and turning out actuaries with a diverse set of skills.
Actuarial groups have to move beyond relying on exams and annual seminars and make more use of university programs and Web classes, the task force members write.