T he N ewsm o nthl y
2009 Enrolled Actuaries Meeting
Profession Explores PPA Retirement Questions
ore than two and a half years
o f the
Bruce Gaffney, chairperson of the Joint Program Committee for the 2009 EA Meeting, addresses attendees. See EA Meeting, Page 4
White Paper, Hill Meetings Advise Policymakers
Downs Moves Upstairs
Academy general counsel appointed interim executive director
IRS gives temporary OK to liability calculation method
See systemic risk, Page 5
Academy financial reporting committees hold first joint meeting
Webcast guides actuaries through international standards
A ct u aries
defend itself against the corporate collapses of the past year, the Academy has been in regular contact with Congress to address systemic risk in federal financial regulation. As a result of several meetings on Capitol Hill, the Academy’s Risk Management and Solvency Committee and the Financial Regulatory Reform Task Force released a white paper, Concepts for Successful Regulation of Systemic Risk, outlining principles for systemic risk regulation. While some believe that certain financial crises are unpredictable and inevitable, the Academy groups assert that if the risks that cause certain crises are better recognized, crises can be better managed. The paper centers on three requirements for effectively regulating systemic
risk: identification of risks, measurement and monitoring of risks, and implementing risk management strategies. In identifying risk, the document outlines the definition and causes of systemic risk. “A new systemic risk regulatory function should provide early warnings to functional regulators and policymakers on the existence and impact of risks to the financial system, such as the risks created by large or rapidly increasing excess leverage, illiquidity, and concentration,” the paper says. Monitoring certain risks, the paper argues, should be a primary responsibility of the systemic risk regulator. The critical elements contributing to systemic risk include, among other items, leverage in the economy and within institutions, growth in derivatives markets, and market data.
hile the financial industry seeks regulatory solutions to better
A cadem y
Academy Spells Out Systemic Risks
since the passage of the Pension Protection Act (PPA), pension actuaries still have a number of questions that range from regulatory compliance to the long-term sustainability of the pension system the act was designed to protect. Those questions—and many answers— were among the topics discussed at the 2009 Enrolled Actuaries Meeting March 30-April 1 in Washington. In the meeting’s opening remarks, Conference of Consulting Actuaries President Lance Weiss, a consulting actuary with Deloitte in Chicago, highlighted an important challenge facing the profession. As the future of defined benefit (DB) plans continues to prove more uncertain, Weiss encouraged actuaries to look beyond providing numbers and to think about the problems their clients are facing and how their suggestions can add value. “The meltdown of the markets is pushing even our most healthy clients to question whether to maintain and defend not only their DB plans but also their DC (defined contribution) plans,” he emphasized. Weiss’ challenge served as a prompt for the meeting’s first general session, which focused on thinking beyond the double-edged sword of minimum funding rules, which, though clear, could lead to funding volatility. The session’s
M A Y 2 0 0 9
c a l e n d a r MAY 3-6 CAS spring meeting, New Orleans 19-20 Seminar on Actuarial Guideline 43/ VACARVM (Academy, SOA), Denver 20 Council of U.S. Presidents meeting, Washington 21 Academy Board of Directors meeting, Washington 27-30 IAA meeting, Tallinn, Estonia
JUNE 13-16 NAIC summer meeting, Minneapolis 25-26 CIA annual meeting, Halifax, Nova Scotia, Canada
JULY 8 Audiocast on the ABCD and the disciplinary process (Academy, CCA) 9-12 NCOIL summer meeting, Philadelphia 23 Council of U.S. Presidents meeting, Charlottetown, Prince Edward Island, Canada 23-26 NAAC meeting, Charlottetown, Prince Edward Island, Canada
Academy News Briefs Downs Heads Academy Staff
he Academy’s Executive Committee appointed Mary Downs
as interim executive director of the Academy. Downs has been the Academy’s general counsel since 2006 and will continue to serve in that position. “The Academy leadership congratulates Mary and is confident that her appointment represents a smooth and productive transition that will keep the Academy steadily on course toward achieving its goals,” said Academy President John Parks. The appointment was effective April 7, a week after former Academy executive director Grace Hinchman resigned to pursue other interests.
5 Academy Executive Committee meeting, Minneapolis
SEPTEMBER 14-15 Casualty Loss Reserve Seminar (Academy, CAS, CCA), Chicago 21-24 NAIC fall meeting, Washington
OCTOBER 15-18 NAAC meeting, Colorado Springs, Colo. 18 Council of U.S. Presidents meeting, Colorado Springs, Colo. 20 Academy Board of Directors meeting, Washington 25-29 SOA annual meeting, Boston 26 Academy annual meeting, Boston
NOVEMBER 1-4 ASPPA annual conference, National Harbor, Md.
Roll Out the Red Carpet The Society of National Association Publications recently announced the winners of the 29th annual Excel Awards. The Update took home a bronze award for news writing, and Contingencies won a silver award for cover art. The Academy will receive the awards at the Excel Awards Gala on June 4 at the Capitol Hilton in Washington.
1-4 CCA annual meeting, Tucson, Ariz. 9-12 Life and Health Qualifications Seminar (Academy, SOA), Arlington, Va. 12-15 IAA meeting, India 15-18 CAS annual meeting, Boston 19-23 NCOIL annual meeting, New Orleans
DECEMBER 5-8 NAIC winter meeting, Honolulu Links to documents underlined in blue are included in the online version of this issue at www.actuary.org/update/ index.asp
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Call for Papers Planning is underway for the Society of Actuaries’ (SOA) fourth triennial international Living to 100 Research Symposium, which will take place January 2011 in Orlando. Thought leaders from around the world will once again gather to share ideas and knowledge on aging, changes in survival rates and their impact on society, and
observed and projected increases in aging populations. The SOA encourages anyone interested in preparing a paper for the symposium to get an early start on pursuing the research and analysis. The SOA is looking for high-quality papers that will advance knowledge in the important area of longevity and its consequences. Please view the topic list found in the call for papers. Questions may be directed to Ronora Stryker, SOA research actuary, at rstryker@ soa.org or email@example.com. Addressing Equivalence The National Health Policy Forum invited Academy Senior Health Fellow Cori Uccello to give a briefing on actuarial equivalence April 7 in Washington. Her presentation was delivered to senior Hill staff as part of
the forum’s education series on health reform. Actuarial equivalence considerations are an important part of the health reform discussion, and Uccello’s presentation built on the information provided in last year’s Academy Capitol Hill briefing on the topic. ASB Survey The Actuarial Standards Board (ASB) has recently developed a survey to seek input from members of the actuarial profession practicing in the U.S. The ASB will use the information gathered from the survey, in conjunction with the responses to the recently issued Request for Comments on Actuarial Standard of Practice (ASOP) Content and ASB Procedure, to determine how the ASB might serve the public interest and the U.S. actuarial profession better. The aims of the survey continued on Page 3 ➜
A c t u a r i a l Up dat e M ay 2 0 0 9
➜ continued from
are to gauge the effectiveness of ASB communication with members, to determine if the ASB process of developing and reviewing ASOPs is meeting the needs of the public and the profession, and to gain insight into how the ASB is viewed within the profession. Responses will be reviewed by an independent research firm, The Haefer Group, Ltd., and reported to the ASB. To complete the survey, please visit the ASB website. In The News A March 6 Insurance Day article focused on written testimony, submitted to a congressional subcommittee by the Academy’s Risk Management and Financial Reporting Council, supporting the establishment of a governmental regulator to prevent systemic risk from destabilizing the U.S. economy. The testimony was signed by the Academy’s vice president for risk management and financial reporting issues, James Rech, a consulting actuary with AmeRisk Consulting in Phoenix. Rech, who was attributed in the article, said that a systemic risk regulator can effectively monitor financial risks and protect the public, provided that the regulator implements actuarial principles and concepts. After the IRS issued Notice 2009-22 on asset valuation methods, Academy Senior Pension Fellow Frank Todisco was quoted in several trade articles. In a March 18 Pensions & Investments article, republished by Workforce Management on March 20, he said that the guidance was welcome news to plan sponsors who could change valuation methods in 2009 without w w w . a c t u a r y. o r g
applying for approval. Todisco said in a March 18 Bureau of National Affairs article that the new rule does not allow plan sponsors to switch asset valuation methods at will, but it does allow employers to switch methods in 2009 to take advantage of the new asset smoothing rule in the Worker, Retiree, and Employer Recovery Act of 2008. Todisco also provided comment on the Federal Reserve’s recently released “Flow of Funds Accounts of the United States” report in an article in the March 23 issue of Pensions & Investments. He said that all three retirement systems—corporate and public defined benefit pension plans, as well as private defined contribution plans—took hits in 2008 as a result of the economic downturn. They are in deficit relative to the amount of promised benefits or beneficiaries’ retirement needs. Todisco was also on hand to respond to reporter inquiries during the 2009 Enrolled Actuaries Meeting. For example, Todisco was cited in an April 1 Bureau of National Affairs article regarding preliminary guidance from the IRS on yield curve selections. He said that plan sponsors now have considerable freedom to decide how to value their pension liabilities and assets but that it remains to be seen how much leeway there will be beyond 2009 to switch from the options available now. Todisco said that employers will have to consider that before making the decision for 2009. A March 23 National Underwriter Life & Health report discussed a C3 Phase III proposal by the Academy’s C3 Life and Annuity Capital
media relations activity report — first quarter, 2009
First Quarter, 2009 Three-Year Quarterly Average
26 Interviews 78 194 Placements
Note: A request is a media inquiry for more information (e.g., statistics, comments, work products, etc.) or for media credentials to an Academy event. An interview occurs when the Academy is able to provide a spokesperson to meet a media request. When an interview is fulfilled, it is no longer tallied as a request. A placement is an article containing an Academy reference, quote, or attribution from an Academy spokesperson or the placement of an Academy-produced letter to the editor/op-ed. A three-year quarterly average is the statistical mean of the past 12 quarterly totals for each category (requests, interviews, and placements).
Work Group. The National Association of Insurance Commissioners’ (NAIC) Life RiskBased Capital Working Group announced during the NAIC spring meeting that it would expose for comment the proposal, which outlines a single C3 framework that covers interest rate risk and market risk for life insurance. Academy Public Pension Plan Subcommittee Chairperson Ken Kent, former vice president of the Pension Practice Council and consulting actuary for Cheiron in McLean, Va., was quoted in an article in the April issue of the Chicago Gazette on the pros and cons of public pension plan consolidation. He said that combining plan systems would lower administrative fees and eliminate redundant investment expenses but that board members would lose some leverage in decision making and employees may be uneasy with the change. “Members of a well-funded plan may find it challenging to see their assets comingled
with a less-funded plan,” Kent said. Several months after election fever garnered Contingencies a mention on “Good Morning America,” another national buzz brought the Academy’s flagship magazine onto the airwaves: March Madness. In response to his article in the March/April issue touting three Georgia Tech professors’ predictive model for filling out NCAA Tournament brackets, Academy Assistant Director for Communications Andrew Simonelli was featured on nearly a dozen radio shows around the country to talk about the article. The audiences, including stations in Memphis, Baltimore, and Tucson, Ariz., ranged from general morning news to sports talk radio. And if they followed the formula, they all correctly picked North Carolina to win. To find out about other actuaries in the news or for external links, visit the Academy’s newsroom, http://actuary.org/ newsroom/news.asp.
A c t u a r i a l Up dat e may 2 0 0 9
EA Meeting, continued from page 1
Academy President John Parks (right) talks with general session speaker David Godofsky.
speakers encouraged attendees to consider long-term strategies to implement less volatile funding, keeping in mind the potential consequences of large funding surpluses. First general session presenter Michael Clark, an actuary with Principal Financial Group in Pittsburgh, pointed out the difficulties of developing a real funding policy under PPA due to rules such as restrictions and forced waiving of carry-over balances and prefunding balances, complexities that inhibit a plan’s ability to use the balances when the plan needs them the most. “The rules have been made so complex with trips, traps, and trapdoors, we are forced again to game the system,” Clark said, referring to rules that make sponsors fund to market value ratios instead of long-term benefit security. He stressed the need to create a rational system to foster long-term DB plans. “The longer we play the game with these kinds of rules, the more likely the sponsor will pick up the dice and let the participants make their own way.” Fellow presenter Brian Donohue, managing director for JPMorgan Compensation and Benefit Strategies in Chicago, reiterated that DB plans are now in “survival mode” and that actuaries don’t have time in their day-to-day battle to focus on “high-falutin’” discussions of funding policy. The second general session continued with the theme of uncertainty, as a panel of speakers discussed their views on topics that do not currently have clear guidance. Others sought opinions on identifying responsibilities of enrolled actuaries, such as timing of the AFTAP certification and whether an actuary should ask the plan sponsor to tell him or her when the certification should be issued. Several of the topics boiled down to actuarial discretion on what constitutes a “reasonable interpretation” in the absence of a specified best interpretation. For instance, while Proposed Reg. 430 requires funding balance elections to be made by the end of the plan year, the group explored whether it would be reasonable to waive funding balance for the 2008 plan year by using a formula approach to determine the amount waived. The same principle also applied for quarterly contributions. While David Godofsky, attorney with Alston & Bird LLP in Washington and an actuary, pointed out that when he writes a check for a bill, or to the IRS, he can’t write “amount to-be-determined,” he w w w . a c t u a r y. o r g
agreed with the other panelists that allowing formulas would be better from a public policy perspective. “What are the potential issues when using a formula? Who loses? It’s good public policy,” reiterated presenter Tonya Manning, chief actuary for U.S. retirement with Aon Consulting in Winston Salem, N.C. That critical question—what makes good public policy—was explored further in the third general session, which featured speakers familiar with the legislative process. They discussed the types of retirement reform proposals likely to be seriously considered by the current Congress. With the Worker, Retiree, and Employer Recovery Act of 2008 already making specific temporary implementation changes to PPA funding calculations—and with PPA itself less than three years old—panelists agreed that Congress may be suffering from “pension fatigue.” Consequently, motivation for opening up pension law to grant further funding relief to employers may not be particularly strong for the current Congress, especially as new issues like health care reform loom on the horizon. And any potential additional temporary relief measures would likely come “with strings attached,” according to James Delaplane, a partner in the Washington office of law firm Davis & Harman. “I think people on the Hill don’t want to reopen PPA’s principles,” Delaplane said. “Democrats might come up with different funding policies, but it doesn’t mean they want to reopen PPA.” Some of those different policies discussed were a reduction in vesting requirements for a more mobile workforce, as well as changes to distribution rules such as steering DC plans away from default lump-sum distribution. Another issue that came up for debate was pension reversion, where companies with a shortage of liquid assets could draw money from a well-funded pension plan with a discouraging but manageable tax penalty. The idea was proposed but rejected in the formulation of PPA. Though it could potentially encourage employers to better fund their pension plans without the fear that the money is gone forever, multiple panelists acknowledged the political difficulty of a law that would appear to voters as if it allows companies to “raid the cookie jar.” Reversion was an issue that came up again in the two-day Pension Symposium following the EA Meeting. For a recap of the symposium, and for further coverage on EA Meeting sessions, look for the summer issue of the Enrolled Actuaries Report.
t the start of the second general session, the Treasury Department’s Harlan Weller provided an answer to one of the questions originally slated to be discussed. Weller, an Academy member, announced that the Internal Revenue Service will not challenge the use of a monthly corporate bond yield curve for determining pension funding liabilities. The special online edition of the IRS’ Employee Plan News clarified that it is a reasonable interpretation of pension funding rules to allow actuaries to use the monthly corporate bond yield curve for January 2009 or four look-back months to calculate future pension liabilities for calendar-year plans with a Jan. 1, 2009, valuation date. The announcement came as the IRS continues writing final regulations under Section 430 of the Internal Revenue Code.
A c t u a r i a l Up dat e may 2 0 0 9
R isk M anagement & F inancial R eporting n ews
Academy Coordinates Cross-Council Efforts
s risk management and financial reporting
remain topics of conversation on Capitol Hill (see Page 1), the Academy’s five financial reporting committees met in Chicago in late March to discuss upcoming projects and crosscouncil coordination. The meeting was the first one that joined all the Academy’s financial reporting committees, including members from the Risk Management and Financial Reporting Council’s Financial Reporting Committee (FRC), the Casualty Practice Council’s Committee on Property and Liability Financial Reporting (COPLFR), the Health Practice Financial Reporting Committee (HPFRC), the Life Financial Reporting Committee (LFRC), and the Pension Accounting Committee (PAC). One priority for the meeting was to discuss outreach to other organizations, including organizing agenda items for the FRC’s participation in an insurance experts panel with the American Institute of Certified Public Accountants in late April. There was also a discussion of the International Accounting Standards Board’s (IASB) insurance contracts project and the IASB timetable of issuing a final standard on the issue in 2011. The committees also updated one another on their activities. Rowen Bell, chairperson of the FRC, reported on the progress of two comment letters to the IASB and the Financial Accounting Standards Board (FASB). The FRC drafted comments on the IASB/ FASB financial statement presentation paper that were submitted in April. The committee is also working on a response to the IASB/ FASB revenue recognition paper. The subgroup working on the revenue recognition paper will be holding a face-to-face meeting in late May at the Academy office.
Marc Oberholtzer, chairperson of COPLFR, gave a casualty report that mentioned the publication of an issue brief on reserve ranges. Future COPLFR projects include working with the Actuarial Standards Board (ASB) on developing an actuarial standard of practice on risk transfer for property and casualty reinsurance contracts and developing a practice note on the National Association of Insurance Commissioners’ (NAIC) model audit rule. Leonard Reback, vice chairperson of LFRC, reported that his committee is updating a practice note on guaranteed minimum benefits in light of Financial Accounting Standard No. 157, Fair Value Measurements. The group is also working on two practice notes, one on market-consistent embedded values and another on International Financial Reporting Standard No. 4, Insurance Contracts. On the health side, Shari Westerfield reported on HPFRC’s ongoing projects. The committee alerted Academy membership of the significant changes to the health actuarial opinion instructions that were exposed at the NAIC’s spring meeting in March. The committee plans to issue a guidance document on handling the new rules later this summer. The committee is also updating practice notes on the actuarial certification of small-group health plans and large-group medical business practices. Finally, Steve Alpert, chairperson of PAC, informed the meeting attendees that the committee held discussions with the Securities and Exchange Commission this past fall on the temporary spike in pension liabilities due to the economic downturn. Before adjourning, the committee members discussed ideas for cross-council cooperation and agreed to continue the joint meetings annually.
Systemic Risk, continued from page 1 The paper lists three levels of severity in the process of managing systemic risks. It also further defines the roles of a systemic risk regulator, which fall into four categories: establishment of systemic risk tolerance, actions to discourage the growth of risks, actions to encourage the shrinkage of risks, and actions to increase the resilience of the system. In addition, the paper identifies the role of the actuary and cites the experience actuaries have in managing risk within the financial services industry. In April, Academy volunteers met with staff from the Senate Banking Committee and House Financial Services Committee to present and discuss the white paper. Those volunteers included Nancy Bennett, Academy senior life fellow; David Ingram, member of the Academy’s Risk Management and Solvency Committee; David Sandberg, chairperson of the Academy’s Risk Management and Solvency Committee; and Henry Siegel, vice chairperson of the w w w . a c t u a r y. o r g
Academy’s Risk Management and Financial Reporting Council. That visit was a follow-up to the ones made by Bennett, Sandberg, and Siegel earlier in March, when the group spoke with different staff members of the same committees to present its working outline of the paper and to help direct the volunteers’ efforts in the final draft. In both meetings, the Academy members discussed the actuarial profession and its views on risk and experience in risk management. The staffs updated the Academy delegation on their respective committees’ work in systemic risk and recommended that the Academy also meet with representatives from the Federal Reserve and the Treasury Department. The paper follows written testimony on systemic risk that the Academy’s Risk Management and Financial Reporting Council delivered to the House Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises in early March.
-Tina Getachew A c t u a r i a l Up dat e may 2 0 0 9
p rofessionalism n ews
Actuarial Standards Across Borders
ctuaries who practice internationally
may need to navigate through a variety of laws and professional standards to comply with the requirements of all relevant jurisdictions of practice. In order to better understand international practice, the Academy’s Council on Professionalism sponsored its first webcast in 2009, “How Do Actuarial Standards Apply Across Borders?” The webcast, co-sponsored by the American Society of Pension Professionals and Actuaries, Casualty Actuarial Society, Conference of Consulting Actuaries, and Society of Actuaries, drew over 250 registrants and discussed methods that may be used to determine which jurisdiction’s actuarial standards of practice and qualifications may apply to an actuary’s work. Speakers on the webcast included Curtis Huntington, chairperson of the Actuarial Board of Counseling and Discipline and a mathematics professor at the University of Michigan; Mary Frances Miller, chairperson of the International Actuarial Association’s Education Committee and a senior consulting actuary with Select Actuarial Services in Nashville, Tenn.; and moderator Sheila Kalkunte, Academy assistant general counsel. As the presenters explained, defining international practice can be difficult and depends on a combination of factors, including the jurisdiction where the work was intended to be relied upon, the jurisdiction whose laws and standards the actuary referred to in completing the work product, and the stated purpose of the work product. The group covered issues related to Precepts 2 and 3 of the Code of Professional Conduct for U.S. actuaries, including sections relevant to defining international practice, as well as the International Actuarial Association’s Principles for Codes of Professional Conduct and the cross-border agreement between the five U.S. actuarial organizations and the Canadian Institute of Actuaries. Academy members can view the archived version of the webcast, as well as the speakers’ slides. For more background, interested actuaries can also read Huntington’s recent article “I’m an International Actuary?” that appeared in the March/April issue of Contingencies.
Disciplinary Notice The Disciplinary Committee of the American Academy of Actuaries (the Academy), acting in accordance with the Academy’s bylaws and under recommendation from the Actuarial Board for Counseling and Discipline, hereby expels Charles M. Lederman from membership. His activities relating to Physicians Insurance Company from 1987 to 1996 demonstrated a material violation of Sections 1 (a) and (c) of the Academy’s Guides to Professional Conduct in effect during these years and of Precept 1 of the Academy’s Code of Professional Conduct in effect during these years. The Academy’s Guides to Professional Conduct (revised in 1984 and in effect through 1991) provided, in part,
➥ Sec. 1 (a) The member will act in a manner to uphold the dignity of the actuarial profession and to fulfill its responsibility to the public.
➥ Sec. 1 (c) The member will not provide actuarial service for or associate professionally with any person or organization where there is an evident possibility that such service or association may be used in a manner that is contrary to the public interest or the interest of the profession or in a manner to evade the law. he Academy’s Code of Professional Conduct (in effect T from 1992 and beyond 1996) provided, in part,
➥ Precept 1. An actuary shall act honestly and in a manner to uphold the reputation of the actuarial profession and to fulfill the profession’s responsibility to the public.
health briefs casualty briefs
➥ Laurel Kastrup, senior manager for KPMG in Dallas, and
➥ Sarah McNair-Grove, an actuary for the Alaska Division of Insurance in Juneau, and Franco Lepera, an actuary with North American Specialty Insurance Co. in Manchester, N.H., have joined the Academy’s Property and Casualty Risk Based Capital Committee.
Lawrence Scott, consulting actuary for Actuarial Risk Management in Austin, Texas, have joined the Academy’s State Long-Term Care Principle-Based Work Group. ➥ Timothy Luedtke, principal and consulting actuary for Navigator Benefit Solutions in Berwyn, Pa., has joined the Academy’s Federal Health Committee.
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A c t u a r i a l Up dat e may 2 0 0 9
➥ Mark Olleman, an actuary with Milliman
Actuarial Update Associate Editors
William Carroll Patrick Collins Andrew Erman Rade Musulin Geoffrey Sandler Donald Segal Editor
Tim Dougherty (firstname.lastname@example.org) Design and Production
BonoTom Studio Inc. Marketing and publication production manager
American Academy of Actuaries President
John Parks President-Elect
Bruce Schobel Secretary-Treasurer
Andrea Sweeny Vice Presidents
Al Bingham Thomas Campbell Gary Josephson James Rech Kathleen Riley Thomas Terry
The Academy is looking for nominations for the 2009 Farley Award, which is given annually to an actuary who has provided sustained exemplary volunteer service to the profession. With the exception of current Academy officers, all Academy members are eligible for the award. Past Academy presidents are eligible for consideration only for the volunteer work they have done after completing their terms of office.
For more information, visit the Academy website. Nomination Deadline: July 1
in Seattle, joined the Academy’s Public Plans Subcommittee. ➥ Michael Peskin, an actuary in New York, has joined the Academy’s Social Insurance Committee.
risk management briefs
➥ Joining the Academy’s Financial Reporting Committee are Steve Alpert, principal with Mercer in New York, and John Steele, consulting actuary for Watson Wyatt Worldwide in Stamford, Conn.
➥ Joining the Academy’s Life Financial Soundness/Risk Management Committee are Alice Fontaine, president of Fontaine Consulting LLC in Cedar Park, Texas, and Mary Bahna-Nolan, director for PricewaterhouseCoopers in Chicago. Bahna-Nolan is also joining the Academy’s Life Products Committee and the Academy’s Life Capital Adequacy Subcommittee. ➥ Sheldon Summers, chief actuary for the California Department of Insurance in Los Angeles, has joined the Academy’s Annuity Reserves Work Group.
Interim Executive Director
Mary Downs Director of communications
Steven Sullivan Assistant Director for PublicAtions
Linda Mallon Executive Office
The American Academy of Actuaries 1850 M Street NW Suite 300 Washington, DC 20036 Phone 202-223-8196 Fax 202-872-1948 www.actuary.org Statements of fact and opinion in this publication, including editorials and letters to the editor, are made on the responsibility of the authors alone and do not necessarily imply or represent the position of the American Academy of Actuaries, the editors, or the members of the Academy. ©2009 The American Academy of Actuaries. All rights reserved.
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2009 Myers Service Award Do you know an actuary who has made an outstanding public service contribution? Please visit http://www.actuary. org/awards/myers.asp for more information about the Myers Award or to nominate an outstanding actuary online. You can also print out a nomination form at http://www. actuary.org/awards/pdf/myers_ nominate09.pdf. Nominations are due by July 1.
Qualification Standards Under the revised Qualification Standards, what constitutes a statement of actuarial opinion (SAO)? For purposes of the Qualification Standards, an 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.
A c t u a r i a l Up dat e may 2 0 0 9