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A MERICAN A CADEMY

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Seeking Pension Simplicity

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HREE YEARS OF LOW INTEREST RATES, low market returns, and complicated solvency rules have created a funding crisis for defined benefit (DB) pension plans in this country. In Sept. 15 testimony before the Senate Governmental Affairs Subcommittee on Financial Management, the Budget, and International Security, John Parks, the Academy’s vice president for pension issues, urged Congress to simplify the rules. “Years of almost annual amendments to ERISA have continually increased the administrative burden on those who try to maintain DB programs,” Parks said. By way of example, Parks cited 13 different amortization rules for paying off liabilities in the funding laws in IRC Section 412. Parks’ testimony found some sympathetic ears. “The whole statute has to be simplified, and maybe Parks (left) enjoys a joke with Sen. Peter Fitzgerald (R-Ill.) after the we should have some actuaries working on it this John hearing. time instead of politicians,” remarked Subcommitdeclines and plan sponsors can least afford them. The tee Chairman Sen. Peter Fitzgerald (R-Ill.) during followsuggestions included: up questioning. Parks had suggestions to alleviate maximum tax■ Increasing the tax-deductible contribution maximum to deductible contribution limitations, which currently in- reflect increases in unfunded liability and/or up to an amount hibit contributions when the economy is strong—and that will eliminate the PBGC variable rate premium. See PENSION SIMPLICITY, Page 5 require substantial contributions when the economy

Inside Airing Opinions Symposia for readers and writers of p/c statements of actuarial opinion . . . . . . PAGE 4 Letter to the Editor Actuaries and data quality . . . . . . . . . PAGE 5 Leadership Lineup New Academy officers come on board at the Oct. 27 annual meeting . . . . . . . . . . . . PAGE 6 Rugland Honored Walt Rugland is the 2003 recipient of the Jarvis Farley award . . . . PAGE 7

Academy Boosts NAIC Connections

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HE ACADEMY HELPED HOST SEVERAL EDUCATIONAL SESSIONS FOR REGULATORS and others at the NAIC’s

fall meeting in Chicago. Two opinion readers’ and writers’ symposia, moderated by Andrea Sweeny, chairperson of the Committee on Property and Liability Financial Reporting (COPLFR), and Mary Miller, a member of COPLFR, CORRECTION Some details in the August Update story “NAIC Suggests Actuaries Audit Data Quality” were incorrect. The precise responsibilities of the actuary regarding data quality were not specifically addressed by the NAIC. For a detailed explanation, turn to Page 5.

focused on reserve opinions (see story, Page 4). Lauren Bloom, the Academy’s general counsel and director for professionalism issues, and Frank Irish, chairperson of the ABCD, held sessions on actuarial professionalism for members of the NAIC’s Life and Health Actuarial Task Force (LHATF) and Casualty Actuarial Task Force. The sessions were aimed at facilitating cooperation between the Academy and regulators on a variety of issues. “This was an opportunity to get direct person-to-person contact with the regulators,” explained Irish. The Academy’s Life Capital AdequaSee NAIC, Page 4

Actuarial UPDATE

A c a d e m y Te s t i f i e s o n D B F u n d i n g C r i s i s

A CTUARIES


Calendar OCTOBER 1-2 ASB meeting, Washington 9-10 Seminar on risk management essentials

Academy NEWS Briefs

for insurers (SOA, CCA), Denver

9-10 CAS seminar on P/C mergers and acquisitions, Boston 16-18 Council of Presidents meeting, Williamsburg, Va.

22 Academy Committee on Qualifications meeting, Washington

23-24 ASB Pension Committee meeting, Washington

26-29 ASPA annual conference, Washington 26-29 SOA annual meeting, Lake Buena Vista, Fla.

27 Academy annual meeting, Lake Buena Vista, Fla.

29 CIA/SOA joint general meeting, Lake Buena Vista, Fla.

30-31 CIA general meeting, Lake Buena Vista, Fla.

NOVEMBER 2-5 CCA annual meeting, Tucson, Ariz. 5-6 Seminar on legal applications for pension actuaries (Academy, CCA), Tucson, Ariz.

5-6 Seminar on health and welfare law and regulation (Academy, CCA), Tucson, Ariz.

Promoting Actuarial Knowledge

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he following individuals are recipients of research grants from the Actuarial Education and Research Fund (AERF) in its 2003 Individual Grants Competition: ■ Philippe Artzner, University of Louis Pasteur, Strasbourg, France, for a study of multiperiod risk measurement in insurance ■ Robert Brown, University of Waterloo, Waterloo, Canada, for a study of distance education for actuarial students ■ Louis Doray, University of Montreal in Montreal, and Andrew Luong, Laval University in Quebec, for a study of inference methods for positive stable laws, with applications in insurance and finance ■ Sholom Feldblum, Liberty Mutual in Boston, for the creation of a textbook for practicing actu-

aries on workers’ compensation rate-making ■ William Leslie, ING in Hartford, Conn., for a study on transferring the financial risks of retirement ■ Jin Ma, Purdue University in West Lafayette, Ind., for a study of actuarial/ finance problems under general reserve models ■ Krzysztof Ostaszewski and Catherine Konsky, Illinois State University in Normal, Ill., for a study of actuaries’ communications skills ■ Emiliano Valdez and Andrew Chernih, University of New South Wales in Sydney, Australia, for a study of empirical estimation of dependence in a portfolio of insurance. AERF, which recently merged with the Actuarial Foundation, sponsors the competition annually to support the advancement of knowledge in actuarial science.

6 Life Capital Adequacy Subcommittee meeting, Washington

9 Academy Pension Practice Council meeting, Charleston, S.C. 9-11 Investment seminar, Toronto (CIA, SOA) 9-12 CAS annual meeting, New Orleans 10 Academy Pension Committee meeting, Charleston, S.C.

10 Academy Life Valuation Subcommittee meeting, Washington

11 Academy Casualty Practice Council meeting, New Orleans

11-14 Academy Life and Health Qualifications Seminar, Crystal City, Va.

12 CIA professionalism workshop, Toronto 19 Academy Committee on Professional Responsibility meeting, Washington

23-24 IAA council and committee meetings, Berlin

DECEMBER 1-2 Academy Executive Committee meeting, Washington

3 ABCD meeting, Williamsburg, Va. 5-10 NAIC winter meeting, Anaheim, Calif. 11 Life Financial Reporting Committee

P/C Loss Reserve Manual You

can order the 2003 edition of the Academy’s Property/ Casualty Loss Reserve Manual, now at reduced prices. The manual, published in a variety of media to allow you to choose the version that best suits your needs, will be ready for delivery in late December. Academy-member prices for the 2003 manual reflect a 50 percent discount from regular prices. See the flyer enclosed with this mailing of the Update, or contact Kasha Shelton, the Academy’s legislative manager, by e-mail (Shelton@actuary.org).

meeting, Chicago

Nice Wheels In a recent column,

15-16 ASB meeting, Washington

humorist Dave Barry lamented that his car, with its quiet, dependable engine, had all the personality of a pension actuary. But while he misses the excitement of driving his first car, a Chevrolet Vega (“which was the result of a bet among General Motors designers to see if they

JANUARY 23 Academy Board of Directors meeting, Washington

WEB INTERFACE Links to documents underlined in blue can be found at www.actuary.org/update/index.htm.

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could make a car entirely out of plastic and rust”), Barry seems disinclined to forgo the dependability of his Actuary. “So maybe instead I’ll just get a vintage Vega. I’ll keep it in a Tupperware container, which I’ll carry in my glove compartment. When I encounter other vintage-car guys, I’ll lower my window, and shake my Vega at them. That way they’ll know that, inside my Actuary, I am still cool.” CASUALTY NEWS

Lisa Besman, an actuary

with the Hartford Insurance Group in Hartford, Conn., has joined the Committee on Property and Liability Financial Reporting.

LIFE NEWS

Larry Gorski, a consult-

ant with Claire Thinking in New Berlin, Ill., and former chief life actuary for the Illinois Department of Insurance, is the new chairperson of the Life Capital Adequacy Subcommittee. Gorski is the recipient of the 2003 Robert J. Myers Public Service Award. ® Eric Carlson, an actuary with Allianz Life Insurance Co. in Minneapolis, and Tracey Polsgrove, an actuary with Hartford Life in Simsbury, Conn., are the new co-chairpersons of the Life Products Committee and new members of the Life Practice Council. PENSION NEWS

HEALTH NEWS

Leigh Wachenheim, a

principal with Milliman USA in Minneapolis, has joined the CMS Medicaid Rate Certification Work Group.

The Pension Committee prepared an analysis of a Bush administration plan to create three new types of savings accounts. The Pension Committee wrote to the Treasury Depart-


I T ’ S A FA C T

IN THE NEWS

Susan Rivera, president of ACE

INA in Philadelphia, was profiled in a cover story in the August issue of Risk & Insurance magazine. ® An article in the Sept. 1 National Underwriter on new drafts of risk-based capital and reserving proposals under consideration at the fall NAIC meeting quoted a number of Academy members, including Bob Brown, vice chairperson of the Life Capital Adequacy Subcommittee, chairperson of the C-3 Work Group, and a consultant with Cigna Retirement and Investment Services, Inc. in Hartford, Conn.; Tom Campbell, chairperson of the Variable Annuity Reserve Work Group and vice president and corporate actuary with Hartford Life in Simsbury, Conn.; Frank Dino, chief actuary for the Florida Department of Financial Services in Tallahassee, Fla.; and Bill Schreiner, a life actuary with the American Council of Life Insurers in Washington. ® John Bertko, chief actuary for Humana and a member of the Prescription Drug Coverage Work Group, authored an article on variation in the use of medical care services that ran in the July/August online edition of Health Affairs as a web exclusive. ® An Aug. 10 article in the Raleigh, N.C., News & Observer on the effects of the new CSO

w w w. a c t u a r y. o r g

tables on term insurance prices quoted Bob Potter, a life actuary for the North Carolina Department of Insurance, and Michael Taht, a principal with Tillinghast-Towers Perrin in Atlanta and a member of the Academy’s CSO Task Force. ® David Bellusci, senior vice president and chief actuary for the Workers’ Compensation Insurance Rating Bureau of California in San Francisco, was quoted in an Aug. 28 article in the San Jose, Ca., Mercury News on an overhaul of the California workers’ compensation insurance system. ® An Associated Press article in the Aug. 24 Redlands, Calif., Daily Facts on companies finding new ways to meet their pension obligations quoted Joseph Macaulay, senior consulting actuary at Diversified Actuarial Services, Inc. in Newton, Mass.

Last year, the Academy’s website logged 364,000 visits, more than double the 149,000 visits in 2000.

cer Human Resource Consulting in Chicago, is the recipient of the 2003 Outstanding Achievement Award in business from the YWCA of Metropolitan Chicago. ® Ted Wagner has been appointed vice president and chief actuary of Amerisure Mutual In-

surance Co. in Farmington Hills, Mich. He was formerly a principal consultant with PricewaterhouseCoopers in Chicago. ® Jeffery Fitch has been appointed actuary for the Principal Financial Group in Des Moines, Iowa. He was formerly associate actuary.

ON THE MOVE

Daniel Neary has been appointed

president of Mutual of Omaha and United of Omaha. He was also elected to the board of directors. Neary was formerly executive vice president of group benefit services. ® Ted Kelly, chairman, president, and CEO of Liberty Mutual Group in Boston, was presented with a 2003 New Englander of the Year award on Sept. 15. Kelly was selected for the award, presented by the New England Council, because of his commitment and contributions in his field of work and his leadership and impact on the region’s quality of life and economy. ® Anna Rappaport, a worldwide partner and principal with Mer-

JOE SUTLIFF

ment citing concerns about Rev. Ruling 2003-83, which determined two versions of aggregate entry age normal funding methods to be unreasonable under Section 4112(c)(3).

Precept 11 warns actuaries not to engage in false or misleading advertising. Has the store manager violated that precept? Let us know your thoughts and we’ll publish them on the website or in a future issue of the Update. Comments may be sent to editor@actuary.org.

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NAIC, continued from Page 1 cy Subcommittee presented a final report on its work on risk-based capital (RBC) C-3 Phase II. The report recommends implementing Phase II to address both the equity risk and the interest-rate risk associated with variable annuities, with group annuities that contain death benefit or living benefit guarantees for their equity funds, and for insurance contracts that provide death benefit floors for equity fund performance. The NAIC’s Life RiskBased Capital Working Group exposed the recommendation for comment. If the recommendation is adopted in December, it could be effective by the end of 2004. Similarly, the Joint RBC Work Group presented a letter to an ad hoc subgroup of the NAIC’s Risk-Based Capital Task Force outlining a two-phased approach to providing recommendations on possible trend tests for p/c and health RBC, and on any possible changes to life RBC. The first phase of the project, to be completed before the winter NAIC meeting in Anaheim, Calif., will define issues related to the trend test concept, while the second phase, to be completed in 2004, will recommend solutions based on an analysis of relevant data. In other action, the Variable Annuity Reserve Work

OPINION WRITERS’ SYMPOSIA IN CONJUNCTION WITH the Casualty Actuarial Society and the NAIC, the Academy recently cosponsored two opinion readers’ and writers’ symposia on the property/casualty statement of actuarial opinion. Panels made up of regulatory actuaries and opinion writers from the Academy’s Committee on Property Liability Financial Reporting (COPLFR) led discussions regarding current practice and upcoming changes in the opinion. Panel members reviewed changes effective in 2004, including the need for the actuary to disclose his or her materiality standard and the persons responsible for the data used in the opinion. They also discussed a new model law proposed by the NAIC that would create an actuarial opinion summary showing the actuary’s point estimate or range and would protect the confidentiality of this summary and the actuarial report supporting the opinion. The majority of each session was

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BY

Group reported to LHATF on its progress developing a reserve methodology that, if adopted, could be applicable to all variable annuity products. The work group is seeking specific direction from LHATF as to what regulatory form the new reserve methodology should take (as an actuarial guideline, for instance, or a model regulation, or a revision to the model standard valuation law), and whether it should be applied to all or some contracts, and the level at which reserves calculated using this methodology should be set. Similarly, a work group of the Academy’s Life Financial Soundness/Risk Management Committee presented LHATF with recommendations about reserve requirements for guaranteed minimum death benefits on variable annuity contracts that provide a reduction in death benefits equal to the amount withdrawn under partial withdrawal provisions. Among the work group’s recommendations: continue to aggressively pursue long-term solutions to reserving for variable annuity guarantees of all types, but at the same time choose an interim pragmatic solution that can be quickly adopted.

M A RY M I L L E R

devoted to discussion among the panel and audience members on various aspects of the opinion, including the interpretation of disclosures regarding the risk of material adverse deviation, the implications of differences between the appointed actuary’s reserve estimate and management’s recorded reserves, what constitutes a reasonable range and how one might derive such a range, and documentation of procedures and analysis in the actuarial report. We served as moderators for both sessions. Panelists at the Sept. 9 session, which took place as part of the Casualty Loss Reserve Seminar, were Robert Eramo, a member of COPLFR and senior consultant with Epic Actuaries in New York; Wendy Germani, senior actuary with the Texas Department of Insurance in Austin; Richard Marcks, property/casualty actuary with the Connecticut Department of Insurance in Hartford; Richard Roth, consultant with Bickerstaff Whatley Ryan & Burkhalter

October 2 0 0 3

AND

ANDREA SWEENY

in Indian Wells, Calif.; and Nancy Watkins, vice chairperson of COPLFR and principal and consulting actuary with Milliman USA in San Francisco. Panelists at the Sept. 13 session, which was held at the fall NAIC meeting, were Lee Barclay, senior actuary for the Washington State Office of the Insurance Commissioner in Olympia; Joseph Herbers, a member of COPLFR and principal and consulting actuary with Pinnacle Actuarial Resources in Bloomington, Ill.; John Purple, vice chairperson of the Casualty Practice Council and chief actuary for the Connecticut Insurance Department in Hartford; Chet Szczepanski, chief actuary for the Pennsylvania Insurance Department in Harrisburg; and Robert Wainscott, vice chairperson of COPLFR and a principal with Ernst &Young in Chicago. Mary Miller is a member of COPLFR and an actuary with the Ohio Department of Insurance in Columbus. Andrea Sweeny is chairperson of COPLFR and a principal with Casualty Actuarial Assistance in Meriden, Conn.


Letter T O T H E Editor

Pension Simplicity, continued from Page 1 Allowing all negotiated benefits to be reflected. Reflecting lump sum payments in current liability. Allowing a deduction for the current year’s pension accruals in all years. While a permanent replacement is needed for the pension discount rate (the Academy recommends a replacement benchmark using high-grade, long-term corporate bonds), Parks cautioned the subcommittee against a short-term fix that leaves the ultimate replacement rate uncertain. “While the various funding issues are studied, the period of temporary enactment should be five years, rather than two or three years, as has been proposed,” Parks said, explaining that a longer period will facilitate employers’ long-range planning. Also testifying before the subcommittee were Peter Fisher, Treasury undersecretary for domestic finance; Steven Kandarian, executive director of the PBGC; Kathy Anne Cissna, director of retirement plans for R.J. Reynolds, testifying on behalf of the American Benefits Council; J. Mark Iwry, a senior fellow at the Brookings Institution; Christopher O’Flinn, vice president of corporate human resources for AT&T and chairman of the ERISA Industry Committee; and Norman Stein, a law professor at the University of Alabama, testifying on behalf of the Pension Rights Center. In a luncheon briefing earlier the same day, Academy Senior Pension Fellow Ron Gebhardtsbauer updated approximately 60 congressional staffers, journalists, and policy-makers on the funding challenges that DB plans currently face, outlining solutions similar to those in Parks’ testimony. ■ ■ ■

Actuaries and Data Quality Either the headline “NAIC Suggests Actuaries Audit Data Quality” in the August Update is misleading, or we actuaries are becoming paranoid. It seems that the NAIC/ AICPA working group is proposing that auditors subject the data used by the appointed actuary to testing procedures. According to the article, the scope of the work performed by the auditor in testing the claims data in the course of the audit would be sufficient unless otherwise agreed among the appointed actuary, management, and the auditor. Well, this requirement seems very reasonable to me. It hardly suggests that actuaries do the audit. And, even if the working group did suggest that actuaries audit the data they use, why shouldn’t actuaries be testing the data they rely on before stating an actuarial opinion? Roy Goldman St. Louis, Mo. Editor’s note: Some of the details in the story on Page 1 of the August Update were incorrect. The NAIC is seeking to strengthen requirements for evaluating and testing the quality of the data used by P/C actuaries for reserve opinions. The annual statement instructions have been modified to require that the data identified by the appointed actuary as significant to his or her projections be subject to testing procedures. The instructions encourage communications among management, the actuary, and the auditor in testing whether the data is fairly stated in all material respects in relation to the statutory financial statements as a whole. The precise responsibilities of the actuary regarding data quality, including discussions regarding the scope of the auditor test work, are not specifically addressed by the instructions. As reported in the article, Pat Teufel, the Academy’s vice president for financial reporting issues, commented to the NAIC/AICPA Working Group before its vote on the revisions and referred to a letter from Actuarial Standards Board Chairperson William Koenig. The letter had not been submitted to the working group for its review prior to the meeting.

From left, John Parks and Ron Gebhardtsbauer field questions after the briefing.

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5


NEW ACADEMY OFFICERS THE ACADEMY’S BOARD OF DIRECTORS has approved the slate of 2004 Academy officers put forward by the nominating committee. New officers will assume their duties at the Academy’s annual meeting, Oct. 27, at the Dolphin and Swan Resort at Walt Disney World in Lake Buena Vista, Fla. At the same time, Barbara Lautzenheiser, currently the Academy’s president-elect, will become Academy president. The new officers are:

R OBERT W ILCOX , president-elect. A former Academy vice president for life insurance issues and former chairperson of the Life Practice Council, Wilcox has also served as a member of the Academy’s Board of Directors, as a member of its Financial Reporting and Health Practice Councils, and as chairperson of the Task Force on Valuation. Wilcox is a consulting actuary with R.E. Wilcox & Co. in Alpine, Utah. Prior to forming R.E. Wilcox & Co., he was national director of insurance regulatory consulting for Deloitte & Touche, Utah insurance commissioner, and consulting actuary and manager of the Salt Lake City office of Milliman & Robertson. Wilcox previously served as a director of the Conference of Consulting Actuaries (CCA) and as chairperson of the NAIC’s Financial Condition Subcommittee. He is currently a member of the Actuarial Standards Board and serves as the CCA and Society of Actuaries (SOA) representative to the Insurance Regulation Committee of the International Actuarial Association.

DONNA CLAIRE, vice president for life insurance issues. Claire is a former member of the Academy Board of Directors and a former vice chairperson of the Life Practice Council. She has served as chairperson of the Academy’s Life Practice Notes Task Force, Task Force to the NAIC on Accelerated Benefits, and Equity Indexed Products Task Force. She is the president of Claire Thinking, Inc. in Fort Salonga, N.Y. Claire previously served on the SOA Board of Governors and as vice president and secretary/treasurer of the SOA. She will succeed Stephen Preston.

BURT JAY, vice president for financial reporting issues. Jay is a former member of the Academy Board of Directors, a former Academy vice president, and former vice chairperson of the Financial Reporting Council. He has also served as chairperson of the Academy’s Committee on State Health Issues, the Accounting Policies and Procedures Task Force, and the Fair Value Task Force. He is the 2002 recipient of the Jarvis Farley Service Award. Jay retired from the Mutual of Omaha in 2002 and now serves as a consultant to the company on state regulatory issues. He will succeed Patricia Teufel.

KEN KENT, vice president for pension issues. Kent is a former member of the Academy Board of Directors, current chairperson of the Joint Committee on the Code of Professional Conduct, and a member of the Council on Professionalism. He is a principal with Mercer Human Resource Consulting in Washington. Kent is a past president of the CCA and serves on the CCA Board of Directors. He is also serving on the SOA’s Pension Section Council. He will succeed John Parks.

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Preaching to the Choir BY

ROBERT RIETZ

C

complain about preaching to the choir—delivering a great sermon to the eager attention of the handful of people who are already sufficiently dedicated that they’ve gotten up early to come and sing in the service. The choir members listen attentively, nodding, laughing in all the right places, clearly absorbing every word. But others in the congregation are a different story. They may gaze into nothingness, write grocery lists on the program, even doze off (snoring lightly) before the service is done. They’re not bad people. Quite the contrary, they’re decent, law-abiding individuals who hold down responsible jobs, pay their bills on time, love their families, and try to do the right thing in most cases. But for a variety of reasons, their attention is focused elsewhere, and no amount of pulpit pounding will bring it back. Sometimes, writing about actuarial professionalism feels a lot like preaching to the choir. The Council on Professionalism works to develop actuaries’ professional standards of conduct, qualification, and practice, and to support the profession’s discipline process. Those of us who are involved in council projects agree that a high level of professionalism is an actuary’s most important asset, enhancing the credibility of both the individual and the profession as a whole. We write articles and disLERGY OF ALL DENOMINATIONS

PROFESSIONALISM

cussion papers, participate in webcasts, give speeches at national actuarial meetings and local clubs, present mock ABCD hearings, devise professionalism cartoons for the Update, and even distribute lapel buttons proclaiming our slogan: “Professionalism Counts!” Yet we suspect that some actuaries who are less attuned to professionalism issues might not be really hearing what we have to say. Actuaries are busy people, and reading an article or attending a session on a professionalism topic may not always seem like the optimal use of precious time. Still, we think most actuaries want to do work that reflects a high level of skill and integrity, and that the tools developed by the profession can help them achieve that goal. So we wonder: what are the best ways to deliver the message that professionalism counts, not just for the actuaries who work on the council, but for every member of the profession? What would make you read the next discussion draft and comment on it, or attend a professionalism session at a meeting? Please e-mail your thoughts, ideas, and inspirations to the council at professionalism@actuary.org. We’ll use them to bring the professionalism message to all of our members. Robert Rietz is the Academy’s vice president for professionalism issues.

Rugland to Receive Farley Award

D

URING THE COURSE OF HIS CAREER, Walter S. Rugland got to know Jarvis Farley quite well. Farley was, in Rugland’s assessment, “a Renaissance actuary, who could work anywhere. He was more than a technician. He was very smart, but he was a practical manager.” The same could be said of Rugland, who will be receiving the Jarvis Farley Service Award at the Academy’s Oct. 27 annual meeting in Lake Buena Vista, Fla. Because his father, Walter L. Rugland, was the Academy’s fifth president, it might have been expected that Rugland would have some involvement with the Academy. But his commitment, which began with a stint as the Academy’s secretary from 1974 to 1976, has continued for nearly 30 years. Rugland served on the Academy’s board of directors from 1977 to 1980, moving off the board when he took up the chairmanship of the Committee to Study the Requirements of Professionalism. As that committee evolved into

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the Committee on Qualifications, Rugland was deeply involved in the development of the Actuarial Standards Board. During the same time period, Rugland served as an Academy vice president and as member of the Life Practice Council. In 1992, while serving as president of the Society of Actuaries, Rugland became involved in restructuring the International Actuarial Association and did pioneering work in the development of international qualification standards. As a result of that work he was awarded honorary fellowships in both the British Institute of Actuaries and the Scottish FacSee FARLEY AWARD, Page 8 ulty of Actuaries.

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The Actuarial Update

Farley Award,

continued from Page 7

ASSOCIATE EDITORS

Michael Braunstein William Carroll Ronald Gebhardtsbauer Rade Musulin Peter Perkins Adam Reese EDITOR

Linda Mallon (editor@actuary.org) DESIGN AND PRODUCTION

BonoTom Studio Inc. PRODUCTION ASSISTANT

Becky Horst

American Academy of Actuaries PRESIDENT

Robert Anker PRESIDENT-ELECT

Barbara Lautzenheiser SECRETARY-TREASURER

Having joined the Academy in 1968, Rugland has seen the institution grow and change. And he likes what he sees. “The Academy has blossomed from a think tank to an action tank,” Rugland said. “It can operate as a resource. It doesn’t take political positions, but what it does take are positions based on the professional experience of actuaries. It does a pretty good job looking out for the interests of actuaries, but not in a self-serving way. And that’s been tricky.” As for the future of the actuarial profession in a changing global economy, Rugland couldn’t be more optimistic. “I keep asking the question, if we didn’t have the profession, would we invent it? I think we would,” Rugland said, explaining, “There is a growing gulf between short-term thinking and long-term thinking. Short-term thinking is sequential, long-term thinking is strategic. And actuaries are trained to be long-term thinkers.” Rugland’s own actuarial career began with a job in

the actuarial department of Connecticut General Life, which he took shortly after graduating in 1961 from the University of Michigan’s graduate business school. Rugland joined Milliman & Robertson in its Chicago office in 1975, moving to Hartford to start Milliman’s office there in 1980. After retiring from Milliman in 1998, Rugland became chief operating officer of the Aid Association for Lutherans in Appleton, Wis., retiring at the end of last year. About his decision to follow in his father’s footsteps as an actuary, Rugland admits, “I couldn’t decide to not become an actuary.” In fact, Rugland said, math was never his best subject. But he also thinks good math skills are only part of what makes a good actuary. “It’s the ability to conceptualize what the numbers tell you. You can look at a project or a report and see whether it makes sense or not, and what you are pulling on is your actuarial knowledge and sensitivity.”

Peter Perkins VICE PRESIDENTS

Jan Carstens Jan Lommele John Parks Stephen Preston Robert Rietz Patricia Teufel EXECUTIVE DIRECTOR

Richard Lawson DIRECTOR OF COMMUNICATIONS

LIFE AND HEALTH QUALIFICATIONS SEMINAR

Noel Card ASSISTANT DIRECTOR FOR PUBLICATIONS

November 11-14, 2003 Washington, DC

Steven Sullivan MANAGING EDITOR, NEW MEDIA

Anne Richardson EXECUTIVE OFFICE

The American Academy of Actuaries 1100 Seventeenth Street NW Seventh Floor 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. ©2003 The American Academy of Actuaries. All rights reserved.

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SHOULD I ATTEND? If you are an FSA from 2000 or later, the likely answer is yes, because you may not meet all of the life and health specific qualification requirements to render a Prescribed Statement of Actuarial Opinion. Also, actuaries who wish to practice in the United States and sign the actuarial opinion for the NAIC Life and Health (Blue) or Health (Orange) Annual Statement should consider attending. For more specific information, and to register online, go to www.actuary.org/seminar/index.htm.

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SEMINAR PURPOSE This seminar can help fill the gap that may exist in your actuarial professional development. For more experienced actuaries, it can also serve as a basic education refresher or as a source of continuing education.

PROFESSIONAL DEVELOPMENT AND CONTINUING EDUCATION CREDIT The SOA will award you 18 formal professional development units if you pass the seminar exam. Attending the first three days of the seminar will give you the following hours of 2003 continuing education credit: 15.8 life, 16.8 health, and 3.1 professionalism. Passing the open-book exam will give you another 3.6 hours of life and health credit..

Actuarial_Update_October_2003  

Academy Testifies on DB Funding Crisis T HE N EWSMONTHLYOFTHE A MERICAN A CADEMYOF A CTUARIES Airing Opinions Symposia for readers and write...

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