AMERICAN ACADEMY OF ACTUARIES 1983 YEARBOOK

585 Pages·2008·25.37 MB·English

AMERICAN ACADEMY
OF ACTUARIES
1983 YEARBOOK
When we build, let it be such work as our des-
cendants will thank usfor: and let us think, as we
lay stone on stone, that the, time will come when
men will say as they look upon the labor and the
substance,
"See! this ourfathers didfor us.'°
JOHN PiUSKin
AMERICAN ACADEMY
OF ACTUARIES
1983 YEARBOOK
PUBLISHED BYTHE ACADEMY
Headquarters MembershipAdministration
1835 KStreet, N.W. 208SouthLaSalle Street
Washington, D.C. 20006 Chicago, Illinois 60604
NOVEMBER 1, 1982
MADEINTHEUNITEDSTATESOFAMERICA
TABLE OF CONTENTS
HISTORY ............ ............................................. ..... 2
STATEMENT OF PURPOSE ... . ... . .. ... .... . ... . ... . .. .... . .. . ... . .. . ... . . 6
BOARD oF DIItEcToRs.... .... .... .... . ... .... . .. . ... . . . .... . .. . ... . ... . . 7
ACADEMYHEADQISAIITERSAND STAFF . ... ..... ... ...:... . .. .... .... . .. . .. 8
0RGANIZATION CHART.. . ... . .... .... .... ... . ... ... . ... .... ... . .. . .... .11
COMMITTEES ...........................................................12
COMMITTEE APPOINTMENT GUIDELINES... .. . . ...... . ... .. . . ... . .. . .. . . .33
PAST OFFICERS .........................................................34
1983 MEETINGS OFTHE ACADEMY. . ... .... .. .. . .. .. .. ... .. .. .... . .. .. ..36
MEMBERSHIP STATISTICS ................................................37
A'IEMBERSHIP, NOVEMBER 1, 1982 .... ............ ... ....... ..:. ....... .39
Bn,AwS .............................................................. 426
PRESCRIBED EXAMINATIONS... .... . .. . ... . : ... . .. .... ... ... .... .... . .. 436
QUALIFICATION STANDARDS... ... . .... .... .... ... .... .:. ... . ... . .. . ... 437
STANDARDS OF PROFESSIONAL CONDUCTAND PRACTICE . .. . .... ... ... ..441
GUIDES TO PROFESSIONAL CONDUCT. ... . ... . .. . . .. . .. . . .. . .. .. ... . .. . 445
QPINIONS ASTO PROFESSIONAL CONDUCT ... ... .. .. .... .. . .. . . .. .. ... . 448
FINANCIAL REPORTING RECOMMENDATIONS
AND INTERPRETATIONS. .... .... .. .. . ... .. .. .. .. ... . .. .. .. . .. . ... . . .. 468
PENSION PLAN RECOMMENDATIONS AND INTEEtPRETATIONS.. .. . .. .,.. . 521
DIVIDEND RECOMMENDATIONSAND INTERPRETATIONS . . .. .... . ... . .. . 551
GUIDELINES FOR MAKING PUBLIC STATEMENTS .. ... . :. .... ... .... . ... . 563
APPLICATION FOR ADMISSION ... ... .... .... .... . ...... ... . ... . .. .... . . 568
DuEs.. ... .. . .... .. . .... ... . .... .... ... . .... ... .... :. . ... .... .... ... .. 569
OTHER ACTUARIAL ORGANIZATIONS . . . .... .... .. . ... .... .. . ....... ... 570
ACTUARIAL CLUBS . . .. . ... . .. . . .. .. ... . .... .. .. .. . ... .. .. .. . .. . . ... . . . 573
HISTORY OF THE
AMERICAN ACADEMY OF ACTUARIES
It was on October 25, 1965 that the American Academy ofActuaries was
organized as an unincorporated association to serve the actuarial profession
intheUnitedStates. ThecorrespondingnationalbodyinCanada,theCanadian
Institute ofActuaries, had been incorporated earlier in the same year.
For many years the profession in North America had consisted of four
bodies: the Casualty Actuarial Society, the Conference ofActuaries in Public
Practice, the Fraternal Actuarial Association, and the Society ofActuaries. In
1964, the members of those four bodies, recognizing the need for a single
body to represent actuaries of all specialties, approved fonnation of an all-
inclusive organization ofqualified United States actuaries,
The original plan had been to obtain a federal charter as the first step
toward seeking legal recognition ofthe profession.When itbecame apparent
that this could not be promptly obtained, the Academy was dissolved as an
unincorporated association and, onApril 29, 1.966, was reorganized as a cor-
poration under the Illinois General Not For Profit Corporation Act. Henry F.
Rood, whose presidential address to the Society of Actuaries in. 1958 had
voiced the first formal proposal for a national body, was elected its first
President.
In September, 1980 the Fraternal Actuarial Association, one of the four
founding organizations, went out of existence. The dissolution resolution
indicated that the needs offraternal actuaries have been increasingly met by
other actuarial organizations and that the National Fraternal Congress now
provides aforum for fraternal actuaries.
A new statement of purpose for the Academy was adopted by the Board
of Directors on December 9, 1981 following an exposure process with the
membership and extensive deliberations by the Board.
111EM13EItSHIP REQUIREMENTS. Academy membership is intended to serve as
the hallmark ofa qualified actuary in the United States.
All residents who were Fellows (or the equivalent) of the four existing
bodies on October 25, 1965, were automatically enrolled as Academy mem-
bers, subject to their indicated assent by paying the dues. The number of
charter memberswas 1,427.
The Academy immediately set about making its existence known to com-
petent actuaries not eligible as charter members. It was required that any
such actuary demonstrateto theAdmissions Committee adequateknowledge
and skills. Manywere admitted by this route, some afterpassing specialproc-
tored examinations..A requirement of seven years of responsible actuarial
experience (fiveyearsforFellowsby examinationoftheexistingbodies)was
imposed.
AfterJanuary 1, 1970, educational requirements were gradually increased
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History oftheAmericanAcademy ofActuaries 3
until 1976. InJanuary 1976, anamendmentto the Bylawscreatedanewnon-
voting class ofmembership designated Affiliate of the American Academy of
Actuaries. This class consisted ofnon-members ofthe Academywhobecame
Enrolled Actuaries under the Employee Retirement Income Security Act of
1974 (ERISA), subject to acceptance of their applications by the Academy.
Subsequently, inJanuary 1979, theBylawswerefurther amendedtoeliminate
the distinction between Affiliates and Members ofthe American.Academy of
Actuaries, thereby creating one class ofmembership designated Members of
theAmericanAcademyofActuaries,aswellassettingtheexperiencerequired
atthreeyearsofresponsibleactuarialwork.Subsequently, theAcademyBoard
set the basic educational requirement at Associateship in the Casualty Actu-
ariaiSocietyortheSocietyofActuariesorstatusasanEnrolledActuaryunder
ERISA.
Non-residents ofthe United States can be admitted to membership ifthey
meet theAcademy's educational and experience standards, can demonstrate
familiarity with United States actuarial practices, and have aneed to perform
actuarial duties in the United States.
PttonsstotvAl, Cormvcr. Guides to Professional Conduct were first issued
in December 1965, and have since been amplified and supplemented by
Opinions. These Guides require the high standard of ethics andresponsible
performance expected ofprofessionals; the Opinions aim to assist the prac-
ticing actuary in dealing with particular situations that arise. The Board of
Directors is assisted by separate committees in this field. One of these, the
CommitteeonGuidestoProfessional Conductkeep the Guidesand Opinions
current and appropriate; the other, the Committee on Discipline, considers
questions that arise about the conduct ofany individual member.
LEGAL RECOSnn't'ioiv. In December 1966, the National Association ofInsur-
ance Commissioners adopted a resolution supporting recognized standards
ofactuarial competence and conduct and urging each commissioner to sup-
port the efforts ofthe Academy to gain official recognition. Many states now
have regulations that recognize Academy membership as qualification for
signing insurance company annual statements; some have correspondingrec-
ognition for public employee retirement systems. The first state to act was
Indiana,whichprovided bya 19681awforcertification ofactuariesbyastate
board. The general pattern followed in other states has been issuance of
administrative orders or regulations.
In 1975 the responsibility expected ofactuarieswas spelled out by a new
requirement that the actuary who signs a life insurance company annual
statement express an opinion on the actuarial elements includingan opinion
ontheadequacyofreserves. TheAcademyrespondedwithRecommendations
to the profession on how this responsibility should be met.
In 1980 a similar requirement was added to the property and liability
insurance company annual statement, except that the requirement is at the
discretion of the domiciliary insurance commissioner. Again the Academy
respondedwith appropriate Recommendations to theprofession.
In the pension field the 1974 legislation, ERISA, has established extensive
4 History oftheAmericanAcademy ofActuaries
and specific standards for actuarial reports, for disclosure and fiduciary rela-
tionships, andfor the qualifications of actuaries in pension work.
ExPRESSIONS OF PnoFESSIONtit. OPtNtoN. The first major influence of the
Academy beyond the boundaries ofthe profession was in itsresponse, begin-
ning in 1972, to the drafts of guides for audits ofstock life insurance com-
panies by the American Institute of Certified Public Accountants. This
cooperative endeavor has led to regular and close association between the
actuarial and accounting professions.
The Academy is steadily promulgating Recommendations, and Interpreta-
tions thereof, for use byactuaries in preparingfinancial reportsfor insurance
companies and pension plans and in the determination of dividends under
individual life insurance policies. The Guides to Professional Conduct and
related Opinions require that actuaries take these pronouncements into con-
sideration and be prepared to support use of assumptions or methods that
vary from them.
JOINTAcrtvrnES oFAcTuAuna. BontES. The NorthAmerican actuarial bodies
cooperate in many ways, largely through joint sponsorship of actuarial ex-
aminations and through joint committees as needed. In December 1972 the
Academy was instrumental in launching an informal body, the Council of
Presidents, to foster even greater understanding and common purpose. In
1976 the actuarial organizations jointly formed the Actuarial Education and
Research Fund to foster the growth of basic actuarial research throughout
theprofessionandtoarrangefornecessaryfinancing ofsuchresearch. Finally,
a number of joint committees and task forces have dealt with a number of
issues ofmutual interest to the various actuarial bodies.
AvMINISY'RATION. From the outset the Academv shared administrative facil-
ities with the Society ofActuaries in Chicago, which have since been broad-
ened to serve the Conference ofActuaries in Public Practice also. A major
step to increase the value and influence oftheAcademy was taken inJanuary
1976whenStephen G. KellisonwasappointedExecutive Directorwith head-
quartersinWashington,D.C. TheWashingtonofficestaR"wasfurtherstrength-
ened by the appointment ofa general counsel in September 1979, a director
of administration in January 1980, and a director of public information in
October 1981. The Washington office is responsible for all staff functions
other than those related to the membership data base which remain in Chi-
cago.
MEETINGS. Since its inception the Academy has held its annual meeting in
the fall of each year in conjunction with the annual meeting of one of the
founding organizations. In 1983 the Academy will hold a separate annual
meeting for the first time. Starting in 1976 the Academy and the Conference
ofActuaries inPublicPractice havejointlysponsored aseries ofspecial meet-
ings for Enrolled Actuaries. These meetings have provided an organizational
focus for the concerns and interests ofall Enrolled Actuaries. 1981 saw the
introduction ofa series ofCasualty Loss Reserve Seminars which are jointly
History oftheAmericanAcademy ofActuaries 5
sponsored by theAcademy and theCasualty Actuatial Society andwhich are
ofparticular interest topropertyandliabilityactuariesandotherlossreserve
specialists.
Pust<[cATlolvs. The Academy continues to expand its scope ofpublications.
The Academy publishes annually a Yearbook and a supplementary Directory of
MembersbyBusinessorOtherAffiliation. In 1980atabulationofEnrolledActuaries
ListedGeographically wasprinted. Itisplannedtoupdatethislistearlyin 1983.
The frequency of publication of the Newsletter was increased to bimonthly
during 1977 and to monthly during 1981. In October 1982 its name was
changed to TheActuariol Update. Also, theEnrolledActuariesReport, originally
aspecialsection oftheNewsletter, has been turned into aseparate publication.
Finally, theJournaalhasbeenpublishedasarecordofeachannualmeetingsince
the 1975 annualmeeting. SinceJanuary 1, 1977, rheJournalhasalsocontained
officialstatements ofthe Academy.
STATEMENT OF PURPOSE
(ADOPTED BY THE BOARD
OF DIRECTORS 1981)
The purpose ofthe American Academy ofActuaries is to:
• Establish,promote andmaintainhighstandardsofcompetence, conduct
and practice within the actuarial profession.
• Stimulate and encourage the advancement of the knowledge and the
methods ofpractice in the actuarial profession.
a Encourage and promote public understanding ofthe nature and scope
ofactuarial science.
• Provide for communication between actuaries and the public on ques-
tions ofqualification, certification or licensing, and identification ofac-
tuaries.
• Represent the actuarial profession in areas ofpublic issues and discus-
sions involving actuarial concepts.
• Coordinateandinteractwithotherprofessionsandorganizationsinareas
where joint participation can contribute tofulfllZing public needs.
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