Untitled - American Academy of Actuaries

505 Pages·2008·21.86 MB·English

When we build, let it be such work as our descen-
dantswillthankusfor:andtetusthink,as welaystone
on stone, that the time will come when men will say
as they look upon the labor andthe substance,
"See! this ourfathers didfor us."
J'aHx Rusxix
AMERICAN
ACADEMY
of
ACTUARIES
1981 Year Book
PUBLISHED BY THE ACADEMY
ExecutiveOffice AdministrativeOffice
1835 KStreet,N.W. 208SouthLaSalleStreet
Washington,D.C.20006 Chicago,Illinois60604
NOVEMBER 1, 1980
MADEINTHEUNITED STATFS OFAMERICA
TABLE OF CONTENTS
HI5TORY . . . . . . . . . . . . . . . . . . . . 2
Bi7ARAOFDIRECTORS. . . . . . . . . . . 5
ACADEMY HEADQUARTERS AND STAFF . . . . . . . . . . 6
ORGANIZATION CHART . . . . . . . . . . . . . . . 7
COMMITfEES. . . . . . . . . . . . . . . . . . . 8
GUIDELINES FOR APPOINTMEAITS TO COMMITTEES . ..... 28
PAST OFFICERS . . . . . . . . . . . . . . . . . . 29
FUTURE ANNUAL MEETINGS . . . . . . . . . . . . 31
MEMBER5HIPSTATISTICS . . . . . . . . . . . . . 32
MEMBERSHIP,NOVEMBER 1, 1980. . . . . . . . . . . . 34
BYLAWS . . . . . . . . . . . . . . . . . . . . 370
PRESCRIBEDEXAMINATIONS . . . . . . . . . . . . . 380
CiUIDESTOPROFESSIONALCONDUCT. . . . . . . . . . . 381
OPINIONS AS TOPROFESSIONALCONDUCT . . . . . . . . . 384
FINANCIAL REPORTING RECOMMENUATIOIdS
AND INTERPRETATIONS . . . . . . . . . . . . 404
PENSION PLAN RECOMMENDATIONS AND INTERPRETATIONS . . 458
APPLICATION FOR ADMISSION . . . . . . . . . . . . . 488
Dclss . . . . . . . . . . . . . . . . . . . . . 489
OTHER ACTUARIAL ORGANIZATIONS . . . . . . . . . . 490
AC'fUARIAL CLUBS . . . . . . . . . . . . . . . . . 493
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HISTORY OF THE
AMERICAN ACADEMY OF ACTUARIES
Itwas onOctober 25, 1965 thatthe American Academy of Actuaries was
organized as an unincorporated association to serve the actuarial profession
inthe United States. The corresponding national body in Canada, the Cana-
dian Instituteof Actuaries,hadbeenincorporated earlier in thesame year.
For many years the profession in North America had consisted of four
bodies: theCasualty ActuarialSociety,theConference ofActuaries inPublic
Practice, the Fraternal Actuarial Association, and the Society of Actuaries.
In 1964,the members ofthose fourbodies, recognizing the need for a single
body to represent actuaries of all specialties, approved formation 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 of theprofession. When it became appar-
ent that this could notbe promptly obtained, the Academy was dissolved as
an unincorporated association and, on April 29, 1966, was reorganized as a
corporation under the Illinois General Not For Profit Corporation Act.
Henry F. Rood, whose presidential address to the Society of Actuaries in
1958had voiced thefirstformalproposal foranational body,waselected its
firstPresident.
In September, 1980 the Fraternal Actuarial Association, one of the four
founding organizations, went out of ex'istence. The dissolution resolution
indicated that the needs of fraternal actuaries have been increasingly met by
other actuarial organizations and that the National Fraternal Congress now
provides a forurxt for fraternal actuaries.
MEMBERSHn' RHQUIREMENTS. Academy membership is intended to serve
as the hallmark of aqualifiedactuary inthe United States.
All residents who were Fellows (or the equivalent) of the four existing
bodies onOctober 25, 1965, were automatically enrolled as Academy mem-
bers, subject to their indicated assent by paying the dues. The number of
chartermemberswas 1,427.
The Academy immediately set about making its existence known to
competentactuaries noteligibleascharter members.Itwas required that any
such actuary demonstrate to the Admissions Committee adequate knowl-
edgeandskills. Manywereadmitted bythisroute, someafterpassingspecial•
proctored examinations. A requirement of seven years of responsible actu-
arial experience (five years for Fellows by examination of the existing bod-
ies) was imposed.
After January 1, 1970,.educationalrequirements were gradually increased
until 1976. In January 1976, an amendment to the Bylaws created a new
non-voting class of membership designated Affiliate of the American Acad-
emy ofActuaries. This class consisted ofnon-members of theAcademy who
became Enrolled Actuaries under the EmployeeRetirement Income Security
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History of the American Academy of Actuaries 3
Act of 1974 (ERISA), subject to acceptance of their applications by the
Academy. Subsequently, in January 1979, the Bylaws were further amended
toeliminatethedistinctionbetween AffiliatesandMembers oftheAmerican
Academy of Actuaries, thereby creating one classofmembership designated
Members of the American Academy of Actuaries, as well as setting the ex-
perience required atthree years of responsible actuarial work. Subsequently,
theAcademyBoard setthebasic educational requirementatAssociateship in
the Casualty Actuarial Society or the Society of Actuaries or status as an
Enrolled Actuary underERISA.
Non-residentsoftheUnitedStatescanbeadmitted tomembership ifthey
meet the Academy's educational and experience standards, can demonstrate
familiaritywith UnitedStates actuarialpractices, and haveaneedtoperform
actuarial dutiesin theUnitedStates.
PROFESSIONAL CONDUCT AND PRACTICE. Guides to Professional Conduct
werefirst issued inDecember 1965, and have since been amplified and sup-
plernented by Opinions. These Guides require the high standard of ethics
andresponsible performance expected ofprofessionals; theOpinionsaim to
assist the practicing actuary in dealing with particular situations that arise.
The Board of Directors is assisted by separate committees in this field. One
ofthese,the Committee onGuides toProfessional Conductkeep the Guides
and Opinions current and appropriate; the other, the Committee on Disci-
pline, considers questions that arise about the conduct of any individual
member.
LEGAL RECOGNITION. In December 1966, the National Association of In-
surance Commissioners adopted a resolution supporting recognized stand-
ards of actuarial competence and conduct and urging each commissioner to
support the efforts of the Academy to gain official recognition. Many states
now have regulations that recognize Academy membership as qualification
forsigninginsurance company annual statements; some have corresponding
recognition for public employee retirement systems. The first state to act
wasIndiana, whichprovided bya 1968lawforcertification ofactuaries bya
stateboard. Thegeneralpatternfollowedinotherstates has been issuanceof
administrativeordersorregulations.
In 1975 the responsibility expected of actuaries was spelled out by a new
requirement that the actuary who signs a life insurance company annual
statement express anopinionontheactuarialelements includinganopinion
on the adequacy of reserves. The Academy responded with recommenda-
tions to theprofessiononhow this responsibility shouldbe met.
In 1979 a similar requirementwas added to the property and liability in-
surance company annual statement, except that the requirement is at the
discretion of the domiciliary insurance commissioner. Again the Academy
responded with appropriate recommendations to the profession.
Inthepension field the 1974 legislation, ERISA,has established extensive
and specific standards for actuarial reports, for disclosure and frduciary rela-
tionships, and forthe qualifications of actuaries in pension work.
4 History of the American Academy of Actuaries
EXPRESSIONS OF PROFESSIONAL OPINION. The first major influence ofthe
Academy beyond the boundaries of the profession was in its response, be-
ginning in 1972, to the drafts of guides for audits of stock life insurance
companies by the American Institute of Certified Public Accountants. This
cooperative endeavor has led to regular and close association between the
actuarialandaccountingprofessions.
The Academy is steadily promulgating Recommendations, and Interpre-
tations thereof, for use by actuaries in preparing financial reports for insur-
ance companies and pension plans. The Guides to Professional Conduct and
related Opinions require that actuaries take thesepronouncements into con-
sideration and be prepared to support use of assumptions or methods that
varyfrom them.
JOINT ACTIvITIEs OF ACTUARIAL BODIES. The North American actuarial
bodiescooperate inmanyways,largelythrough jointsponsorship ofactuarial
examinations and through joint committees as needed. In December 1972
the Academy was instrumental in launching an informal body, the Council
ofPresidents, tofoster even greater understanding and commonpurpose. In
1976 theactuarial organizations jointly formed the Actuarial Education and
Research Fund to foster the growth of basic actuarial research throughout
the profession and to arrange for necessary financing of such research.
ADhnNISTRATION. From the outset the Academy shared administrative
facilities with the Society of Actuaries in Chicago, which have since been
broadened to serve the Conference of Actuaries in Public Practice also. A
major step to increase thevalue and influence of the Academy was taken in
January 1976 when StephenG. Kellison was appointed Executive Director
withheadquarters inWashington,D.C. Kellison, amember ofthe Academy,
will coordinate Academy activities in the public sector. The Washington
office staff was further strengthened by the appointment ofa full-time staff
lawyerinSeptember 1979.
MEETINGS. The Academyholds its annualmeeting inthe fall of eachyearin
conjunction with the annual meeting of one of the founding organizations.
Starting in 1976 the Academy and the Conference of Actuaries in Public
Practice have jointly sponsored a series of special meetings for Enrolled
Actuaries. These meetings have provided an organizational focus for the
concernsand interests ofall Enrolled Actuaries.
PuBLICATIONS.The Academy continues to expand its scope of publications.
The Academy publishes annually a Year Book and a supplementary List of
Members byBusiness Connection. In 1980atabulation ofEnrolled Actuaries
Listed Geographically was printed. During 1977 the frequency of publica-
tion of the Newsletter wasincreased to bimonthly. Also, the Enrolled Actu-
arie.r Report, originally a special section of the Newsletter, has been turned
into a separate publication. Finally, the Journal has been published as a
recordofeach annualmeeting since the 1975 annualmeeting.SinceJanuary
1, 1977, theJournal has also contained official statements of the Academy.
WALTERL. GRACE
President oftheAmericanAcademy of14ctuaries
BOARD OF DIRECTORS
OFFICERS: ETxepr,mm
WALTERL.GRACE,President 1981
W[LLIAMA.IZALVORSON,President-Elect 1981
RICHARDS.ROBERTSON,VicePresident 1981
P.ADGERWILLIAMS, VicePresident 1981
A.NoR1r[ANCROWDER, III,VicePresident 1982
BARTLEYL.MUNSON,VicePresident 1982
CHARLESB.H.WATsoN,Secretary 1981
KEVINM.RYAN,T'reasurer 1981
PAST PRESIDENTS:
DALER.GUSTAFSON 1981
RONALDL.BORNHUET"TER 1982
ELEC'I'ED:
MARYH. ADAb[S- 1981
JAMEsA. ArrwpoD 1981
DAVIDR.CARPENTER 1981
DARRELLW.EHL$RT 1981
JOHNA. FIBIGER• 1981
--MAVIS A.WALTERS 1981
RAYMONDA.BIERSCHBACH 1982
CHARLESGRELISEY 1982
DAVIDG.HARTMAN 1982
ROBERTPOLLACK 1982
ELIZABETFIC. POSTON 1982
DAVIDM."E 1982
E. PAULBARNHART 1983
JAmESR. BERqU[ST 1983
HAROLDJ.BROWNLEE 1983
WARRENP.COOPER 1983
1983
WILLIAMW.HAND
W.H.ODELL 1983.
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