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Results of the International Survey onRatemaking Principles and Methods Used inOther CountriesGregory S. W ilson, FC A S, M A A A ,on the be ha l f o f the C AS Ratem aking Com m it te

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R e s u l t s o f t h e I n te r n a t io n a l S u r v e y o n R a t e m a k i n gP r in c i p le s a n d M e t h o d s U s e d in O t h e r C o u n t r ie s

G re g o ry S . W i l so n , F C A S , M A A A

T h e C A S C o m m i t te e o n R a te m a k i n g is r e s p o n s i b l e f o r fu r t h e r in g a n dd i ssemina t i ng ra temak ing theory and p r i nc ip l es , and i den t i f y i ng top i cs fo rr e s e a rc h a n d d is c u s s io n . T h e C o m mi t t e e s o u g h t i n fo rma t i o n a b o u t r a te rn a k in gin te rna t i ona l l y and spec i f i ca l ly abou t ac tua r i a l pa r t i c i pa t i on in th i s a rea . I t wasfe lt th a t t h e re a re c o m mo n c o n c e rn s a n d p ro b l e ms w i th t h e i n s u ra n c e i n d u st rya rou nd the wor l d , and tha t sha r i ng i n fo rma t i on and j o i n t l y co l l abo ra t i ng in som earea s o f resea rch wo u ld p rov e ben e f i c i a l to a l l tha t pa r t i c ipa te .

I n 1 9 9 6 t h e C o mmi t t e e , u n d e r t h e g u i d a n c e o f P a me l a S e a l a n d R e a l e , F C A Sa n d S te v e n M . V i s n e r , F C A S , d e s i g n e d a s u r v e y th a t w a s s e n t t o t h e p re s i d e n to f the l oca l ac tua r i a l soc ie ty , as i nd i ca ted i n the i n te rna t i ona l d i rec to rym a in ta ined by the In te rna t i ona l Ac tua r i a l Asso c ia t ion . Th e su rvey i s a t tach edas E xh ib i t 1. An i n i t ia l tes t su rvey was sen t to s ix coun t r i es , fou r o f wh i chrespon ded . A f te r rev iew ing the i n it ia l resu lts, the su rvey was sen t to anadd i t i ona l th ir t y - fi ve coun t ri es . Th i r teen coun t r i es respon ded , b r i ng ing the to ta l

to seve n tee n . Th e fo l l ow ing tab le iden t i f ies the coun t r i es tha t respon ded :

ResponsesReceivedTest GrouuAustral ia M exioChina South AfricaFul l M ai linoNorway IndiaSw lzerland FinlandJapan Czech Repub licNew Zealand AustriaUniled Kingdom

PortugalNetherlandsIrelandPakistan

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3 . W h a t r o l e s d o a c t u a r i e s / n o n - a c t u a r i e s p l a y in d e v e l o p i n g t h e r a te s ?Th is ques t i on wa s a f ree fo rm respo nse in the o r ig i na l su rvey . Th oseresponses va r i ed f rom l i t t l e ac tua r i a l i nvo l vement i n Sou th A f r i ca to s i gn i f i can ti n v o l v e m e n t in A u s t ra li a . Ma n y o f t h e c o mp a n i e s r e s p o n d i n g to t h e f u ll ma i li n gh a v e a c tu a r i e s a n d n o n -a c tu a r i e s s h a r i n g v a r i o u s r o le s . T h e re w a s n oa c tu a r ia l i n v o l v e m e n t in N e w Z e a l a n d , I n d i a a n d P a k is ta n , w h e re t h e n o n - li feac tua r i a l p ro fess ion wa s e i the r non-ex i s ten t o r i n it s i n fancy .

T h e f o ll o w in g c o m m e n t s w e r e r e c eiv e d :

S w i t z e r l a n d

N e w Z e a l a n d

N o r w a y

J a p a n

Ind ia

"Ac tua r i es a re usua l l y no t i nvo l ved i n da ta ga the r i ng ,b u t a c tu a r i e s s a y w h i c h d a ta s h o u l d b e g a th e re d a n dw h i c h d a ta a re n e e d e d f o r r a te ma k i n g ; a c tu a r i e s a rea l so res pon s ib le fo r des ign o f the s ta t i s ti cs to be do nefo r ca l cu la t i on pu rposes . "P rac t i ca l ac tua r i a l expe r i enc e i n gene ra l i nsu rance i sl im i ted . Ac tua r i es a re i nvo l ve d w i th the Acc ide n tC o mp e n s a t i o n O rg a n i z a t i o n f i n a n c i a l p l a n n i n g , r a tes e t ti n g p ro c e s s . T h e y h a v e a l s o b e e n i n v o l v e d w i t h th eE a r t h q u a k e C o m m i ss io n .E v e ry n o n - l if e i n s u ra n c e c o m p a n y is r e q u i re d b y l a w toh a v e a n a p p o i n te d a c tu a ry . O n e o f t h e r e s p o n s i b il it ie so f t h e a p p o i n te d a c tu a ry is t o s e t p re m i u ms a n d t h u sset the ra tes.T h e s e f u n c t io n s a re n o t n e c e s s a r i ly d o n e e x c l u s i v e l y b ya d m i t t e d a c tu a r i e s , b u t t h o s e w h o e n g a g e i n s u c ho p e ra t i o n s a re p ra c t i c a l l y e x p e c te d t o h a v e s o mea c tu a r i a l k n o w l e d g e . A c tu a r i e s a re i n v o l v e d w i t hA c c i d e n t C o mp e n s a t i o n O rg a n i z a t i o n f i n a n c i a lp l ann ing , ra te se t t ing p rocess . Th ey a re a l so i nvo l vedw i th t h e e a r t h q u a k e c o mm i s s io n .T h e n o n - li fe b u s i n e s s h a s b e e n n a t i o n a l iz e d a n d isw r i t t e n b y t h e G e n e ra l I n s u ra n c e C o rp o ra t i o n o f I n d i ath rough i ts fou r subs id ia r ies . No ac tua r i es work in th i sc o m p a n y a t th e p re s e n t ti me .N e th e r l a n d s

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"Most actuariesin non-life(includingeconometriciansacting in thenon-life actuarial4a .

f ield) have an advisory role within their comp anies. Thefinal responsibility for the actual commercial rating istaken by managem ent."

A re t he re any pub l i shed s ta temen ts o f p r i nc i p l es o r gene ra l l yaccep ted ac tua r i a l me thods fo r p rope r t y and casua l t y i nsu rancera temak ing?

No country' has com prehensive statements of P rinciples.or G en era lly AcceptedMethod ologies. Australia has standards that are l imited to the New SouthWales Compulsory Third Party Liabil i ty coverage, Mexico has standards, whichapply to personal l ines, as well as l ines with excess agreements, and Portugalhas standards in its Bonus-M alus system.

5 . How a re t he r i s k c l ass i f i ca t i on sys tem s deve lope d? (D i f fe ren tr e s p o n s e s f o r d i f f e ren t t ypes o f i nsu rance m ay be app rop r i a te . )

Risk classif ication systems in most countries are developed by privatecomp anies with no governm ental approval. Those countries whe regovernmental approval of rates is required also have requirements forgovernm ental approval o f classification systems.

6a. A re t he re any pub l i shed s ta teme n ts o r p r i nc i p l es o f gene ra l lyaccep ted ac tua r i a l me thods fo r p rope r t y and casua l t y r i s kc l a s s i fi c a t io n s y s t e m s ?

There are generally no published statements or principles for property andcasualty risk c lass i f ica t ion systems.

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6 b . I f t h e a n s w e r t o 6 a . is " Y e s ; " p l e a s e i d e n t i f y a n d a t t a c h a c o p y :The re were n o respo nses to th is que s t i on .

7 . W h a t i s t h e p ri m a r y s o u r c e o f d a t a u s e d in r a t e m a k i n g ?In m o s t c o u n t ri e s, p r iv a te c o mp a n i e s u s e t h e ir o w n e x p e r i e n c e , s u p p l e m e n te db y in d u s tr y d a ta w h e re a v a i la b l e . In J a p a n a n d N e w Z e a l a n d , g o v e rn m e n ta ls ta ti s ti cs a re u sed fo r so me l ines .

T h e f o ll o w i n g a d d it io n a l c o m me n ts w e re r e c e iv e d :

Sw i tze r l and

Austr ia

N e w Z e a l a n d

C h i n a

M e x i c o

Ind ia

N e th e r l a n d s

Bes ide indus t ry and com pan y s ta tis tics, gene ra leco nom ic da ta is used . No te tha t the re is no access top e rs o n a l d a ta a b o u t p o l i c y h o l d e rs b e c a u s e o f l e g a lda ta p ro tec t i on .Indus t ry da ta i s f rom the Aus t r i an Assoc ia t i on o fI n s u ra n c e C o mp a n i e s .A l s o u s e o v e rs e a s e x p e r i e n c e f o r c o mm e rc i a lra temak ing . Go vern m ent s ta t is t ics a re used pa r t icu la r lyin h ea l th and re acc idents . (c lass i f ied as wo rk-re la ted ,mo to r v e h i c le r e l a te d o r o th e r ) a n d e a r th q u a k e l o s s es .Indus t ry da ta i s f rom the Insu rance Ins t i tu te o f theRep ub l i c o f Ch ina .D a ta u s e d d e p e n d s o n t h e s i z e o f t h e i n s u ra n c ec o mp a n y . L a rg e r c o m p a n i e s u se t h e ir o w n e x p e r i e n c e ,s ma l l e r c o mp a n i e s u s e t h e Me x i c a n A s s o c i a t i o n o fI n s u ra n c e C o m p a n i e s (A MIS ) d a ta .The Tar i f f Adv i so ry Commi t tee ga the rs s ta t i s t i cs andadv i ses the na t i ona l i zed i nsu re r on the ra tes." In fo rego ing years , ra temak ing adv i ce (ne t r i skp remium leve l ) was g i ven by C ,VS (s ta t i s t i ca l bureau) .Bu t now , due to fu r the r ta r i f f -segm enta t i on andd i ff e re n ti a ti o n mo re a n d mo re l a rg e c o m p a n i e s d o t h e irow n research , us ing m os t l y the i r own po r t fo l i o da ta . "

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P a k i s t a n

F o r ta r if f li n e s , p r e m i u m a n d c l a im d a t a f il e d w i t h t h eI n s u r a n c e A s s o c i a t i o n o f P a k i s t a n ( lA P ) a r e u s e d . F o rn o n - t a r i f f l i n e s , c o m p a n i e s r e l y o n t h e i r o w n e x p e r i e n c es u p p l e m e n t e d b y g u i d a n c e f ro m p r o f e s s io n a lr e i n s u re r s . C o m m e r c i a l P r o p e r t y : F i re , A u t o a n dM a r i n e u s e l A P d a t a , w h i l e o t h e r p r o p e r t y r a t e s a r em a d e f ro m i n s u re r 's o w n e x p e r i e n c e .

8 . W h a t p u b l i c a t io n s a r e t y p ic a l ly u s e d t o d i s s e m i n a t e r e s e a r c h o nr a t e m a k i n g i s s u e s ?

T h e r e a r e a v a r ie t y o f p u b l i c a t io n s u s e d i n th e d i f fe r e n t c o u n t r i e s . M o s t o f t h eE u r o p e a n r e s p o n d e n t s u s e t h e A S T I N B u l le t in , a l o n g w i t h t h e S c a n d i n a v i a nA c t u a r i a l J o u r n a l a n d b u l l e t in s p u b l is h e d b y t h e i r o w n s o c i e t ie s . T h e m a j o r it y o ft h e r e m a i n i n g c o u n t r i e s r e l y p r i m a r i l y o n b u l l e t i n s p u b l i s h e d b y t h e i r o w ns o c i e t i e s , w i t h t h e e x c e p t i o n o f S o u t h A f r i c a t h a t r e l i e s o n o v e r s e a spub l i ca t i ons , i f a t a l l.

9 . A r e y o u a w a r e o f a n y r e s e a r c h o n r a t e m a k i n g i s s u e s d o n e i n y o u rc o u n t r y t h a t w o u l d b e o f i n te r e s t t o C A S m e m b e r s ?

O n l y s i x o f t h e c o u n t r i e s t h a t a n s w e r e d t h i s q u e s t i o n a r e d o i n g r e s e a r c h t h a tt h e y f e e l w o u l d b e n e f i t t h e C A S . T h e f o l l o w i n g t w o w e r e s p e c i f i c a b o u t t h er e s e a r c h b e i n g d o n e :J a p a n M e t h o d o l o q i e s o f E a r t h q u a k e R i s k E v a l u a t i o n A p p l i e dt o E a r t h q u a k e I n s u r a n c e - - h o w t o r e f l e c t c a t a s t r o p h el o s s e s i n r a t e m a k i n g f o r i n s u r a n c e p o l i c i e s c o v e r i n gn a t u r a l d is a s t e r s u c h a s e a r t h q u a k e , f lo o d , e t c .U n i t e d K i n g d o m " S t a t i s t i c a l M o t o r R a t i n g : M a k i n g E f f e c t i v e U s e o f Y o u rD a t a , " B r o c k m a n & W r i g h t , J o u r n a l o f th e I n s t it u t e o fAc tuar ies , 119 , I I I .

P r i c in q i n t h e L o n d o n M a r k e t , G e n e r a l I n su r ance S t u d yG r o u p ( G I S G ) 2 9 9 5 c o n v e n t i o n .

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1 0 . D o a c t u a r i e s i n y o u r c o u n t r y : (a ) U t i l i ze r e s e a r c h p u b l i s h e d b y th eC A S ? ( b ) I f s o , h o w a n d w h a t ? ( c) U t i l iz e t h e C A S R a t e m a k i n gP r i n c i p l e s o r t h e A S B S t a n d a r d s o f P r a c ti c e ? (d) I f s o , h o w a n d w h a t ?

lOa&b. F i ve coun t r i es u t il ize research pub l i shed by the CAS and fou r a re no ts u re . J a p a n a n d t h e C z e c h R e p u b l i c u s e F o u n d a t i o n s o f C a s u a l t y A c tu a r ia lS c i e n c e , A u s t r ia a n d t h e C z e c h R e p u b l i c u s e t h e F o ru m, F i n l a n d u s e s v a r i o u sC A S p u b l ic a t io n s a n d th e U n i te d K i n g d o m u s e s t h e T h o m a s M a c k c h a i n l a d d e r

me th o d .

10c&d . On l y Jap an repor ts tha t they u t il ize any CAS p r i nc ip les o r ASBS ta n d a rd s o f P ra c tic e . T h e y u s e t h e S ta te m e n t o f P r in c i p le s R e g a rd i n gR a te ma k i n g , a s w e l l a s t h e A S B S ta n d a rd s o f P ra c t i c e # 1 2 o n R i s kC lass i f ica t i on and # 13 on T rend ing P rocedures .

1 1 . D o e s a r a t i n g b u r e a u o r s i m i l a r o r g a n i z a t io n e x i s t in y o u r c o u n t r y ? I fy e s , p l e a s e d e s c r i b e i ts f u n c t i o n .

N ine coun t r i es repor t hav ing a ra t ing bu reau o r s im i l a r o rga n i za t i on . M any o fthe European responden ts repor t tha t the i n f l uence o f the ra t i ng bu reaus

seems to be dec l i n i ng due to recen t l eg i s l a t i on regard ing compet i t i on .Fo l l ow ing a re the spe c i f ic responses :

F in land

N e w Z e a l a n d

"The cen t ra l assoc ia t ion o f the F inn i sh i nsu rancec o mp a n i e s h a s a b u re a u c a l l e d I n s u ra n c e D a ta L T D ,wh ich bas i ca l l y is a ra ti ng bu reau . How ever , recen t lythe ro le o f Insu rance Da ta has d imin i shed . Th e ro le o fInsu rance D a ta is " s t ronges t " in Worke rs ' Com p. "

" I n s u ra n c e C o u n c i l o f N e w Z e a l a n d d o e s t h is a s o n e o fit s se rv ices to m em bers . "

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N o r w a yJ a p a n

Aus t ra l i a

M e x i c o

Ind ia

N e th e r l a n d s

I re land

" A s s o c i a t i o n o f N o rw e g i a n I n s u ra n c e C o mp a n i e s : t h e yrep resen t i t s members and take ca re o f the i r i n te res tsi n re l a t i ons w i th the au tho r i t i es and o the r i ns t i tu t i ons .T h e y a l s o g a th e r d a ta o n p re m i u ms a n d c l a i ms b y l in e so f bus iness and d a ta on cau ses fo r f ire . "(1) "Com puta t i on o f and f il ing ra tes w i th the M in is te r o fF i n a n c e .(2) Eva lua t i on o f l oss exp er i en ce and r isks, andresearch and s tudy o f o the r ma t te rs re l evan t torates.(3) Res earch and s tudy o f the po l i cy con d i t i ons andvar i ous un derwr i t i ng te rms .(4) Res earch and s tudy o f the mat te rs con cern ing

va lua t i on o f the ob jec ts o f i nsu rance .(5) Co m p i l a t i on o f i nsu rance s ta ti s ti cs .(6) Rese arch and s tudy o f the mat te rs conc ern ingd a m a g e a n d its p re v e n t i o n a n d m i t ig a t io n . "' " Insu rance S ta t i s t i cs Aus t ra l i a ' goes some way towardfu l fi ll ing the func t i ons o f an i ndep end en t ra t ing b u reau . "T h e Me x i c a n A s s o c i a t i o n o f I n s u ra n c e C o m p a n i e s(AMIS) se ts ce r ta i n p rocedures o r s tandards tod e te rm i n e ra te s."There i s a Ta r i f f Adv i so ry Commi t tee who co l l ec ts thes ta t i s t i ca l da ta and adv i ses the Genera l Insu ranceCo rpora t i on o f Ind ia on the ra tes fo r va r i ous c l asses o fnon- l i fe bus iness . "" I n t h e N e th e r l a n d s , w e h a v e C V S , t h e C e n te r f o rInsu ranc e Sta t is t ics , wh ich gath ers a l l re lev an t industryda ta fo r mo s t non- l ife c l asses o f bus iness . W i th the a ido f a c tu a r i a l c o mmi t t e e s , t h e y a n a l y z e a l l t h e d a ta a n drepor t abou t r i sk p remium ra t i ng sys tem tha t a rea p p l ic a b l e . H o w e v e r , d u e t o E u ro p e a n l e g i s la t i o n a sre g a rd s c o mp e t it io n , mo re a n d mo re re s e a rc h o n ra tin gt ra n s fer s t o c o mp a n i e s a n d t h e i n f lu e n c e o f C V S s e e m sto lessen . No t i ce tha t non- l i fe insu ra nce i n Ho l land i s ato ta l l y f ree ma rke t w i th h igh l eve l o f comp et i t ion . "Fo r P r i va te Au to , s ta t i s t i cs a re assemb led fo r a l li nsu re rs (p rocessed by U .K . A B I ) .

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P a k i s t a n" I n s u r a n c e A s s o c i a t i o n o f P a k i s t a n . A l l r e p u t a b l ei n s u r a n c e c o m p a n i e s ( o th e r th a n N a t io n a l I n s u r a n c eC o r p . ) b e l o n g to t h e lA P . T h e l A P s e t s m i n i m u m t a r if fsf o r F i r e a n d A l l i e d p e r i l s , M o t o r , M a r i n e a n d W o r k e r s 'C o m p e n s a t io n . M e m b e r c o m p a n i e s m u s t c h a r g e a tl e a s t t h e m i n i m u m ta riff . C o n s e q u e n t i a l lo s s ( b u s i n e s si n t e r r u p t i o n ) , e n g i n e e r i n g , b u r g l a r y a n d s o m e o t h e rl in e s a r e n o n - t a r if f, s o c o m p a n i e s c a n s e t t h e i r o w nra tes . A l l r a tes (whe the r ta r i ff o r non - ta r i f f) mus t bef il e d w i t h g o v e r n m e n t . P r i o r a p p r o v a l is n o t n e e d e d b u tg o v e r n m e n t h a s t h e r i g h t t o o b je c t . "

1 2 . A r e t h e r e a n y a r e a s w l'u ~re j o i n t r e s e a r c h , r e l a t e d t o i n s u r a n c e p r i c i n g ,w o u l d b e b e n e f i c ia l b e t w e e n a c t u a r ie s o f y o u r c o u n t r y a n d t h e C A S ?

T h e f o l lo w i n g r e s p o n s e s w e r e r e c e iv e d :S w i t z e r l a n d E u r o p e a n a n d A m e r i c a n a c t u a r i e s c o u l d o n l y p r o f i t b yh a v i n g c l o s e r c o n t a c t s . R e s e a r c h i n a c t u a r i a l s c i e n c eh a s a l o n g t r a d it io n in S w i t z e r la n d . S o m e f a v o r it ea r e a s o f s t u d y a r e c r e d i b i l it y t h e o r y , m a t h e m a t i c a ls t a t i s t i c s , e x t r e m e v a l u e t h e o r y , m o d e m f i n a n c i a lm a t h e m a t i c s , c a l c u l a t i o n o f t o t a l c l a i m d i s t r i b u t i o n ,

c o n c e p t s o n r is k a d j u s t e d c a p i ta l .A u s t r i a C red i b i l i t y r a t i ng i n non - l i f e ; r i sk c l ass i f i ca t i on i n ca ri n s u r a n c e .F i n l a n d P e r s o n a l a u t o , p e r s o n a l h o m e .J a p a n " J o i n t r e s e a r c h f o r s e l e c t i n g r is k c l a s s i f i c a t i o n f a c t o r s b yd i f fe r e n t t y p e s o f i n s u r a n c e p o l i c ie s . "C z e c h R e p u b l ic M a t h e m a t ic a l m o d e l in g f o r d y n a m i c s o l v e n c y t e s ti ng .P o r t u g a l W o r k e r s ' C o m p e n s a t i o n , A u t o I n s u r a n c e .N e t h e r l a n d s " D u t c h n o n - l i fe a c t u a r i a l p r o f e s s i o n is r e l a t i v e l y v e r yy o u n g a n d s m a l l . M o s t r e s e a r c h is d o n e a t t h eU n i v e r s it y o f A m s t e r d a m ( G o o v u e r t s , K a a s ,D a n n e n b u r g ) w h i c h is r e p o r te d in A s t i n C o l lo q u i a . "U n i t e d K i n g d o m R a t in g o f E x c e s s o f L o s s R e i n s u r a n c eL o n g t a i l/ L i a b i li t y b u s i n e s sC a t a s t r o p h e s

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1 3 a . D e s c r i b e t h e p r o c e s s f o r a d m i s s i o n t o t h e a c t u a r i a l s o c i e t y i n y o u rc o u n t r y , a l o n g w i t h t h e r a t e m a k i n g t o p i c s t h e a c t u a r y n e e d s t om a s t e r f o r a d m i s s i o n .

T h e r e i s a w i d e r a n g e o f r e q u i r e m e n t s f o r a d m i s s i o n t o t h e a c t u a r i a l s o c i e t y o ft h e v a r i o u s c o u n t r i e s , r a n g i n g f ro m e x a m s a n d u n i v e r s i t y t r a i n i n g i n t h eN e t h e r l a n d s a n d U n i t e d K i n g d o m t o n o s p e c i f i c r e q u i r e m e n t s i n P o r t u g a l .F o l l o w i n g a r e t h e s p e c i f i c r e s p o n s e s b y c o u n t r y :

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" O r d i n a ry M e m b e r : a d m i s s io n b y t h e b o a r d o f th e S w i s sA s s o c i a t i o n o f A c t u a r i e s ( S A A ) , c o n d i t io n s :( i) u n i v e r s i t y d e g r e e i n a c t u a r i a l s c i e n c e , O R u n i v e r s i t yd e g r e e i n m a t h e m a t i c s a n d 3 y e a r s o f e x p e r i e n c e i na c t u a r i a l d u t i e s , O R e x p e r i e n c e a s s t a f f - m e m b e r i na c t u a r i a l d u t ie s ( a t le a s t 1 0 y e a r s ) A N D i n a n y c a s e :(ii) r e c o m m e n d a t i o n b y 2 e x p e r i e n c e d m e m b e r s o f t h eS A A A c t u a r y S A A : ( e. g. " fu ll m e m b e r " i n t h e s e n s e o ft h e I F A A ) a d m i s s i o n b y t h e b o a r d o f t h e S w i s sA s s o c i a t i o n o f A c t u a r i e s ( S A A ) , c o n d i t io n s :(i) o r d i n a r y m e m b e r o f t h e S A A( ii) e x a m i n a t i o n ( in p r e p a r a t i o n a c t u a l l y ) "" A f u ll d e g r e e in m a t h e m a t ic s a n d a n a d d i t io n a le d u c a t i o n i n in s u r a n c e m a t h e m a t i c s O R a f u ll d e g r e e i ni n s u r a n c e m a t h e m a t i c s a n d t h r e e y e a r s o f p r a c t i c a lw o r k i n g e x p e r ie n c e . "" F ir s t y o u h a v e t o b e g r a d u a t e d f ro m a u n i v e r s i t y w i t hm a i n d e g r e e in m a t h e m a t ic s . B e s i d e s th a t y o u m u s th a v e a t l e a s t o n e y e a r w o r k i n g e x p e r i e n c e o n a c t u a r i a lm a t t e r s . O n t o p o f t h a t , q u a l i f ie d a c t u a r i e s m u s t p a s s as e r i e s o f p o s t g r a d u a t e e x a m i n a t i o n s ( w h i c h o n t h ea v e r a g e t a k e 2 - 3 y e a r s t o a c c o m p l is h ) . "" F F A , F I A , F S A , F I A A - - e f f e c t i v e l y e l i g ib i l it y t o b e aF e l l o w o f t h e N Z S o c i e t y r e q u i r e s q u a l i f i c a t i o n a s aF e l lo w o f a n o v e r s e a s a c tu a r ia l e x a m i n i n g b o d y. M o s ts u c h b o d i e s n o w i n c lu d e s o m e k n o w l e d g e o f g e n e r a li n s u r a n c e i n c l u d i n g r a t e m a k i n g i n t h e i r e x a m i n a t i o ns y s t e m s . "

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" T h e d e g r e e o f c a n d . s c i e n t , f r o m t h e U n i v e r s i t y w i t hb o t h l i fe a n d n o n - l i fe to p i c s a n d a t h e s i s r e l e v a n t t oi n s u r a n c e m a t h e m a t i c s , i s r e q u i r e d ( c o r r e s p o n d s t o aM a s t e r s d e g re e ) . A w r i tt e n a p p l ic a t i o n d e s c r i b in g y o u rb a c k g r o u n d a l o n g w i th a r e c o m m e n d a t i o n f ro m 2m e m b e r s , is a l s o re q u i r e d . M u s t b e e l e c t e d a t a no r d i n a r y m e e t i n g . "" P a s s i n g t h e e x a m i n a t i o n o f e i g h t s u b j e c t s ( s i x s u b j e c t sin b a s ic c o u r s e a n d t w o s u b j e c t s i n a d v a n c e d c o u r s e ) i st h e p r e r e q u i s i t e t o b e c o m e a f e l l o w s h i p a c t u a r y o f t h eI A J . O n e o f t h e tw o s u b j e c ts i n t h e a d v a n c e d c o u r s ed e a l s w i t h p r a c t i c a l m e t h o d s o f i n s u r a n c e b u s i n e s so p e r a t i o n s i n c l u d i n g r a t e m a k i n g p r i n c i p l e s a n dm e t h o d s . "T h e r e a r e n o s o c i e t y a c t u a r i e s c u r r e n t l y i n v o l v e d i nr a t e m a k i n g f o r g e n e r a l i n s u r a n c e . H e n c e , it d o e s n o ta p p e a r t h a t t h e r e i s p r o p e r t y / c a s u a l t y r e p r e s e n t a t i o n i nt h e i r s o c i e t y ." W e l a u n c h e d a p r o g r a m t o t h e f o r m a t i o n ( ? ) o f n o n - l i f eac tua r i es : r i s k theo ry , s ta t i s t i c s and p robab i l i t y ,n u m e r i c a l m e t h o d s a n d s i m u l a t i o n , r e g r e s s i o n m o d e l s ,s ta t i s t i ca l t i me se r i es , c l a i ms rese rv i ng , c red i b i l i t ytheo ry , a p r i o r i t a r i f i ca t i on (? ) , pos te r i o r i t a r i f i ca t i on (? ) ,r e i n s u r a n c e . T h e p r o g r a m i s n o t y e t c o m p u l s o r y b u tm a n y m e m b e r s a r e a t te n d i n g i t."" R u l e s h a v e c h a n g e d r e c e nt ly . F u ll m e m b e r s h i p c a no n l y b e o b t a i n e d b y a c t u a r i e s , g r a d u a t e d a t U n i v e r s i t yO R f i n i s h i n g a l o n g - l a s t i n g s p e c i a l c o u r s e o u t s i d eU n i v e r s i t y , c o m b i n e d w i t h a p o s t - u n i v e r s i t y c o u r s e ( 2yea rs ) . "" A n y f u l l m e m b e r o f a n a c t u a r i a l a s s o c i a t i o n i n a n y E .C . c o u n t r y w h o w o r k s i n I r e l a n d i n a n a c t u a r i a l c a p a c i t yc a n a p p l y t o b e c o m e a f e ll o w m e m b e r o f t h e s o c ie t y ."" T h e P a k i s t a n S o c i e t y o f A c t u a r i e s r e l i e s o n t h ee x a m i n a t io n s y s t e m o f th e U K I n s ti tu t e o f A c t u a r i e s a n dt h e U S S o c i e t y o f A c t u a r i e s . T h e U K I n s t i t u t e h a s ac o m p u l s o ry e x a m o n g e n e r a l i ns u r a n ce . T h e S O A ' ss y s t e m i s w e l l k n o w n to th e C A S . T h e P S O A h o p e se v e n t u a l l y to c o n d u c t e x a m i n a t io n s f o r it s o w nF e l l o w s h i p . "

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U n i te d K i n g d o m" Me mb e rs a d m i t t e d a s s tu d e n ts o n l y i f t h e y h a v e ama th e m a t i c a l e d u c a t i o n ( e.g . ma th e ma t ic s d e g re e ) .T h e re a re t h e n 9 e x a m s to pa s s . T h e 3 mo s t r e le v a n tex am s are sub ject C (Stat is t ics), G (Ge nera lInsu rance) , as we l l as a Fe l l ow sh ip paper . "

1 3 b . A r e t h e r e n o n - m e m b e r s o f y o u r a c t u a r ia l s o c i e t y w h o w o u l d a l s o b er e f e rr e d t o a s a c t u a r i e s ? I f s o , w h a t q u a l i f i c a t i o n s d o th e y h a v e ?

Ma n y o f t h e r e s p o n d e n ts e x c l u s iv e l y u s e t h e t it le a c tu a ry to m e a n a m e m b e r o ft h e s o c ie t y . H o w e v e r , t h e re a re s e v e ra l t h a t c a l l a v a r ie t y o f n o n -me mb e rsa c tu a r ie s . T h e s e ma y i n c lu d e s tu de n ts , t e a c h e rs a n d e c o n o m i s t s . F o l lo w i n ga re t h e r e s p o n s e s re c e i v e d f r o m e a c h c o u n t r y :S w i t z e r l a n d

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" T h e l e g a l re q u i r e me n t fo r P e n s i o n S c h e me sExper ts i s to pass success fu l l y the examina t i ono rg a n i z e d b y t h e S A A ; t h is e x a m i n a t i o n is o p e n t oa n y a p p li c a n t. P e n s i o n S c h e m e E x p e r t s (P V E ) isa t i t le recogn i zed by fed era l l eg i s l a t ion . ""The ac tua r i a l t i t l e i s no t p ro tec ted by l aw i nN o rw a y a n y l o n g e r . W h a t w e c a l l a n a c tu a ry is aperson w i th a degre e o f cand . sc ien t, w i th wh a t wec a l l a n a c tu a r i a l c o mp e te n c e a s d e s c r i b e d u n d e r1 3 a a b o v e . T h e re fo re , t h e re a re a c tu a r ie s th a ta re n o t m e m b e rs o f t h e a c tu a r ia l s o c ie t y ."Usua l l y they a re teachers o f ac tua r i a l sc i ence no twork ing ou ts i de o f un i ve rs it ies ." I n n o n - l i f e , w e h a v e a n u mb e r o feconomet r i c i ans , work ing i n the ac tua r i a l f i e l d(a n d e v e n s o me t i me s a c t i n g a s t h e c e r t i f y i n gac tua ry ) , wh i ch a re a f f i l i a te members o f theInst i tu te o f Actua r ies ."" T h e s o c i e t y h a s a s s o c i a te me mb e rs w h o d o n o tengage i n ac tua r i a l work i n I re l and , o r who a restude nts o f the Ins t i tu te or F acu l ty in the U. K."

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c o u n t r ie s h a v e k n o w l e d g e o f C A S a c t iv it ie s , t h e re a re a l a rg e n u mb e r o fcoun t r i es wh ere the re i s a l ack o f fami l ia r i t y w i th the C AS.

T h e re w a s c l e a r l y a g re a t d e a l o f i n te re s t th ro u g h o u t t h e i n te rn a t io n a l a c tu a r ia lc o m mu n i t y in s h a r in g i n fo rma t io n w i th t h e C A S in t h e a re a o f r a te ma k i n g . T h eC o mmi t t e e o n R a te ma k i n g i n te n d s t o w o rk w i t h i n t h e C A S a n d w i t h A S T IN toe n c o u ra g e t h e s h a r in g o f r a te ma k i n g re s e a rc h i n te rn a t io n a l ly .

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