Over that past few decades, the requirements for actuarial designations have undergone continual fine-tuning. The Society of Actuaries (SOA), Canadian Institute of Actuaries (CIA) and the Casualty Actuarial Society (CAS) now restructure the exams every few years. The SOA, CIA, and CAS share exams 1-4, except for the SOA exam M. Every time there is a change in the exam courses, all three societies are affected. This prompts questions such as, “Why were the exams changed?”, “Will they be more difficult?” and “Will the profession benefit from all of these changes?”
In January 2005, the exams adopted a new format and a new naming system. Exam 1 is now referred to as Exam P and covers only probability. In the past, Exam 1 covered probability along with calculus. Exam 2, now referred to as Exam MF, covers only mathematical finance. Previously, Exam 2 covered economics and corporate finance along with mathematical finance. These removed components are still required, but they are now under the new Validation by Educational Experience (VEE) system.
CAS Exam 3, or SOA Exam M, did not change from the earlier format. It still covers statistics and actuarial models. Lastly, Exam 4, which is now known as Exam C, covers only the construction and evaluation of actuarial models. Applied statistics was taken out of this course and is now included in the VEE system.
The VEE’s can be passed in a number of ways. For college students, credit hours can be applied to these courses. There are additional options for non-student professionals. One option is to take standardized tests, similar to the actual exams, to get VEE credit. Another alternative is to submit educational experiences as proof of qualifying for credit. Each of these alternatives is sufficient for the CAS, SOA and CIA. Unfortunately, for the working actuary, work experience does not receive credit under the VEE requirements. A final option available for an actuary is to get VEE credit through the CAS by achieving a passing grade on a Transitional VEE Exam, another alternative that the CAS permits.
Starting this year, Exam P will be offered more frequently than twice a year as in the past. The exams will be administered electronically, via computer-based tests. The exam session will be offered in September 2005 over a three-day period in the United States. In 2006, there will be four computer-based tests with the potential for more in subsequent years. This will enable faster grade updates and more opportunities for actuarial candidates to take and pass the exams.
Overall, the SOA, CIA and CAS are changing how actuaries navigate the exam process. These organizations are seeking to provide exams that can be taken with a core subject in mind, instead of having to memorize two or even three different subjects for an exam. The exams will be offered more frequently for the benefit of the actuarial candidates taking them. Now the question stands, “How long will these exams be around before the next wave of changes is made?”
