As you progress through your career, you may be asked to provide actuarial services for new products, using new technologies or methods, and even in new areas of practice. How do you know if you are qualified to perform such work? The actuarial professionalism structure can help you determine whether you are qualified.
First, you have an obligation to be qualified. Precept 1 of the Code of Professional Conduct states that an actuary “should act honestly, with integrity and competence.” Annotation 1-1 goes on to state “an Actuary shall perform actuarial services with skill and care.” The words “competence” and “skill” imply that the actuary must know what they are doing—or in other words, be qualified.
This is borne out by Precept 2, which requires an actuary to perform actuarial services “only when the Actuary is qualified to do so on the basis of basic and continuing education [CE] and experience, and only when the Actuary satisfies the applicable qualification standards.” For actuaries practicing in the United States, those standards are the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States (USQS).
As the USQS states:
“Actuarial practice is grounded in the knowledge and application of actuarial science, a constantly evolving discipline. If actuaries are to provide their Principals with high-quality service, it is important that they remain current on emerging advancements in actuarial practice and science that are relevant to the Actuarial Services they provide. Further, … [a]ctuaries working in emerging areas need to be familiar with relevant new techniques and concepts from other related disciplines.” (Section 2.2.1)
If you’ve met the qualification requirements in one area of practice and are looking to practice in a different area, section 4 addresses changes in practice and application. For both the general and specific qualification standard, an actuary changing practice area must meet “the applicable basic education and experience requirement” and obtain CE relevant to statements of actuarial opinion (SAOs) “to be issued in the new area of actuarial practice.”
Recognizing that actuarial science may change, the USQS requires actuaries “practicing in an area of practice with a new application of actuarial science [to] maintain qualification through appropriate [CE].” And actuaries moving into an emerging or nontraditional area of actuarial practice “can satisfy the [CE] requirements by maintaining knowledge of applicable standards of practice, actuarial concepts, and techniques relevant to the topic of the [SAO].”
Common to the requirement for each of these situations is the ability to qualify through “relevant” CE. Under the general standard, relevant CE broadens or deepens your understanding of your work, expands your knowledge of practice in related disciplines that bear directly on your work, or facilitates your entry into a new area of practice.
Ultimately, it is your responsibility to make a good-faith determination of what constitutes relevant CE for the area in which you wish to practice. (For NAIC annual statement SAOs, CE must be directly related to the topics listed in section 3.1.1 so that you “maintain current knowledge of applicable standards and principles” for the SAO you wish to issue.)
The Committee on Qualifications (COQ) has answered several questions on qualifications in new areas. Some of their responses have been incorporated into the FAQs on the U.S. Qualification Standards. For instance, FAQ 10 confirms that an actuary changing practice areas must meet the basic education, experience, and CE requirements applicable to SAOs in the new practice area. FAQ 10 provides helpful advice for the actuary in this situation, stating
When considering what is needed to become qualified in the new area of practice, an actuary should keep in mind that some of the actuary’s existing education and experience may help to qualify the actuary in the new area of practice. The basic education requirement does not require an actuary to take additional examinations in the new area of practice, although an actuary may wish to do so.
In some instances, particularly in emerging areas of practice, it may be difficult to determine what you need to be qualified. Nevertheless, the Code states that “the absence of applicable qualification standards for a particular type of assignment … does not relieve the Actuary of the responsibility to perform such Actuarial Services only when qualified to do so.” (Annotation 2-2)
If you are not sure whether you are qualified, or what you need to do to become qualified, talking to other actuaries involved in the area can help. Another option is to request guidance from the Actuarial Board for Counseling and Discipline or submit a question to the COQ. You have the responsibility to determine what you need to do to become qualified—and to look in the mirror to determine whether you meet those requirements.
1 An hour is defined as 50 minutes, and fractions of an hour may be counted.