Casualty Actuarial Society Credentials (ACAS/FCAS) Professionalism, Online Courses, and Credentialing Requirements Flashcards

24 sample cards from the Professionalism, Online Courses, and Credentialing Requirements deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. What are statutory accounting principles (SAP) and how do they differ from GAAP?

   SAP are conservative, regulator-mandated accounting rules focused on solvency and policyholder protection (e.g., non-admitted assets excluded, expenses recognized immediately). GAAP focuses on going-concern earnings and matching for investors. Insurers file Annual Statements under SAP.

2. What is risk-based capital (RBC) and what does it measure?

   RBC is a regulatory formula setting the minimum capital an insurer needs given its size and risk profile (asset, credit, underwriting, and off-balance-sheet risk). Falling below RBC thresholds triggers escalating regulatory intervention.

3. Define loss reserves and IBNR.

   Loss reserves are estimated liabilities for unpaid claims. IBNR (Incurred But Not Reported) is the reserve for claims that have occurred but are not yet reported, plus development on known claims. Total reserves = case reserves + IBNR.

4. What is the McCarran-Ferguson Act?

   A 1945 U.S. law affirming that the regulation of insurance is the province of the states, granting a limited federal antitrust exemption for the business of insurance to the extent it is regulated by state law.

5. What is the difference between earned premium and written premium?

   Written premium is the total premium booked when policies are issued. Earned premium is the portion corresponding to coverage already provided over elapsed time. Unearned premium reserve = written premium not yet earned.

6. What are the four core values stated in the Casualty Actuarial Society Code of Professional Conduct?

   The CAS adopts the joint actuarial Code emphasizing that actuaries must act with integrity, competence, with regard to the public interest, and fulfill responsibility to the profession — serving the public and upholding the reputation of the actuarial profession.

7. Under the Code of Professional Conduct, what does Precept 1 require?

   An actuary shall act honestly, with integrity and competence, and in a manner to fulfill the profession's responsibility to the public and to uphold the reputation of the actuarial profession. It is the foundational precept.

8. What does the Code of Professional Conduct require regarding qualification (Precept 2)?

   An actuary shall perform Actuarial Services only when qualified to do so on the basis of basic and continuing education and experience, and only when meeting applicable Qualification Standards.

9. Under the Code, when must an actuary disclose a conflict of interest (Precept 7)?

   An actuary may perform services despite a conflict of interest only if able to act fairly, makes appropriate disclosure to all known direct users, and obtains the express agreement of those principals. Otherwise the actuary must decline or withdraw.

10. What does Precept 13 of the Code require regarding violations by another actuary?

    An actuary with knowledge of an apparent, material, unresolved violation of the Code by another actuary should attempt to resolve it through discussion; if unresolved, the actuary must disclose it to the appropriate counseling and discipline body (e.g., the ABCD), unless prohibited by law.

11. What is the ABCD and its role in actuarial professionalism?

    The Actuarial Board for Counseling and Discipline. It counsels actuaries on professional conduct, mediates disputes, investigates alleged Code violations, and recommends disciplinary action to the member organizations (which impose the actual discipline).

12. What are the U.S. Qualification Standards and who issues them?

    Issued by the American Academy of Actuaries (AAA), the U.S. Qualification Standards (USQS) set the basic and continuing education requirements an actuary must meet to issue a Statement of Actuarial Opinion in the United States.

13. Under the U.S. Qualification Standards, how much continuing education is required annually for a Statement of Actuarial Opinion?

    At least 30 hours of relevant continuing education per year, of which at least 3 hours must be on professionalism topics and at least 6 hours must be 'organized' activities (interaction with others outside one's own organization).

14. What are Actuarial Standards of Practice (ASOPs) and who promulgates them?

    ASOPs are promulgated by the Actuarial Standards Board (ASB). They define appropriate practice for actuaries in the U.S., specifying what the actuary should consider, document, and disclose when performing actuarial services.

15. What is a Statement of Actuarial Opinion (SAO)?

    A formal written opinion, typically required by regulators, in which a qualified actuary opines on the adequacy of an insurer's loss and loss adjustment expense reserves. Issuing it triggers the U.S. Qualification Standards.

16. Outline a structured ethical decision-making process an actuary can apply.

    Identify the facts and stakeholders; identify the relevant Code precepts, ASOPs, and laws; consider alternatives and consequences; consult guidance or the ABCD if needed; choose the action consistent with integrity and the public interest; document and disclose appropriately.

17. In ethical decision-making, how should an actuary resolve a conflict between a client's wishes and professional standards?

    Professional standards and the public interest prevail. The actuary must not produce work that is misleading or violates ASOPs/the Code; if the client insists, the actuary should disclose limitations, qualify the opinion, or withdraw from the engagement.

18. What are the requirements to attain the ACAS (Associate of the Casualty Actuarial Society) designation?

    Pass the required preliminary and Associate-level CAS/jointly-administered exams, complete the required online courses and the validation by educational experience (VEE) topics, and attend the CAS Course on Professionalism. ACAS is the first CAS credential.

19. What VEE (Validation by Educational Experience) topics are required for CAS credentials?

    Economics, Accounting and Finance, and Mathematical Statistics. VEE is validated through approved coursework, exams, or other approved means rather than by sitting CAS exams, and is required before or during the ACAS path.

20. What are the CAS online courses required on the path to ACAS?

    Two CAS Online Courses: Course 1 (Risk Management and Insurance Operations) and Course 2 (Insurance Accounting, Coverage Analysis, Insurance Law, and Insurance Regulation). They are taken and passed online with a proctored exam component.

21. What is the Course on Professionalism (COP) and when must it be taken?

    A required in-person/virtual CAS course covering the Code of Professional Conduct, Qualification Standards, and ASOPs. It must be completed to attain ACAS (typically taken after passing several exams, before being admitted as an Associate).

22. What additional requirements distinguish FCAS from ACAS?

    To become a Fellow (FCAS), a candidate must first attain ACAS and then pass the additional upper-level Fellowship exams (advanced ratemaking, reserving, ERM/capital, and financial/regulatory topics). FCAS is the highest CAS credential.

23. Compare the roles and recognition of ACAS versus FCAS in U.S. practice.

    ACAS is the associate-level credential demonstrating core competence. FCAS (Fellowship) signifies full professional attainment and is typically required to sign certain Statements of Actuarial Opinion and for senior actuarial roles. Both confer CAS membership.

24. What are the continuing education and membership obligations of a CAS member to remain in good standing?

    Members must comply with the Code of Professional Conduct, meet applicable Continuing Education / U.S. Qualification Standards (e.g., 30 hours annually to sign opinions), pay annual dues, and adhere to CAS bylaws; failure can lead to suspension or loss of membership.

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