Society of Actuaries
Encyclopedia
The Society of Actuaries (SOA) is a professional organization
for actuaries
based in North America
. It was founded in 1949 as the merger of two major actuarial organizations in the United States: the Actuarial Society of America and the American Institute of Actuaries. It is a full member organization of the International Actuarial Association
.
The Society's vision is for actuaries to be recognized as the leading professionals in the modeling and management of financial risk and contingent events
. The SOA has three overall goals: providing primary and continuing education for students and practicing actuaries, maintaining high professional standards for actuaries, and conducting research on actuarial trends and public policy issues.
The SOA represents American actuaries from all major areas of practice except property
and casualty insurance
, which are represented by the Casualty Actuarial Society
.
The SOA, along with its public relations firm GolinHarris, won the PR Week
Corporate Branding Campaign of the Year award for 2008. The award was given for the Society's efforts to revitalize the actuarial profession's brand in the US, including the slogan "Risk is Opportunity."
The Actuarial Society of America was the first actuarial professional association in North America, founded in 1889 with only 38 members and headquartered in New York City
. Initial members were included by invitation, but the organization soon adopted a system of examination for qualification, with the first Fellow to qualify via exams joining in 1900.
The American Institute of Actuaries was founded in 1909. Based in Chicago
, it attracted members from life insurance companies in the midwestern and southern United States. The formation of the AIA, which (like the ASA) was geared toward actuaries in the field of life insurance, was followed within the decade by the creation of two other specialized actuarial organizations: the Casualty Actuarial Society
, which still exists today, and the Fraternal Actuarial Association which dissolved in 1980.
Between the two organizations, which came to have some overlap in membership, the number of recognized professional actuaries climbed from the initial 38 to over 1000 by the time the two organizations merged in 1949 to form the SOA. The SOA has seen continued growth since then, now recognizing over 20,000 professional actuaries as active members.
consisting of a president, president-elect, six vice presidents (one of which serves as the secretary/treasurer) and eighteen other board members. In addition, the two most recent past presidents are members of the board.
The board positions are filled by election. A member of the society is eligible to vote in board elections if they have the title of FSA, or if they have held the title of ASA for at least 5 years, and only FSAs can be elected to the board. (See the Membership section below for information on the professional titles granted by the society.) Regular board members are elected for terms of three years, and vice presidents are elected for terms of two years. The president-elect is elected for a term of one year, after which he or she becomes the president for a term of one year. The decision by the board in June 2010 (and again in the 2011 elections), to deny Tom Bakos the right to stand for president-elect, despite Mr Bakos having been nominated by dozens of members (109 in 2010) has proved controversial, and is a subject of intense debate on the Actuarial Outpost.
The employees of the SOA are headed by the executive director, a salaried position appointed by the board of directors.
, health
, and pension
areas of the actuarial profession. There are three designations offered by the Society. The two Associate-level designations are Associate of Society of Actuaries (ASA) and Chartered Enterprise Risk Analyst (CERA), which was introduced in 2007. The highest designation is Fellow of the Society of Actuaries (FSA). As of April 1, 2011, SOA membership consisted of 8,712 Associates and 13,489 Fellows.
Requirements for membership for the SOA include the actuarial exam
s, a comprehensive series of competitive exams. Topics covered in the exams include mathematics
, finance
, insurance
, economics
, interest
theory, life models, and actuarial science
. Non-members working in the actuarial profession and taking exams are often referred to as actuarial students or candidates.
Members of the SOA who meet a professional experience requirement are eligible for membership in the American Academy of Actuaries
, which represents United States actuaries from all practice areas.
. It is common for actuarial students to work full time in the profession while studying for the exams.
The first five ("preliminary") exams consist mostly of core mathematics related to actuarial science
including probability
, statistics
, interest
theory, life contingencies, and risk models.
A series of online learning modules, called the Fundamentals of Actuarial Practice (FAP), are intended to be taken after the preliminary exams. They cover real-world topics such as insurance
and professionalism with readings, case studies and projects. The preliminary exams and FAP modules comprise the majority of the education requirement for the ASA designation.
Upper-level exam topics for the FSA designation include plan design, risk classification, ratemaking and valuation
. Two fellowship exams are taken in one of five specialization tracks chosen by the candidate - Finance & Enterprise Risk Management, Investments, Individual Life Insurance & Annuities, Retirement Benefits or Group & Health Insurance.
Professional body
A professional association is usually a nonprofit organization seeking to further a particular profession, the interests of individuals engaged in that profession, and the public interest.The roles of these professional associations have been variously defined: "A group of people in a...
for actuaries
Actuary
An actuary is a business professional who deals with the financial impact of risk and uncertainty. Actuaries provide expert assessments of financial security systems, with a focus on their complexity, their mathematics, and their mechanisms ....
based in North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
. It was founded in 1949 as the merger of two major actuarial organizations in the United States: the Actuarial Society of America and the American Institute of Actuaries. It is a full member organization of the International Actuarial Association
International Actuarial Association
The International Actuarial Association is a worldwide association of local professional actuarial associations and their 64,000-odd fellows.-History:...
.
The Society's vision is for actuaries to be recognized as the leading professionals in the modeling and management of financial risk and contingent events
Contingency theory
Contingency theory is a class of behavioral theory that claims that there is no best way to organize a corporation, to lead a company, or to make decisions. Instead, the optimal course of action is contingent upon the internal and external situation...
. The SOA has three overall goals: providing primary and continuing education for students and practicing actuaries, maintaining high professional standards for actuaries, and conducting research on actuarial trends and public policy issues.
The SOA represents American actuaries from all major areas of practice except property
Property insurance
Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance or boiler insurance. Property is insured in two main...
and casualty insurance
Casualty insurance
Casualty insurance, often equated to liability insurance, is used to describe an area of insurance not directly concerned with life insurance, health insurance, or property insurance. It is mainly used to describe the liability coverage of an individual or organization's for negligent acts or...
, which are represented by the Casualty Actuarial Society
Casualty Actuarial Society
The Casualty Actuarial Society is a professional society of actuaries whose goal is "the advancement of the body of knowledge of actuarial science applied to property, casualty, and similar risk exposures." Its members are mainly involved in the property and casualty areas of the actuarial...
.
The SOA, along with its public relations firm GolinHarris, won the PR Week
PR Week
PRWeek is a weekly trade magazine for the public relations industry.PRWeek also produces research into the size and shape of the UK public relations industry including the annual ranking of Top 150 PR consultancies and Salary Survey as well as surveys into industry-relevant issues such as staff...
Corporate Branding Campaign of the Year award for 2008. The award was given for the Society's efforts to revitalize the actuarial profession's brand in the US, including the slogan "Risk is Opportunity."
History
The Society was founded as a merger of two major American actuarial associations, as reflected in its logo: the Actuarial Society of America (ASA) and the American Institute of Actuaries (AIA).The Actuarial Society of America was the first actuarial professional association in North America, founded in 1889 with only 38 members and headquartered in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
. Initial members were included by invitation, but the organization soon adopted a system of examination for qualification, with the first Fellow to qualify via exams joining in 1900.
The American Institute of Actuaries was founded in 1909. Based in Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
, it attracted members from life insurance companies in the midwestern and southern United States. The formation of the AIA, which (like the ASA) was geared toward actuaries in the field of life insurance, was followed within the decade by the creation of two other specialized actuarial organizations: the Casualty Actuarial Society
Casualty Actuarial Society
The Casualty Actuarial Society is a professional society of actuaries whose goal is "the advancement of the body of knowledge of actuarial science applied to property, casualty, and similar risk exposures." Its members are mainly involved in the property and casualty areas of the actuarial...
, which still exists today, and the Fraternal Actuarial Association which dissolved in 1980.
Between the two organizations, which came to have some overlap in membership, the number of recognized professional actuaries climbed from the initial 38 to over 1000 by the time the two organizations merged in 1949 to form the SOA. The SOA has seen continued growth since then, now recognizing over 20,000 professional actuaries as active members.
Leadership Structure
The SOA is headed by a board of directorsBoard of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
consisting of a president, president-elect, six vice presidents (one of which serves as the secretary/treasurer) and eighteen other board members. In addition, the two most recent past presidents are members of the board.
The board positions are filled by election. A member of the society is eligible to vote in board elections if they have the title of FSA, or if they have held the title of ASA for at least 5 years, and only FSAs can be elected to the board. (See the Membership section below for information on the professional titles granted by the society.) Regular board members are elected for terms of three years, and vice presidents are elected for terms of two years. The president-elect is elected for a term of one year, after which he or she becomes the president for a term of one year. The decision by the board in June 2010 (and again in the 2011 elections), to deny Tom Bakos the right to stand for president-elect, despite Mr Bakos having been nominated by dozens of members (109 in 2010) has proved controversial, and is a subject of intense debate on the Actuarial Outpost.
The employees of the SOA are headed by the executive director, a salaried position appointed by the board of directors.
Membership
The Society's members are mainly involved in the lifeLife insurance
Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger...
, health
Health insurance
Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is...
, and pension
Pension
In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.The terms retirement...
areas of the actuarial profession. There are three designations offered by the Society. The two Associate-level designations are Associate of Society of Actuaries (ASA) and Chartered Enterprise Risk Analyst (CERA), which was introduced in 2007. The highest designation is Fellow of the Society of Actuaries (FSA). As of April 1, 2011, SOA membership consisted of 8,712 Associates and 13,489 Fellows.
Requirements for membership for the SOA include the actuarial exam
Actuarial exam
Actuarial exams are a series of professional level examinations which must be passed in order to be admitted into an actuarial society, if the society has a "membership through examination" requirement...
s, a comprehensive series of competitive exams. Topics covered in the exams include mathematics
Mathematics
Mathematics is the study of quantity, space, structure, and change. Mathematicians seek out patterns and formulate new conjectures. Mathematicians resolve the truth or falsity of conjectures by mathematical proofs, which are arguments sufficient to convince other mathematicians of their validity...
, finance
Finance
"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
, insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
, economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
, interest
Interest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....
theory, life models, and actuarial science
Actuarial science
Actuarial science is the discipline that applies mathematical and statistical methods to assess risk in the insurance and finance industries. Actuaries are professionals who are qualified in this field through education and experience...
. Non-members working in the actuarial profession and taking exams are often referred to as actuarial students or candidates.
Members of the SOA who meet a professional experience requirement are eligible for membership in the American Academy of Actuaries
American Academy of Actuaries
The American Academy of Actuaries, also known as the “Academy” or the AAA, is the body that represents and unites United States actuaries in all practice areas...
, which represents United States actuaries from all practice areas.
Examination System
Professional designations in the Society are earned by completing a rigorous system of examinationActuarial exam
Actuarial exams are a series of professional level examinations which must be passed in order to be admitted into an actuarial society, if the society has a "membership through examination" requirement...
. It is common for actuarial students to work full time in the profession while studying for the exams.
The first five ("preliminary") exams consist mostly of core mathematics related to actuarial science
Actuarial science
Actuarial science is the discipline that applies mathematical and statistical methods to assess risk in the insurance and finance industries. Actuaries are professionals who are qualified in this field through education and experience...
including probability
Probability
Probability is ordinarily used to describe an attitude of mind towards some proposition of whose truth we arenot certain. The proposition of interest is usually of the form "Will a specific event occur?" The attitude of mind is of the form "How certain are we that the event will occur?" The...
, statistics
Statistics
Statistics is the study of the collection, organization, analysis, and interpretation of data. It deals with all aspects of this, including the planning of data collection in terms of the design of surveys and experiments....
, interest
Interest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....
theory, life contingencies, and risk models.
A series of online learning modules, called the Fundamentals of Actuarial Practice (FAP), are intended to be taken after the preliminary exams. They cover real-world topics such as insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
and professionalism with readings, case studies and projects. The preliminary exams and FAP modules comprise the majority of the education requirement for the ASA designation.
Upper-level exam topics for the FSA designation include plan design, risk classification, ratemaking and valuation
Valuation (finance)
In finance, valuation is the process of estimating what something is worth. Items that are usually valued are a financial asset or liability. Valuations can be done on assets or on liabilities...
. Two fellowship exams are taken in one of five specialization tracks chosen by the candidate - Finance & Enterprise Risk Management, Investments, Individual Life Insurance & Annuities, Retirement Benefits or Group & Health Insurance.
See also
- American Academy of ActuariesAmerican Academy of ActuariesThe American Academy of Actuaries, also known as the “Academy” or the AAA, is the body that represents and unites United States actuaries in all practice areas...
- Casualty Actuarial SocietyCasualty Actuarial SocietyThe Casualty Actuarial Society is a professional society of actuaries whose goal is "the advancement of the body of knowledge of actuarial science applied to property, casualty, and similar risk exposures." Its members are mainly involved in the property and casualty areas of the actuarial...
- List of learned societies