CIA Members Rob Stapleford, Chair Task Force on Continuing Professional Development (CPD) Review Date: January 19, 2017

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1 MEMORANDUM To: From: CIA Members Rob Stapleford, Chair Task Force on Continuing Professional Development (CPD) Review Date: January 19, 2017 Subject: Member Consultation Proposed Changes to the Continuing Professional Development (CPD) Requirements Document Introduction In June 2016, the CIA Board created the Task Force on Continuing Professional Development Review (TF) with a mandate to review the CIA s overall approach to Continuing Professional Development (CPD). The Board decided to continue this initiative to reassess CPD after it decided not to proceed with the potential changes on which members were consulted in The member consultation provided valuable input on CPD that the Board wanted to take into consideration as the CIA s approach to CPD was strengthened. The task force produced several recommendations for the Board s consideration in December The Board approved the release of the recommendations to members for input, before finalizing the proposed changes. Members are asked to provide comments on the proposed recommendations no later than March 3, The result of the member consultation as well as any bylaw amendments required to implement the task force s final recommendations will be brought to the Board in March. If approved, member confirmation of the necessary bylaw amendments would be planned by electronic proxy vote in advance of the June 21, 2017 CIA Annual Meeting in Québec City and on site at the meeting s General Business Session. Task Force Approach The members of the task force were as follows: Rob Stapleford (Chair) Jeremy Bell Robert Boeckner Maxime-Frédéric Brochu-Leclair Allen Hornung Carol Moellers Terry Narine Dean Newell Marc Tardif Rémi Villeneuve Lisa Zwicker Albert, Ottawa, ON K1R 7X head.office@cia-ica.ca / siege.social@cia-ica.ca cia-ica.ca

2 They were selected to obtain diverse perspectives on CPD requirements from members at different stages of their careers, in different practice areas, and with differing viewpoints to ensure a thorough review. The work of the task force began with an overall review of the CIA s current CPD requirements and the input received from members during the consultation on the protection of the public interest in In addition, the task force looked at the CPD requirements of other organizations including the Society of Actuaries (SOA), the American Academy of Actuaries (AAA), the Casualty Actuarial Society (CAS), the Actuaries Institute Australia (AIAust), the Institute and Faculty of Actuaries (IFoA) in the UK, and the Chartered Professional Accountants (CPA) Ontario. The task force had open and frank discussions about several contentious issues that were under consideration. Several differing viewpoints were expressed, particularly with regard to eligibility for exemption from CPD. Some members of the task force felt strongly that the integrity of the FCIA/ACIA brand should outweigh any need to ensure that retirees, in particular, could continue to use the designation without doing CPD. The recommendations are a culmination of extensive and intense discussions and ultimately, represent a compromise of these varied viewpoints which the task force feels is a good solution for the majority of members. Task Force Key Recommendations The specific recommendations being proposed by the task force are included at the end of this memo, along with the associated rationale. The following provides context in the form of the general principles related to the proposed approach. Guiding Principle All CIA members must satisfy CPD requirements unless they meet specific exemption criteria. This approach supports the brand of the FCIA/ACIA designation as being current. Passing initial examinations is a requirement for entry into the profession but continued education is required to maintain the FCIA/ACIA designation. The task force believes that the proposed approach is reasonable for actuaries working in all roles. Exemptions Members who meet specific criteria would apply to be exempted from CPD requirements. The Committee on Professionalism (PROF) would assess requests and grant exemptions. Members could apply for an exemption as soon as they feel they qualify (i.e., throughout the year) to ensure that they would indeed satisfy the exemption requirements. This approach would represent a major change from the current approach whereby members indicate that they qualify for exemption, and simply claim it. Those eligible for exemption would include retired members, members on family leave, or members facing personal challenges such as disability. The PROF would also be able to grant exemptions for unique situations. 2

3 Consequences of Non compliance Members who do not meet CPD requirements would have their membership in the CIA suspended. Such members would not be able to use their FCIA/ACIA designation. The task force concluded that the consequences of non-compliance must be meaningful. Reinstatement provisions exist. This change would require bylaw amendments. Note that a member would not be suspended as of the first day of CPD non-compliance. The member would be contacted and afforded an opportunity to provide a plan to remedy the noncompliance. The current approach to CPD includes remedy plans, but greater communication to members is required to ensure that they are aware of their options in this regard. CPD Requirements The task force recommends a reduction in the total number of required CPD hours from 100 over two years to 80 hours. The two-year reporting period would be maintained. The current requirements also stipulate that the member must perform 24 hours of structured CPD within the two-year period. The task force is proposing to increase the amount of structured CPD to 40 hours (i.e., 50 percent of overall CPD). These recommendations arise from a comparison of CIA requirements with those of other organizations. The CIA s total required hours were high compared to other associations, whereas the portion of structured CPD was low. The task force believes that the proposed requirements would add to the robustness of the CIA requirements while reducing reporting requirements and also bring the CIA more in line with the percentage of structured hours required by other actuarial associations (e.g., SOA, IFoA). CPD Activities More communication on qualifying CPD activities is required. Anecdotal evidence suggests that many members believe that attending actuarial meetings is required to obtain structured CPD. Meetings may involve substantial cost and time for members to attend, so that many members are concerned if meetings are the sole source of structured CPD. A summary of suggested activities that could qualify as CPD is included in appendix B. The task force believes that many of the concerns about CPD will be reduced with greater flexibility and awareness of what constitutes accepted CPD activity. Determination of Relevant CPD There is no change in the requirement that the individual member is expected to determine what CPD is relevant to them. The task force had substantial discussions regarding whether there should be some type of mandated traditional actuarial CPD for members who may be practising in emerging areas. The task force did not think that it would be appropriate to mandate such CPD, which may have no relevance to the member s work. The task force also felt that it could not define such generic actuarial content nor be able to identify members who would need to do such CPD. Allowing members who are working in emerging areas of practice to define what CPD is relevant for them is also in line with the Board s current strategic focus on emerging practice. 3

4 Professionalism CPD The task force is proposing that the CIA develop a two-hour professionalism module (see appendix A) that can be delivered on an individual basis. All non-exempt members would be required to complete this module every two years. This module would cover professionalism topics such as rules of professional conduct and changes thereto, so that all members (unless exempted) are aware of the expectations for actuarial professionals in Canada. New case studies would be added over time for members to choose from. In addition to helping actuaries in traditional actuarial practice obtain their required professionalism CPD (four hours every two years), the task force feels that this approach ensures that those who are working in emerging areas or in traditional roles who do not regularly focus on their actuarial skills (e.g., management roles) remain in touch with the expectations of a professional who holds the FCIA/ACIA designation. Member Communication Member input on the proposed bylaw changes in 2016 related to the proposed FCIA (Nonpractising) designation (protection of the public interest) indicated that more information and better communication regarding the CPD requirements and options for compliance is needed. Implementation of a new approach to CPD must be accompanied with effective member communication on issues such as what qualifies as acceptable CPD, guidance on structured vs. unstructured CPD, expectations regarding exemptions, etc. Protection of the Public Interest The proposed recommendations allow for all members to maintain the use of the ACIA/FCIA designation, regardless of whether or not they qualify for an exemption from the CPD requirements. In order to ensure that a member s qualifications are more accessible to the public, additional details would be added in the CIA public member directory regarding a member s identified area(s) of expertise, similar to the current structure in the Hire an Actuary web tool. All members would be asked to show a primary and secondary (if applicable) area of expertise. This additional information would be required annually at the time of submitting the CPD Compliance Statement or paying annual dues and would be mandatory for all members. Exempt members would then clearly be shown as such, with no active areas of practice indicated. Member Input Sought In addition to general input on the proposed recommendations, the task force is also seeking specific member input in the following areas: 1. What are your thoughts on the increase in structured hours (from 24 to 40 hours over two years), coupled with the overall reduction in the total number of hours required (from 100 to 80 hours over two years)? Also, do you feel that you have a clear understanding of what would be considered structured CPD? 2. The task force has received feedback that it is difficult for some members to find sufficient professionalism CPD. What are your thoughts on the new proposed core professionalism CPD component which would provide members with two of the four hours required to meet 4

5 the professionalism CPD requirement? Would you find this helpful in meeting your professionalism CPD needs? 3. Is there sufficient flexibility in the proposed requirements to allow members practising in non-traditional areas to adequately meet the requirements? Is there too much flexibility? 4. Are you comfortable with the January 1, 2018 implementation date, which would mean that you would need to be in a position to attest to meeting the new requirements as of January 1, 2019? 5. What possible enhancements could be made to the CPD tracking tool to make reporting CPD activities easier and more effective? 6. Are there any areas related to CPD requirements, activities, or reporting and compliance obligations where you would like to have additional information and/or communication? Also, what type of communication in this regard would you find most helpful (i.e., regular announcements, specific, targeted s on CPD topics, website postings, social media, etc.)? Next Steps In order to meet the proposed January 1, 2018 implementation date, the following timeline is suggested: 1. Conduct formal member consultation beginning in January 2017 and obtain member feedback by March 3, Present the final draft of proposed changes, including any required bylaw changes to the Board for review and approval at its March 23 meeting. 3. Seek member confirmation of bylaws at the CIA Annual Meeting on June 21, 2017 in Québec City. 4. Distribute a full information package to members by October 31, New CPD requirements take effect on January 1, First CPD Compliance Statement to be filed under new requirements in January Action for Members Members are asked to review and consider the proposed changes and provide comments no later than March 3, 2017 using the online form (remember to login to the members site first) or by e- mail to Lynn Blackburn, director, professional practice and volunteer services at lynn.blackburn@cia-ica.ca. All members are encouraged to take the necessary time during this consultation period to understand these important proposed changes and to share their thoughts. RS 5

6 Task Force on CPD Review (TF) Recommendations and Rationale Topic Recommendations Rationale/Considerations Applicability CPD should be mandatory for all FCIAs/ACIAs regardless of whether or not they are providing professional services of an actuarial nature, unless they apply for, and are granted an exemption. Anyone acting in a reserved role must do CPD, must file a statement, and must submit their record of activity (i.e., no exemptions allowed). Exemptions from compliance with CPD Members would have to apply for an exemption, rather than simply claim one. The Committee on Professionalism (PROF) would assess and grant all exemptions. Formal assessment procedures for the granting of exemptions, as well as sample filings, case studies, etc. would be developed and circulated to members for information. The only categories where an exemption would be granted are the following: o Retirement (no annual renewal of exemption required unless member s circumstances change); The designation identifies ACIAs and FCIAs as business professionals with specific financial expertise and represents a certain qualification level that the public expects. The designation is not like a bachelor s degree that once granted requires no further maintenance (i.e., it s not unconditionally granted for life). The TF believes that senior managers and members in non-traditional or non-actuarial roles should comply using CPD that is relevant to their role. It was also noted that a senior manager in the financial industry is likely already doing CPD that would be applicable. The task force briefly considered whether or not CIA Board members should be CPD compliant. It was agreed that the Board eligibility issue goes beyond CPD requirements. An application process for an exemption will ensure exemptions are valid a larger burden of proof will fall to the member to defend why they qualify. Application for exemption could be submitted as soon as the member feels he or she qualifies (i.e., throughout the year) to ensure that they would indeed satisfy the exemption requirements. Many retirees have no intention of practising. Consider an elderly retiree living in a retirement home. The CIA does not want to drive people away, which would be the case if no exemptions were provided. The optics of suspending someone on an approved leave 6

7 o Family leave; and o Special circumstances. Retirement criteria would include the following, but would ultimately be at the discretion of the PROF: o Not actively at work for pay. Casual employment (e.g., golf course marshal) would be excluded; o In receipt of retirement income; o Not seeking employment in a position involving the provision of actuarial services; and o Not providing professional services of an actuarial nature for pay. When a member is providing services in an area that may utilize actuarial skills in a not-for-pay situation (e.g., serving on a board of directors), the member is obligated to use their discretion in determining whether they should be obtaining CPD if users are relying on or could reasonably be expected to rely on the member s skills and experience as an actuary. Members would also be asked, when filing for an exemption, to indicate the type of not-for-pay work they are planning to do. Family leave criteria would be the following: o Not actively at work for pay and caring for a family member full-time; o Standard leave would be one year; o CPD clock stops while on leave (i.e., upon return from a one-year leave, the member would be allowed to use CPD from the (e.g., parental leave) are not good and could even be illegal (no formal research done on this, however). The public is well protected through Rule #2 in the Rules of Professional Conduct, in conjunction with the proposed communication of CPD status and area of practice and greater control of the exemption process. The CPD process would be substantially strengthened with this proposal. We do not need to expend substantial effort in trying to address every situation. A formal reinstatement process would ensure remedies have been completed. 7

8 previous three years instead of two); o May apply for additional exemption time, if applicable; and o Upon return to non-exempt status, the member would need to file a remedy plan if they did not remain compliant. Special circumstances criteria would be at the discretion of the PROF, but would include cases of disability, for example. Procedures for the reinstatement following exemption would be established. All exempt members would still be required to do the minimum professionalism/ethics CPD while exempt (two hours every two years see Requirements section below, as well as appendix A). CPD compliance should not be linked to waiver of dues categories. Remedy plans A formal process would be developed around remedy plans to enable members to become compliant within a given time period. A time limit of 4 6 months would be standard (best practice), but would remain at the discretion of the PROF. A member would remain in good standing (i.e., no suspension of membership) while completing a remedy plan. Consequences of non-compliance A formal remedy plan would have to be submitted, approved, and followed by a member who does not meet the minimum CPD requirements. If, after remedy attempts, a member is still noncompliant, suspension of membership would occur Every effort should be made to help members be compliant. The system must have enforceable consequences in order for it to be effective. After several follow-ups and the potential for remedy, it seems to be a reasonable consequence to suspend membership. 8

9 (bylaw changes required). Non-filing=non-compliance (i.e., straight to suspension after requisite follow-ups if no response is received). Procedures for reinstatement following suspension would be established. Requirements 80 hours over the previous two calendar years, which would include the following: o 40 hours of structured CPD; o 10 hours of relevant technical CPD which could be structured or unstructured; and o Four hours of professionalism and ethics CPD (see appendix A for additional info). There would also be a required minimum of 20 hours of CPD obtained each year (structured and/or unstructured). Annual filing remains. The non-resident CPD option would remain. A member who o Does not reside in Canada; o Does no work in Canada, as defined in subsection 1230 of the General Standards; and o Is a full member, at the highest available level, of another International Actuarial Association (IAA) full member association that has established CPD requirements, may choose to comply with that other association s CPD requirements in lieu of compliance with the CIA s CPD requirements. If the member is not required by the other association to meet its CPD requirements, the member must voluntarily follow the other association s CPD requirements. A formal reinstatement process would ensure remedies have been completed. The Committee on Professional Conduct (CPC) would get involved if a member continued to practise after suspension, as part of a reinstatement process. In line with the requirements of other organizations. Fewer overall hours, but more structured hours. Seen to better meet public expectations. Recording of CPD activities would be somewhat less onerous with fewer hours. Better communication regarding the definition of structured and other types of CPD will be needed. The professionalism requirement outlined in appendix A is being introduced, in part, to maintain a link to the actuarial profession for those in emerging or nontraditional areas of practice. 9

10 (Note that this would no longer be considered an exemption from CIA CPD requirements, but rather a different path to compliance, and it would be presented as such.) Relevance of CPD It will continue to be up to the individual to determine what CPD is relevant to them and to the work that they do. Types of CPD Relevance is key. Samples of the various types of CPD (i.e., structured, unstructured, technical, professionalism) are provided in appendix B. Audits Increase number of members audited from 1 percent to 3 percent. The increased workload would require additional volunteer resources on the PROF. Formal assessment criteria and audit procedures would be developed and circulated to members for information. Enforcement/ administration Appropriate changes to the bylaws and Rules would be made to ensure that non-compliant members can be suspended and not automatically reported to the CPC for a breach of Rule 2. There would be no ability to file a statement indicating non-compliance since such a statement would lead to suspension of membership. Doing CPD which is not relevant to the member s work is not productive or appropriate in ensuring that the member is qualified. The member s choices of CPD are, however, subject to audit by the PROF, to ensure that the member is doing appropriate CPD that is indeed relevant to their work. The TF is focusing on identifying good sources of CPD opportunities that members may not be aware of. Enhanced communication to members about CPD programming and acceptable forms of CPD will be required. Need to ensure and enforce more strongly that CPD must be appropriate, relevant to the member, and properly documented. Opportunity for educating members regarding CPD best practices. Increased number of audits would increase the likelihood that each member would be audited at least once in their professional career. CPD compliance enforcement should be an administrative process, with consequences similar to failing to pay membership dues. 10

11 Communication with the Public CPD compliance status would continue to be publicized in the CIA public member directory on the CIA website (i.e., fully compliant or exempt). Additional details would be added in the CIA public member directory regarding a member s primary and secondary identified area(s) of expertise, similar to the current structure in the Hire an Actuary tool. This additional information would be required annually at the time of submitting the CPD Compliance Statement and would be mandatory for all non-cpd-exempt members. As new practice areas emerge and are submitted by members, they would be added to the list of areas in which actuaries are practising. Members practising in these emerging areas would also be audited in order to appropriately assess and define these emerging areas. Non-compliant members would no longer appear in the directory since they will have been suspended. CPD tracking tool Identified improvements need to be implemented in the customer relationship management (CRM) system. Members should be specifically consulted on additional enhancements during the upcoming CPD consultation process related to these proposed changes. Communication of a member s identified primary and secondary (if applicable) area(s) of expertise in the member directory will help to educate the public who may search the CIA website for member qualification information. All work on the current CPD tracking tool was suspended pending CRM implementation. 11

12 Appendix A Draft Core Professionalism Requirements Goal: To develop a self-directed core professionalism CPD requirement that all non-exempt members would be required to complete every two years. In addition to helping actuaries in traditional actuarial practice obtain their required professionalism CPD (four hours every two years), these requirements should also help ensure that all members practising in non-traditional areas, working in management, or working in an unrelated profession (e.g., web development) have some ongoing connection to the Institute and/or profession. The requirements must be flexible enough to ensure that it is relevant to all members, regardless of what work they do, while still linking to the professional aspects of actuarial practice. Recommendation: Delivery: Proposed Content: Actuarial case studies Two hours of CPD to be completed every two years addressing core principles that relate to the practice of a professional actuary. The content would be delivered via an e-learning platform, webcasts, reading, and self-reflection. Some evidence of completion would need to be submitted and possibly formally reviewed by the Committee on Professionalism, with feedback provided to the member. Consider and apply the ethical decision-making framework (EDMF) (developed by Diane Girard) to two case studies. Several case studies would be provided that the member could select from. New case studies would be generated each year by the Education/Continuing Education Committees. The goal is to enhance understanding of professionalism and ethics and what it means to act in the public interest. Do members understand the implicit notion of a social bargain by considering the most vulnerable? Case studies would be primarily actuarial in nature, to ensure some linkage back to the profession for those working in unrelated fields. Rules of Professional Conduct would also be required reading. Self-reflection: application of actuarial principles to current role Members would be asked to consider how their actuarial education and experience and professionalism orientation helped them to deal with a particular situation within the last year. They could potentially use the EDMF mentioned above or some other standardized format for activity submission and review. The goal is for the member to make a conscious effort to relate their actuarial skills/expertise as a professional to the job that they are currently performing. Even if it 12

13 is unrelated, there should be some professional principles that they can apply (e.g., objective and impartial opinion, skilled technical/business expertise, balancing needs/pressure from various stakeholders with differing objectives, applying judgement). Review CIA documents (unstructured) This component would include the review of the Rules of Professional Conduct, Standards of Practice, etc., each year. It could also include work of a council or committee, the Actuarial Standards Board (ASB), or other CIA activities in general (particularly professionalism-related content). The member could be expected to specifically acknowledge awareness of and/or having read any specific bylaw or rules amendments that were published during the reporting period, as part of the CPD compliance statement filing process. 13

14 APPENDIX B - Types of CPD Examples All examples provided below are meant to be potential types of CPD. They may be appropriate for some members and less so for others. Ultimately, the member must decide if the CPD opportunity is relevant and whether new learning is truly achieved. Structured CPD (defined as opportunities where there is potential for an exchange of opinions) Attending meetings and seminars; Attending webcasts; Communication training; Published professional work; Writing articles or academic work; Participation on technical committees; Attending employer-sponsored training or learning sessions; Formal study leading to a degree (i.e., attending a class); Planned meeting with colleagues, mentors; and Preparation to teach a course or to speak on a relevant topic for a meeting, webcast, or other structured activity. Unstructured CPD On-the-job training (i.e., learning new things in the course of your work); Unplanned discussions with colleagues, mentors; Self-study for a class or an exam; Casual reading of journals; Volunteer activity for an actuarial organization; and Self-study on any relevant topic. Relevant technical forms of CPD (**NEW**: Technical CPD can now come from structured or unstructured sources.) Any activity related to expanding knowledge in the member s area of practice, including non-traditional areas; Attending a workshop session at a meeting or seminar; Attending webcasts on practice-related topics (i.e., segregated fund modelling, own risk and solvency assessment (ORSA), IFRS, predictive modeling,, object-relational mapping (ORM), etc.); 14

15 Review of standards of practice, guidance material, or research; Other practice-related reading, study or research (e.g., new techniques or methodologies in your area of practice); Preparation of exam syllabus, the exam itself, or for exam grading; Preparation to teach a course or to speak on a technical topic for a meeting or webcast; Technological learning (i.e., learning new software related to your practice area); and Volunteer activity on a technical committee or task force within the CIA (e.g., Committee on Life Insurance Financial Reporting (CLIFR), Committee on Pension Plan Financial Reporting (PPFRC), Committee on Property and Casualty Insurance Financial Reporting (PCFRC), Climate Change and Sustainability Committee (CCSC), Enterprise Risk Management Committee (ERMC), Actuarial Evidence Committee (AEC), etc.) or outside of the CIA with other organizations (e.g., Canadian Life and Health Insurance Association (CLHIA)). CPD that would NOT be considered traditional Technical CPD Activities related to improving business acumen; Activities related to developing communication skills; and Activities related to building leadership abilities. Unacceptable Forms of CPD General reading of a newspaper; or Day-to-day work which does not involve new learning 15