The healTh care reform debaTe, which culminated in March with the passage of the Patient Pro-

tection and Affordable Care Act and the Health Care and Education Recon-ciliation Act—collectively known as the Affordable Care Act (ACA)—was only the beginning. Since then, implementa-tion of ACA has presented new opportunities and responsibilities for the actuarial profession. The Academy’s Health Practice Council has cre-ated a number of new work groups and charged them with responding to requests for information from, and providing input to, the National Asso-ciation of Insurance Commissioners (NAIC), the Department of Health and Human Services (HHS), and other relevant parties.

While the council is planning to address the broad market reforms, mandates, premium subsidies, and exchanges that take effect in 2014, its attention over the past few months has focused on the ACA provisions that have already taken effect or that will take effect early in 2011. These include:➥   the temporary reinsurance program for early retirees,➥   the temporary high-risk pool,➥   medical loss ratio (MLR) reporting and rebates,➥   disclosure and justification of “unreasonable” rate

increases, and➥   the many near-term benefit and eligibility changes.

In addition to numerous comment letters that identify ongoing concerns, request clarifications, and offer recom-mendations as appropriate, members of these work groups have spoken with HHS, senior administration officials, and the NAIC. Much of the council’s work on these provisions

has been reported already; the following are a few of the more recent highlights.

Medical Loss RatiosThe ACA provision that

requires MLR reporting and rebates is arguably the issue

on which the council has done the most work. As the NAIC draft model regulation

was passed through the committee process, the work group issued a letter that pointed out areas

of agreement (e.g., definition of “calendar year” and granularity of rebate determination), items that deserve additional consideration (e.g., magnitude of credibility adjustments, reinsurance, and meth-odologies for contract reserves), and issues that may not have been addressed adequately (e.g., transition guidance for the individual market and identifica-tion of rebate recipients).

The NAIC approved the final version of the draft model regulation during its meeting in October and

submitted the draft to HHS for consideration. It is unclear, however, whether or how HHS will revise the regulation before issuing the final regulations. The Academy’s work group will continue to monitor the development of final regulations and provide input as appropriate.

ReinsuranceACA includes a provision that establishes a temporary reinsurance program in 2014. That provision directs the Academy to suggest alternative ways to identify high-risk individuals and determine reinsurance payment amounts. Members of the Risk Sharing Work Group have had sev-eral conversations with HHS on potential approaches for

2Raising Retirement Age Terry op-ed featured in U.S. News

New Officersacademy officers join the board

Parting Thoughtsacademy VPs reflect on past two years

Media MomentsNew academy spokespersons trained

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Implementation Phase of Health care Reform

See HeaLtH caRe RefoRM, PAge 10

The GoVerNaNce TaSk force (GTf) deliv-ered its final report to the Academy’s board of direc-tors on Oct. 5. The task force, which was reconsti-

tuted last fall by President Ken Hohman, addressed a variety of governance issues of concern to Academy members.

Academy Past President Bill Bluhm served as the chairperson of the task force. Its 14 members—selected from a pool of 85 Academy members who volunteered— represented a broad cross section of practice in the pro-

fession. The task force met twice in person and had four conference calls. It utilized the services of Phil Lesser, a consultant with experience in association governance.

The final report addresses eight major categories and makes 19 recommendations. The board will convene a special full-day meeting in early January to consider the report and its recommendations. Members are invited to read the report and submit their comments to assist the board with its deliberations.

board receives Governance Task force report

Academy NEWS Briefs

2

c a l e n d a r

OcTObeR1-2 NAAC meeting, Mont-Tremblant, Quebec, Canada

5 Academy Board of Directors meeting, Washington

5 Overview of the Dodd-Frank Act webinar (Academy)

9-13 IAA meeting, Vienna, Austria

17-20 ASPPA annual conference, National Harbor, Md.

17-20 SOA annual meeting, New York

18-21 NAIC fall meeting, Orlando, Fla.

21 Best of Up to Code webinar (Academy, ASPPA, CAS, CCA, SOA)

24-27 CCA annual meeting, Rancho Mirage, Calif.

NOveMbeR1-4 Life and Health Qualifications Seminar, Arlington, Va.

7-10 CAS annual meeting, Washington

8 Academy annual meeting, Washington

17-18 P/C Loss Reserve Opinion Seminar, Chicago

18-21 NCOIL annual meeting, Austin, Texas

DeceMbeR2 Webinar on ASOP No. 41 (Academy, ASPPA, CAS, CCA, SOA)

6 executive Committee Dinner, Washington

7 Academy executive Committee meeting, Washington

9-10 ASB meeting, Washington

JANuARy3 Council of U.S. Presidents Meeting, Washington

4-5 Academy Board of Directors Meeting, Washington

acadeMy Meets WitH tReasURy officiaLsAcademy representatives met with Assistant Secretary for financial Institutions Michael Barr and his staff on Oct. 4 to discuss the soon-to-be-created federal Insurance Office and its financial regulatory func-tion at the Treasury. During the meeting, Henry Siegel, vice president of the Risk Manage-ment and financial Report-ing Council; Mary D. Miller, regular director; Guy Barker, financial Regulatory Reform Task force member; and Academy staff Craig Hanna and Tina Getachew discussed issues surrounding the imple-mentation of the financial services reform law.

in tHe neWsWilliam Hines, the chairperson of the Academy’s International financial Reporting Standards

Task force and a consult-ing actuary for Milliman in Wakefield, Mass., discussed the International Accounting Standards Board’s exposure draft on insurance contracts in the Bureau of National Affairs’ Daily Tax Report on Aug. 2. ‘‘We urge the accounting standard setters not to pre-scribe a particular method or group of methods that must be used. Instead, they should rely on actuarial standard setters such as the Actuarial Standards Board in the united States or the International Actuarial As-sociation to provide technical guidance to the actuaries who must implement it,’’ Hines said.

Academy Senior Pension fel-low Frank Todisco and former Senior Pension fellow Ron

Gebhardtsbauer, who is now a regular director of the Academy’s board and heads

the actuarial science program at Penn State university, dis-cussed increasing the retire-ment age for Social Security in an Aug. 2 CNNMoney.com article. Todisco said that if a future retiree works an extra year for every year the retire-ment age is increased, then he or she will receive the same amount of retirement security from Social Security. Geb-hardtsbauer said that keeping the retirement age constant so that no one is affected by a change amounts to “the tail wagging the dog.”

Todisco also discussed how increasing the retirement age would affect pension plans during an Aug. 3 broad-cast of “The Takeway,” which is co-produced by WNyC Radio and Public Radio Inter-national, in collaboration with the BBC World Service, New

➜ CONTINUeD ON page 3

Links to documents underlined in blue are included in the online ver-

sion of this issue at www.actuary.org/update/index.asp

To continue receiving the Update and other Academy

publications on time, remember to make sure the Academy has your

correct contact information. Academy members can

update their member profile at the member log-in page on the Academy website.

www.actuary.org actuaria l UPdaTe octobeR 2010

TOM TeRRy, chairperson of the Academy’s Public Interest Committee, recently wrote an Op-Ed that was featured in the October issue of U.S. News & World Report. As part of the magazine’s “two takes” series, which offers two contrasting views each month on a vital public policy, Terry argued in support of addressing Social Security’s long-term actuarial imbalance in part by increasing the retirement age. The Academy first took this position in August 2008 with the release of the Academy’s position statement.

Terry, a consulting actuary and president of TTerry Consulting in Chicago, identified three demographic reasons to support increasing the retirement age: a con-tinuing increase in life spans, improved working capa-bilities because of better health, and future demand for experienced labor. As of press time, more than 53 per-cent of readers voted in a readers’ poll in favor of Terry’s position. Terry’s Op-Ed is linked in the Acad-emy Newsroom’s actuaries in the news section.

Terry Pens op-ed for U.S. News & World report

www.actuary.org actuaria l UPdaTe octobeR 2010

York Times Radio, and WGBH Boston. Todisco told listen-ers that as people are living longer, pension plans become more and more expensive to maintain. An audio recording is available in the video and audio gallery in the newsroom.

The Academy Medical Loss Ratio (MLR) Regulation Work Group’s May 14 letter to the u.S. Department of Health and Human Services regard-ing MLR issues was cited in an Aug. 2 New York Times article. The work group wrote that new MLR requirements could cause disruption to the individ-ual health insurance market.

A team of Academy spokes-persons and social insurance experts diligently worked to analyze the 2010 Medicare and Social Security trustees’ reports in order to assist reporters by providing an actuarial per-spective on the reports. These efforts resulted in media place-ments through several major business news providers and prominent NBC regional affili-ates. Among other placements, Academy Senior Pension fel-low Frank Todisco was quoted in articles by CNNMoney.com and MSNBC.com on Aug. 5. Todisco observed how newly enacted health care reform leg-islation could ultimately affect Social Security’s financial con-dition, defined the short- and long-term implications of high unemployment, and explained why Social Security’s cash flow is projected to remain negative after 2015.

Tom Wildsmith, who was recently elected the next vice president of the Health Practice Council and is a consulting actuary for the Hay Group in Arlington, Va., offered an initial actuarial perspective on the

2010 Medicare trustees’ report in an Aug. 5 Bloomberg News report. Wildsmith noted that the short-term condition of Medicare has improved but that long-term challenges remain. He said that Medicare’s hospital insurance (HI) trust fund’s date of exhaustion has been pushed back for a few years but that an underlying financial imbalance remains.

On Aug. 14, Social Security cele-brated its 75th birthday. The Bal-timore Sun marked the occasion by featuring a full-page, in-depth briefing on the Academy’s Social Security Game on the front of its business section on Aug. 15. The Sun also directed readers online to play the game and to take a survey related to the Academy’s game. The Sun followed the feature with articles on Aug. 23 and 24 that quoted Academy Senior Pension fellow Frank

Todisco. Todisco addressed is-sues related to spousal benefits and the trust fund’s investment in securities issued by the fed-eral government.

Karen bender, a member of the Academy’s Committee on fed-eral Health Issues and a princi-pal for Oliver Wyman Actuarial Consulting in Milwaukee, dis-cussed the purpose of health insurance capital and surplus in an Aug. 13 Kansas City Busi-ness Journal report, which was published by regional business journals throughout the coun-try. Bender said that surplus and capital are used to ensure health insurer solvency.

An Op-Ed by Rep. Charles W. Boustany Jr. (R-La.) published by the Washington Examiner on Aug. 18 cited an Academy letter to the u.S. Senate Com-mittee on Health, Education, Labor, and Pensions regarding

actuarial issues with the Community Living Assistance Services and Supports (CLASS) Act. The actuaries wrote that there is a “signifi-cant potential for increased ad-verse selection, necessitating further changes, which may make the program unsustain-able.” Boustany announced

that he will introduce legisla-tion—the fiscal Responsibility and Retirement Security Act (H.R. 5853)—that would re-quire the Medicare actuary to report to Congress on the fiscal solvency of the administra-tion’s final plan and require Congress to vote before it can be implemented.

3

➜ CONTINUeD FROM page 2

discipLinaRy notice

(effective oct. 25, 2010)

The Disciplinary Committee of the American Academy

of Actuaries (Academy), acting in accordance with the

Academy’s bylaws and under recommendation from the

Actuarial Board for Counseling and Discipline (ABCD),

hereby reprimands Jonathan Schwartz for materially

failing to comply with Precepts 1, 3 and 4 of the Code of

Professional Conduct.

Mr. Schwartz prepared “fiscal notes” setting forth the

cost of certain proposed state legislation relating to public

pension benefits. The fiscal notes, which fall under the

definition of actuarial communications as prescribed by the

Code of Professional Conduct and Actuarial Standards of

Practice, as prepared for clients and ultimately submitted

to legislators, failed to identify the data, assumptions

and other valuation elements upon which the notes

were based, and also lacked sufficient information that

would allow another pension actuary to opine on the

reasonableness of the fiscal notes. These deficiencies

constituted violations of applicable Actuarial Standards of

Practice and Precepts 3 and 4 of the Code of Conduct. In

addition, Mr. Schwartz reached an erroneous conclusion

concerning the anticipated financial impact of one of the

proposed bills and, after realizing his mistake, took no steps

to correct the error. This reflected a failure to exercise an

appropriate level of skill and care in violation of Precept 1.

Mr. Schwartz also made statements published in a

newspaper suggesting that his actuarial work lacks a

scientific basis, and that his conclusions are influenced

by the desired outcomes of his clients. Such statements

brought discredit upon the actuarial profession, and

violated the obligation in Precept 1 to fulfill the actuarial

profession’s responsibility to the public and uphold the

reputation of the profession.

Based on the foregoing violations of the Code of

Conduct, Mr. Schwartz is hereby reprimanded, and

directed to take a professionalism course selected

by the Academy within 6 months from the date of this

announcement, or otherwise face suspension until such

a course has been completed.

DaviD SanDbergPresident-elect

Sandberg has served in various leadership capacities for the Academy. He served on the Board of Directors as a regular director from 2002 to 2005 and as vice president of the Life Practice Council from 2005 to 2007. Over the past decade, Sandberg has par-ticipated in or chaired Academy committees, task forces, and work groups that addressed financial reporting, risk and solvency topics for life, health, and property and

casualty business, life product issues, systemic risk issues, and the risks facing public pension plans. He is a fellow of the Society of Actuaries and a vice president and corporate actuary for Allianz Life Insurance Co. of North America in Minneapolis. Sandberg will succeed Mary frances Miller as president for the 2011–2012 term.

Stephen roSensecretary

Rosen has been serving as a regular director on the Academy’s board since 2008. He also served as a special director from 2003 to 2005 while president of the American Society of Pension Professionals and Actuaries (ASPPA). Rosen is a member of the Academy’s Personnel and Compensation Com-mittee and Public Interest Committee. He is an enrolled actuary, a certified pension consultant, a member of ASPPA, and a fellow of the Conference of Consulting Actuaries. Rosen was a founding member and the first president of the American Society of Pension Actuaries Benefits Council of the Delaware Valley. He has lectured at numerous professional and actuarial conferences. Rosen is the co-author of Accountant’s Guide to Employee Benefit Plans and a book on the Tax Reform Act of 1987, as well as articles in Taxation for Accountants and the Pennsylvania CPA Journal. He founded Stephen H. Rosen & Associates in Haddonfield, N.J., in 1982. He succeeds Andrea Sweeny.

John Schuberttreasurer

Schubert was elected to serve a second year as treasurer. The former Academy vice president for health issues has served on more than 25 Acad-emy committees, work groups, and task forces over the past decade. He currently chairs the Budget and finance Com-mittee and the Personnel and Compensation Committee, and is a member of the Medi-care Steering Committee and the Committee on Retiree Health. Schubert is a specialist leader in Deloitte Consulting’s Chicago office. He is an associate of the Society of Actuaries, a fellow of the Conference of Consulting Actuaries, and past president of the Chicago Actuarial Association.

John glebaVice President for Professionalism issues

Gleba has been a member of the Council on Professional-ism since 2005. He served on the Casualty Actuarial Society’s (CAS) Committee on Profes-sionalism Education from 2002 to 2010 and as its chair from 2005 to 2008. During his time on the committee, he helped coordinate and facilitate pro-fessionalism courses for CAS candidates throughout Asia and was a facilitator for courses in Shanghai, Hong Kong, and Singapore. Gleba joined the Madi-son Consulting Group (formerly Wakely and Associates Inc.) in Madison, Ga., in 1996 as a consulting actuary, and has served as its secretary/treasurer since 2008. Prior to that, he was an actuary for the Texas Department of Insurance. Gleba’s experience includes serving on the Texas workers’ compensation oversight board, a legislative committee charged with overseeing workers’ compen-sation insurance for various state agencies. Gleba is a CAS fellow and a 2009 recipient of the CAS Above and Beyond Achievement Award. He succeeds Kathleen Riley.

NeW AcADeMy OFFIceRsThe academy’s board of directors has elected the slate of 2010

academy officers put forward by the Nominating committee. New officers will assume their duties at the conclusion of academy’s annual meeting in Washington on Nov. 8. The new officers are:

www.actuary.org actuaria l UPdaTe octobeR 2010 4

See neW acadeMy officeRs, PAge 5

www.actuary.org actuaria l UPdaTe octobeR 2010 5

thomaS f. WilDSmithVice President for HealtH issues

Wildsmith, a long-time volun-teer at the Academy, has served on more than 20 committees, work groups, and task forces during the past 13 years. He has been a member of the Health Practice Council since 1997 and has chaired the Medicare Steering Committee since 1998. He was the chairperson of the Task force on Genetic Test-

ing Issues from 1998 to 2001, and of the Pre-funding Work Group from 2001 to 2002. During his 27-year career, Wildsmith has been involved in all aspects of health insurance policy and financing. He currently is a consulting actuary for the Hay Group in Arling-ton, Va. Wildsmith is a fellow of the Society of Actuaries. He succeeds Al Bingham.

timothy l. WiSecarverVice President for ProPerty/casualty issues

Wisecarver is the chairperson of the Academy’s Communica-tions Task force and the former chairperson of the Workers’ Compensation Subcommittee. He is president of the Penn-sylvania Compensation Rating Bureau and Delaware Compen-sation Rating Bureau Inc. in Philadelphia. During Wisecarv-er’s more than 30 years as an actuary, he has been active in a number of actuarial organizations. He is the former president of the Insurance Data Management Association, the Casualty Actuaries of the Mid-Atlantic Region, and the Casualty Actuaries of the Northwest. Wisecarver is a fel-low of the Casualty Actuarial Society, the Conference of Consult-ing Actuaries, and the Insurance Data Management Association. He succeeds Gary Josephson.

New Academy Officers, continued from Page 4

➥   Padraic Malinowski, an actuarial consultant for Physicians

Plus Insurance Corp. in Madison, Wis.; Jerome Swenson,

chief actuary for Blue Cross/Blue Shield of Mississippi in

Jackson; Walter Liptak, president of Novamark Consulting

in Ponte Vedra, Fla.; and Dianna Welch, senior consultant

for Oliver Wyman Actuarial Consulting in Milwaukee, have

joined the Academy’s Small group Market Task Force.

➥   Joining the Academy’s Health Care Quality Work group

are Glen Gusewelle, an actuary for Diversified Consulting

in Overland Park, Kan.; William Bade, senior actuarial

associate for Allstate Workplace Division in Jacksonville,

Fla.; Gayle Brekke, actuarial officer for Assurant employee

Benefits in Kansas City, Mo.; Valerie Nelson, associate

actuary for Blue Cross/Blue Shield of Illinois in Chicago;

Malgorzata Jankowiak-Rosianowska, actuarial

manager for Horizon Blue Cross/Blue Shield of New

Jersey in Newark; Allan Schwartz, president of AIS Risk

Consultants in Freehold, N.J.; Adrian Clark, an actuary for

Milliman in Seattle; and Jerome Swenson.

➥   Margot Kaplan, a health actuary for the Department

of Defense in Arlington, Va., has joined the Academy’s

Medicare Steering Committee. Others joining that group

are Jeremiah Reuter, managing consultant for Ingenix

Consulting in Denver; Troy Filipek, a principal and

consulting actuary for Milliman in Brookfield, Wis.; and

Walter Liptak.

➥   James O’Connor, principal and consulting actuary for

Milliman in Chicago, has joined the Academy’s Individual

Market Task Force.

HeaLtH bRiefs

➥   Kathleen Wong, vice president and actuary for AXA

equitable Life Insurance Co. in Florham Park, N.J., has joined

the Academy’s Solvency Committee.

Risk ManageMent and financiaL RepoRting bRiefs

Thought leaders from around the world will gather at the fourth triennial Living to 100 Symposium to share ideas and

knowledge on aging, changes in survival rates and their impact on society, and

observed and projected increases in aging populations. The Academy is a participating

organization in this research endeavor.

Living to 100 symposiumJan. 5–7, 2011/orlando, fla.

for more information, go to the Living to 100 website.

Sign up by dec. 8 for early-bird discount pricing.

www.actuary.org actuaria l UPdaTe octobeR 2010 6

MAy you Live in inTereSTing

TimeS. The origin of ThiS SAy-

ing iS uncLeAr, And iTS inTenT

iS debATAbLe. Some ASSerT ThAT

iT iS PArT of A Three-foLd meS-

SAge—ThAT ThiS “wiSh” iS The firST in An eScALAT-

ing bLeSSing, The oTher Two being:

➥ May you come to the attention of those in authority.➥ May you find what you seek.

Is this a curse or a benediction?As I finish my term as the Academy’s vice president for health

issues, I must say that these times have been very interesting. The past two years have presented some of the most difficult challeng-es and the most remarkable opportunities for health actuaries. I believe these interesting times have allowed us to make a lasting contribution to health care reform.

And yes, we have come to the attention of those in authority! What would be the use, otherwise? The Health Practice Coun-cil’s usual purview has included visits to Capitol Hill, input to the National Association of Insurance Commissioners (NAIC), participation in congressional briefings, and the creation of posi-tion papers, testimony, and other public statements. The work in these interesting times, however, has gone well beyond the usual. Our audiences have included the Department of Health and Human Services (HHS), the NAIC, Congress, the admin-istration, our members, the media, and, of course, the public. Not only have these entities been receptive to Academy input, but they actively have reached out for guidance and instruction. The “Critical Issues in Health Reform” series of papers and re-lated materials the practice council produced provided a way to present our message effectively. The “Health Reform Now” website has made it easy for policymakers, Academy members, the public, and the media to stay informed.

Did we find what we sought? yes—but not because of any one person. I am honored to have worked with our outstand-ing Academy staff and a multitude of accomplished volunteers. I especially am grateful for the many people who have worked tirelessly to ensure that health actuaries have been and con-tinue to be heard. At every turn, whenever a need arose, the council and its subgroups responded with excellent work prod-ucts—often under tight deadlines.

The work with regulators, policymakers, and the adminis-

tration continues. In these interesting times, I’ve no doubt that health actuaries will continue to influence and shape the issues. The Academy, the Health Practice Council, and our volunteers are well-respected and will be sought out as trusted sources for valuable, nonpartisan, objective advice and recommendations in the days, months, and years to come. My appreciation for this unique opportunity to serve our organization runs deep, and my certainty of the dedication and resolve of our members in all en-deavors remains constant.

Take this as a benediction: May we continue to live in interest-ing times.

alfred a. bingham, the executive director of actuarial services-east at kaiser permanente in atlanta, is the academy’s outgoing vice president for health issues.

P a r t i n g t h o u g h t s

InterestIng tImes Present remarkable OPPOrtunItIesBy alfred a. Bingham

➥   Chuck Ritzke, president of Problem Solving enterprises

in West Dundee, Ill., and Timothy Pfeifer, president

of Pfeifer Advisory in Libertyville, Ill., have joined the

Academy’s Life Products Committee. Pfeifer has also joined

the Academy’s Annuity Illustrations Work group.

➥   Jonathan Pollio, vice president and chief actuary for

Citizens Inc. in Austin, Texas, has joined the Academy’s

Annuity Reserves Work group.

➥   Ying-Ying Lee, assistant actuary for the Hartford Life

Insurance Co. in Simsbury, Conn., has joined the Academy’s

Variable Annuity Reserve Work group.

➥   Lloyd Spencer Jr., vice president and research

actuary for Hannover Life Reassurance Co. of America

in Charlotte, N.C., has joined the Academy’s Valuation

Law Manual Team.

➥   Jason Kehrberg, senior consultant for Towers Watson

in Chicago, has joined the Academy’s Life Principle-Based

Approach Practice Note group.

➥   John Dieck, senior manager for KPMg in Atlanta, has

joined the Academy’s Life Financial Reporting Committee.

Life bRiefs

➥   Karen Terry, assistant vice president and actuary for State

Farm Mutual Auto Insurance Co. in Bloomington, Ill., has

been appointed chairperson of the Academy’s Committee

on Professional Responsibility.

pRofessionaLisM bRiefs

www.actuary.org actuaria l UPdaTe octobeR 2010 7

P a r t i n g t h o u g h t s

iT hAS been A PriviLege To be A voLunTeer

for The ProfeSSionALiSm grouP for The

PAST Seven yeArS And To Serve AS vice

PreSidenT of The counciL on ProfeSSion-

ALiSm for The PAST Three yeArS. i hAd big

ShoeS To fiLL when my PredeceSSor, ALLAn ryAn,

LefT To TAke A PoSiTion in Tokyo.

I became vice president a month before the new u.S. qualifica-tion standards were to go into effect on Jan. 1, 2008. The council sponsored several webinars prior to the effective date to educate actuaries on the new, more robust standards for education, experi-ence, and continuing education (CE). Since then, the council has presented quarterly webinars on professionalism topics. These webinars, which are co-sponsored by the American Society of Pen-sion Professionals and Actuaries, Casualty Actuarial Society (CAS), Conference of Consulting Actuaries, and Society of Actuaries (SOA), not only provide a low-cost way for actuaries to meet their CE requirements; they also promote the high standards of conduct, qualification, and practice the public has come to expect of actuar-ies. The webinars have ranged from topics of broad interest, such as the Code of Professional Conduct, to ones of interest to specific groups, such as retiree drug subsidy attestations for Medicare Part D. On average, the webinars have attracted some 2,500 participants.

 In the area of discipline, the council successfully advocated for the Academy to add private reprimand as a form of discipline in addition to public reprimand, suspension, and expulsion. The Academy currently is working with the other u.S.-based actuarial organizations to streamline the disciplinary process.

In an effort to raise awareness among Academy volunteers of the importance of objectivity in Academy work, the council worked to ensure the Academy’s 1,000-plus volunteers annually acknowledge its conflict of interest policy. The council is currently reviewing the policy to determine whether any changes are needed.

The council also completed a review of CAS and SOA profes-sionalism courses, providing input on both programs. The level of thoroughness each of the courses provided was impressive.

At the same time, the Applicability Guidelines, which identify standards of practice an actuary may wish to review in connection with various actuarial projects, were revised and updated with the help of the Academy’s practice councils. The guidelines are used widely by practicing actuaries and serve as an excellent resource for actuarial students.

In November 2009, the council conducted its 10th annual Life and Health Qualifications Seminar, which assists actuaries in meet-ing examination requirements and continuing education require-ments under the qualification standards. In light of the continuing value of this seminar, the Academy’s board approved conversion of this task force into a standing committee at its January 2010 meeting.

As former chairperson of the Committee on Qualifications, I particularly would like to thank committee members for their work over the past few years—not only in helping implement the revised qualification standards but also in answering the hundreds of ques-tions that have poured in about how to interpret them. I would estimate that committee members and Academy staff responded to more than 1,000 questions during this time.

I also would like to thank the dedicated volunteer chairpersons who provided outstanding leadership—Tom Bakos, Ken Kent, Es-ther Milnes, Godfrey Perrott, Karen Smith, and Richard young—as well as our talented staff at the Academy—especially Sheila Kalkunte—for their support and guidance.

kathleen a. Riley, senior vice president for the segal co. in boston, is the academy’s outgoing vice president for professionalism issues.

PrOmOtIng HIgH standards Of COnduCtBy Kathleen a. riley

hyatt regency o’harenov. 17–18, 2010 | chicago

Following up on last year’s success, the Acad-emy’s annual seminar on casualty loss reserve opinions again will be divided into two parts. The first day’s sessions will cover foundational

topics, while the second day will focus on more advanced subjects. Participants may register for

either or both days of the seminar. The seminar is presented annually by the Academy’s Committee

on Property and Liability Financial Reporting.

for more information, visit www.actuary.org/seminars/casualty/opinion10.asp.

p/c effective loss reserve opinions Seminar: tools for the

appointed actuary

www.actuary.org actuaria l UPdaTe octobeR 2010 8

P a r t i n g t h o u g h t s

WhAT do crediT Scoring, Ter-

roriSm inSurAnce, And The

deePwATer horizon oiL SPiLL

hAve in common? They were

ALL ToPicS on which commiT-

TeeS of The AcAdemy’S cASuALTy PrAcTice coun-

ciL Provided STATemenTS AT governmenTAL or

reguLATory heAringS ThiS yeAr.

I have heard it said that the Academy’s activities in the prop-erty and casualty area are focused largely on providing support and guidance to casualty actuaries who issue statements of opinion on statutory loss reserves. It is true that the Academy’s Committee on Property and Liability financial Reporting produces important products for opining actuaries (e.g., the law manual, practice notes, and seminars for appointed actuaries). Other committees and sub-committees, however, play an equally important (if less visible) role in representing the actuarial profession in a variety of areas. Con-sider the following 2010 activities:➥ The Terrorism Risk Insurance Subgroup provided comments to

the President’s Working Group on financial Markets in response to its request for an analysis of terrorism risk insurance.

➥ The Risk-Based Capital Committee discussed changes in the risk-based capital formula during a two-day meeting of the Solvency Modernization Initiative Subgroup of the National Association of Insurance Commissioners’ (NAIC) Capital Adequacy Task force.

➥ The Casualty Practice Council testified on S. 3305, the Big Oil Bailout Prevention Liability Act of 2010, during a hearing held by the Senate Committee on Environment and Public Works.

➥ The Medical Professional Liability, Workers’ Compensation, Auto Insurance, and Property and All Other Lines subcommit-tees jointly submitted a comment letter to the House sponsors of the Health Industry fair Competition Act encouraging them to retain the antitrust exemption for medical professional liability insurers and describing how the repeal of that exemption could affect casualty lines of insurance.

➥ The Workers’ Compensation Subcommittee sent a comment

letter to the California Commission on Health and Safety and Workers’ Compensation that addressed the integration of work-ers’ compensation into the group health model.

These activities illustrate the breadth of topics for which the Academy is serving the public on behalf of the actuarial profession.

A major challenge lying ahead of us is regulatory reform. The NAIC’s solvency modernization initiative is a comprehensive review of the u.S. solvency regulation framework. The Academy is closely following the NAIC’s initiatives. Whether through cross-discipline issues, via committees of the Risk Management and financial Re-porting Council, or through casualty-specific issues handled by com-mittees of the Casualty Practice Council, we are working to ensure the actuarial voice is heard on this important initiative.

It has been a privilege to serve as the Academy’s vice president for casualty issues for the past two years. We are blessed with a group of dedicated, hardworking volunteers who are willing to “toil in the trenches” on our committees. The Casualty Practice Council has a group of actuaries with both the depth and breadth of experience to ensure that we respond to the relevant issues in the appropriate way.

I particularly would like to thank Lauren Pachman, policy ana-lyst, and Craig Hanna, director of public policy, for their support of the Casualty Practice Council’s activities. Craig and Lauren not only serve as our “ears to the ground” in identifying issues that need our attention, but they also help to make sure that our voice is heard in the appropriate forums.

gary R. Josephson, consulting actuary for Milliman inc. in brookfield, Wis., is the academy’s outgoing vice president for casualty issues.

brIngIng brOad exPerIenCe tO bearBy gary r. Josephson

➥   Chad Hueffmeier, an actuary in New York, and David Cantor, an actuary for PricewaterhouseCoopers in New

York, have joined the joint Academy/Society of Actuaries

Pension Finance Task Force.

➥   Joshua Shapiro, deputy director for the National

Coordinating Committee for Multiemployer Plans in

Washington, D.C., has joined the Academy’s Multiemployer

Subcommittee.

➥   Ali Zaker-Shahrak, senior life actuary for the California

Department of Insurance in Los Angeles, has joined the

Academy’s Social Insurance Committee.

pension bRiefs

➥   Donna Novak, president and chief executive officer of

NovaRest Inc. in Sahuarita, Ariz., has joined the Academy’s

Actuarial Soundness Task Force.

casUaLty bRiefs

www.actuary.org actuaria l UPdaTe octobeR 2010 9

cuRTIs e. HuNTINGTON, vice chairperson of the Actuarial Board for Counseling and Disci-

pline, is the 2010 recipient of the Harry T. Eidson founders Award from the Ameri-can Society of Pension Professionals and Actuaries (ASPPA). ASPPA recognized Huntington for his contribution to the private retirement system at its annual conference on Oct. 17.

Huntington has been a member of the Council on Professionalism since 1996. He is also a member of the Joint Committee on International Actuarial Association Coordination and the Joint Committee on the Code of Professionalism Conduct.

Huntington served as chief auditor, vice president, and corporate actuary for New England Mutual Life Insurance Co. in Boston until his retirement in 1993. Since then, he has been a professor of mathemat-ics at the university of Michigan. He also serves as director of the Actuarial Mathe-matics Program and the financial Math-ematics Program and executive director of the Michigan Pension Education Training Program. Huntington holds a bachelor’s degree in mathematics and a master’s degree in actuarial science from the uni-versity of Michigan. He also earned a juris doctorate degree (cum laude) from Suffolk university in Boston.

fiVe academy memberS attended media training courses in early October as part of the Academy’s

official spokesperson program. Participating in the intensive daylong sessions were Acad-emy President-elect David Sandberg, a vice president and corporate actuary for Allianz Life Insurance Co. of North America in Min-neapolis; John Gleba, vice president of the Council on Professionalism and a consulting actuary for Madison Consulting Group in Madison, Ga.; and Linda Lankowski, a mem-ber of the Academy Life Products Commit-tee. Also receiving training on behalf of the Conference of Consulting Actuaries (CCA) in partnership with the Academy were Donald fuerst, president-elect of the CCA, and Adam Reese, president of the CCA and a senior con-sultant at the Hay Group in Arlington, Va.

These members will join the Academy’s list of volunteers who can respond to calls from the media seeking actuarial expertise on public policy and professional issues. The media training helps prepare the volunteers to serve as official spokespersons on specif-ic issues. During the training, participants learned how to speak with the news media by responding to questions in mock inter-views conducted by an experienced televi-sion anchor and reporter.

“The training was challenging and in-formative,” Gleba said. “I now have a much greater appreciation for the media and how to stay focused to deliver a message that is both precise and useful for a target audience.”

Every conversation with a reporter is an opportunity to advance the Academy’s mes-sage, says Andrew Simonelli, the Academy’s assistant director of communications for

public affairs. Simonelli organized the media training, which was conducted by Oratorio, a Washington-based media and presentation training organization. “During media train-ing, we work to provide Academy spokes-persons with the necessary skills to seize each opportunity to promote the Academy and its public policy and professionalism agendas,” Simonelli said.

speaking for the Academy

linda lankowski participated in a mock interview with a media trainer.

huntington honored

associate editoRs

William CarrollPatrick CollinsAndrew ErmanRade MusulinGeoffrey SandlerDonald SegaleditoR

Olivia Marshall(editor@actuary.org)design and pRodUction

BonoTom Studio Inc.

designeR

Paul Philpott

MaRketing and pUbLication pRodUction ManageR

Cindy Johns

American Academy of ActuariespResident

Ken HohmanpResident-eLect

Mary frances MillersecRetaRy

Andrea SweenytReasUReR

John SchubertVice pResidents

Al BinghamGary JosephsonEthan KraArt PanighettiKathleen RileyHenry SiegelexecUtiVe diRectoR

Mary DownsdiRectoR of coMMUnications

Mark Cohenassistant diRectoR foR pUbLications

Linda MallonexecUtiVe office

The American Academy of Actuaries1850 M Street NWSuite 300Washington, DC 20036Phone 202-223-8196fax 202-872-1948www.actuary.org

Statements of fact and opinion in this publication, including editorials and letters to the editor, are made on the responsibility of the authors alone and do not necessarily imply or represent the position of the American Academy of Actuaries, the editors, or the members of the Academy.

©2010 The American Academy of Actuaries. All rights reserved.

www.actuary.org actuaria l UPdaTe octobeR 2010

Actuarial update

10

alternative methodologies. Those approaches were outlined in a preliminary comment letter to HHS.

In its comments, the work group examined sev-eral approaches for identifying high-risk individu-als. These included using a preset:➥   list of conditions based on diagnoses,➥   list of conditions based on self-reported answers

to a questionnaire,➥   risk-score threshold, and/or➥   threshold of actual health care costs or utilization.

Methods for determining reinsurance payments include prospective payments using a fixed sched-ule by condition and/or applying an attachment point, coinsurance percentage, and a ceiling. The work group evaluated each of these options by a set of criteria developed by the work group—cost control incentives, alignment of payments to risk, interaction between risk-sharing mechanisms, in-teraction with traditional reinsurance, and adminis-trative burdens, among others. The work group will continue to work with HHS as it develops regula-tions related to the program.

other topicsThe Benefit and Eligibility Changes Work Group has commented on several interim final regula-tions that have been issued on the ACA provisions that took effect on Sept. 23: elimination of preex-isting condition exclusions for children younger

than 19, elimination of lifetime limits and restric-tions on annual limits, prohibition on rescissions, the requirement of first-dollar coverage for pre-ventive services, and extension of dependent cov-erage to age 26. In addition, the Exchanges Work Group responded to HHS’ recent request for com-ments related to the planning and implementation of exchanges.

glossary of Health-Reform termsWhile most of the council’s recent letters are tech-nical and targeted to policymakers and regulators working on implementation, the council is also aware of the need to make technical issues more understandable for the general public. The coun-cil is developing educational material, including a reform glossary that defines and explains the impli-cations of such terminology as “actuarial equiva-lence,” “adverse selection,” “guaranteed issue,” and “risk adjustment.”

The health care reform implementation will be a long process, with many of the critical provisions not effective until 2014. The Health Practice Coun-cil will continue to offer input and work to ensure that the actuarial perspective is understood by policymakers, regulators, the media, and the pub-lic—and that the actuarial perspective is reflected in relevant regulation.

—heather JerBi

Health care Reform, continued from Page 1

The acTUarial foUNda-TioN’S “Building your future” curriculum received the 2010

Excellence in financial Literacy Edu-cation (EIfLE) Award, Curriculum of the year, in the K–12 general category from the Institute for financial Liter-acy, a national authority on financial education. The EIfLE Award, presented in Octo-ber, acknowledges innovation, dedication, and a strong commitment to financial literacy education.

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