AMERICAN ACADEMY Of ACTUARIES 1979 Year Book PG^,qEMY ti CO 1965 FEBRUARY 1, 1979 When we build, let it be such work as ourdescen- dantswillthankusfor:andletusthink,as welaystone on stone, that the time will come when men will say as they look upon the labor and the substance, "See! this ourfathers didforus." JOHN RUSKIN AMERICAN ACADEMY Of ACTUARIES 1979 Year Book PUBLISHED BY THE ACADEMY ExecutiveOffice Administrative Office 1835KStreet,N.W. 208SouthLaSaileStreet Washington,D.C. 20006 Chicago,Illinois60604 FEBRUARY 1, 1979 MADE IN THE UNITED STATES OFAMERICA TABLE OF CONTENTS HISTORY . . . . . . . . . . . . . . . . . . . . BOARDOFDIRECTORS . . . . . . . . . . . . . . . ACADEMYHEADQUARTERSANDSTAFF . . . . . . . . . . . STANDING COMMITTEES . . . . . . . . . . . . . . . SPECIALCOMMIT'TEES . . . . . . . . . . . . . . . . 16 JOINT COMMITTEES . . . . . . . . . . . . . . . 18 PAST OFFICERS . . . . . . . . . . . . . . . . . . 20 FUTURE ANNUALMEETINGS . . . . . . . . . . . . . 22 MEMBERSHIPSTATISTICS . . . . . . . . . . . . . . . 23 IVjEMBERSHIP, FEBRUARY 1, 1979. . . . . . . . . . . . 25 B3tLAws . . . . . . . . . . . . . . . . . . . . . 267 PRESCRIBEDEXAMINATIONS . . . . . . . . . . . . . . 277 GUIDESTOPROFESSIONAL CONDUCT . . . . . . . . . . . 278 OPINIONSASTOPROFESSIONALCONDUCT. . . . . . . . . . 282 FINANCIAL REPORTING RECOMMENDATIONSAND INTERPRETA'IKONS 300 PENSION PLAN RECOMMENDATIONS AND INTERPRETATIONS . . 350 APPLICATION FOR ADMISSION . . . . . . . . . . . . . 380 DUES . . . . . . . . . . . . . . . . . . . . . 381 O'I'HER ACTUARIAL ORGANIZATIONS . . . . . . . . . 382 ACTUARIAL CLUBS . . . . . . . . . . . . . . . . . 385 1 HISTORY OF THE AMERICAN ACADEMY OF ACTUARIES It was onOctober 25, 1965 that the American Academy of Actuarieswas organizedasanunincorporated associationtoservetheactuarialprofessionin theUnited States. Thecorresponding national body in Canada, theCanadian Institute ofActuaries, had been incorporated earlier inthesameyear. For many years the profession in North America had consisted of four bodies: theCasualty Actuarial Society, theConference ofActuaries inPublic Practice, the Fraternal Actuarial Association, and theSocietyofActuaries. In 1964, the members of those four bodies, recognizing the need for a single body to represenr actuaries of all specialties, approved formation of an all- inclusive organization of qualified United States actuaries. The original plan had been to obtain a federal charter as the first step toward seeking legal recognition of the profession. When it became appar- ent that this could not be promptly obtained, the Academy was dissolved as an unincorporated association and, on April 29, 1966, was reorganized as a corporationundertheIllinois GeneralNot ForProfit Corporation Act. Henry F. Rood, whose presidential address to the Society of Actuaries in 1958 had voiced the firstformal proposal for anational body, was elected itsfirstPres- ident. MEMBERSHIP REQUIREMENTS. Academy membership was intended to serve as thehallmark of a qualified actuary in the United States. All residents whowere Fellows (or the equivalent) of the four existing bodies on October 25, 1965, were automatically enrolled as Academy mem- bers, subject to their indicated assent by paying the dues. The number of chartermemberswas 1,427. The Academy immediately setabout making its existence known tocom- petent actuaries not eligible as charter members. It was required that any suchactuary demonstratetothe Admissions Committee adequateknowledge and skills. Many were admitted by this route, some after passing special proctored examinations. Arequirementofsevenyearsofresponsibleactuarial experience (five years for Fellows by examination of the existing bodies) was imposed. After January 1, 1970, educational requirements were gradually increased until the ultimate standard was reached in 1976. Non-residents oftheUnited Statescanbeadmitted tomembership ifthey meet the Academy's educational and experience standards, can demonstrate familiarity withUnited States actuarialpractices, and haveaneed toperform actuarialduties intheUnited States. 2 History of the American Academy of Actuaries 3 In January 1976, an important amendment to the Bylaws created a new non-voting class of membership designated Affiliate of the American Acad- emyof Actuaries. This class consisted of non-members of theAcademy who became Enrolled Actuaries under the Federal Employees Retirement Income Security Act of 1974 (ERISA), subject to acceptance of their applications by the Academy, Subsequently, in January 1979, the Bylaws were further amended to eliminate thedistinction between Affiliates and Members of the American Academy of Actuaries, thereby creating one class of membership designated Members of the American Academy of Actuaries. PROFESSIONAL CONDUCTAND PRACTICE. GuidestoProfessional Conduct werefirst issued in December 1965, and have since been amplified and sup- plementedbyOpinions.TheseGuides requirethehighstandardofethicsand responsible performance expected of professionals; the Opinions aim to assist the practicing actuary in dealing with particular situations that arise. The Board of Directors is assisted by separate committees in this field. One of these, the Committee onGuides to Professional Conduct keep the Guides and Opinions current and appropriate; the other, the Committee on Dis- cipline, considers questions that arise about the conduct of any individual member. LEGAL RECOGNITION. In December 1966, the National Association of Insurance Commissioners adopted aresolution supporting recognizedstand- ards of actuarial competence and conduct and urging each commissioner to support the efforts of the Academy to gain official recognition. Many states now have regulations that recognize Academy membership as qualification forsigning insurance company annual statements; some havecorresponding recognitionforpublicemployeeretirement systems. The firststate toactwas Indiana, which provided by a 1968 law for certification of actuaries by a state board. The general pattern followed in other states has been issuance ofadministrative ordersorregulations. In 1975 the responsibility expectedofactuaries was spelled out by a new requirement that theactuarywhosignsalifeinsurancecompanyannualstate- ment express an opinion on the actuarial elements including an opinion on theadequacy ofreserves. The Academy responded with recommendations to theprofession onhow thisresponsibility shouldbe met. In thepension field the 1974 legislation, ERISA, has established extensive and specific standards for actuarial reports, for disclosure and fiduciary re- lationships, and for thequalifications ofactuaries inpensionwork. E%PRBSSIONSOFPROFESSIONALOPINION.Thefirstmajorinfluenceofthe Academy beyond theboundaries of theprofession was inits response,begin- ning in 1972, to the drafts of guides for audits of stock life insurance corn- panies by the American Institute of Certified Public Accountants. This co- operative endeavor has led to regular and close association between the ac- tuarialandaccountingprofessions. TheAcademy is steadily promulgating Recommendations,and Interpreta- tions thereof, for use by actuaries inpreparingfinancial reports for insurance companies and pension plans. The Guides to Professional Conduct and re- 4 History of the American Acarlemy ofActuaries lated Opinions require that actuaries take these pronouncements into con- sideration and be prepared to support use of assumptions or methods that varyfromthem. JOINTACTIVITIES OFACTUARIAL BoDIEs. The North American actuarial bodiescooperatein manyways, largelythrough joint sponsorship ofactuarial examinations and through joint committees as needed. In December 1972 theAcademywasinstrumental inlaunchingan informal body,theCouncilof Presidents, to foster even greater understanding and common purpose. In 1976 theactuarial organizations jointly formed the Actuarial Education and Research Fund to foster the growth of basic actuarial research throughout the profession and to arrange for necessary financing of such research. ADMINISTRATION. From the outset the Academy shared administrative facilities with the Society of Actuaries in Chicago, which have since been broadenedtoserve theConference ofActuaries in Public Practice also.Ama- jor step toincrease the value and influence ofthe Academy was taken inJan- uary 1976whenStephenG. Kellisonwasappointed Executive Directorwith headquarters in Washington, D.C. Kellison, a member of the Academy,will coordinate Academy activities in the public sector. The Washington office staffwas further strengthenedbytheappointmentof afull-time communica- tionsspecialistinJanuary 1977. MEETtxGS. The Academy holds itsannual meeting inthe fall ofeachyear inconjunction with the annual meeting of one of the four founding organ- izations. Starting in 1976 the Academy and the Conference of Actuaries in Public Practice have jointly sponsored a series of special meetings for En- rolled Actuaries. These meetings have provided an organizational focus for theconcerns and interests of all Enrolled Actuaries. PL7sLycnTtoivs. The Academy continues to expand its scope of publica- tions. The Academy publishes annuaily a Year Book. During 1977 the frequency of publication of the Newsletter was increased to bimonthly. Also, the Enrolled Aclararier Report, a special section of the Newsletter, was turned into a separate publication. Finally, the Journal is published as a record ofeach annualmeeting since the 1975 annual meeting. DALER.CrUSTAFSON PresidentoftheAmericanAcademy ofActuarie.r BOARD OF DIRECTORS Tum OFFICERS: Expita DALER.GUSTAFSON,President 1979 RONALDL. BORNHUETTER,President-Elect 1979 PRESTONC.BASSETr, VicePresident 1979 CHARLES C. HEWITT,JR., VicePresident 1979 HERBERTL. DEPRENGER, VicePresident 1980 WALTERL.GRACIE, VicePresident 1980 DWIGHTK.BARTLETT,III,Secretary 1979 KEVINM.RYAN,Treasurer 1979 PAST-PRESIDENTS: ROBERTC.WINTERS 1979 EDwINF.Bonvrotv 1980 ELECTED: ROBERTA.BAILEY 1979 GEOFFREYCROFTS 1979 WILLIAMA. FERGUSON 1979 RICHARDS.ROBERTSON 1979 *^WAL-mS. RUGLAND 1979 RUTHE.SALZMANN 1979 ALANC.CURRY 1980 CHARLESE.HOLM 1980 GEORGE D.MORISON 1980 BARTLExL.MUNSON 1980 ALANRICHARDS 1980 GEORGEB.SwicK 1980 JAMESA.ATTWOOD 1981 DAVIDR.CARPENTER 1981 A.NORMANCROWDER,III 1981 DARRELLW.EHLERr 1981 JOHN A.FIBrGER 1981 MAt'ISA. WALTERS - 1981 ACADEMY HEADQUARTERS AND STAFF Correspondenceinvolvingadmissions,addresschanges, YearBooklistings, dues status, mailings and publications should be sent to the Administrative Office. Other correspondence should be sent to the office of the Executive Director. ExecutiveOffice AdministrativeOffice STEPHEN G.KELLISON,M.A.A.A. BERNARDA.BARTELS ExecutiveDirector AdministrativeOfficer FREDERICK D.HUNT,JR. MADELINEM.MADDEN DirectorofCommunications & AdministrativeAssistant GovernmentLiaison 208SouthLaSalleStreet CYIVTHIAA,SHARP Chicago,Illinois60604 ProjectsCoordinator 312/782-4204 1835KStreet,N.W. Washington, D.C. 20006 202/223-8196 5