Carlos Fuentes:
Mary Pat,
Thank you for reaching out to me. Please share my response with readers of GoActuary.
I’ll respond to your questions and then I’ll qualify my answers.
I do not support the current UEC program for the following reasons: it reduces the rigor of actuarial education; it gives an unfair advantage to some candidates; it gives the impression that minority students benefit disproportionally from this initiative. This impression has serious consequences in the professional lives of minority actuaries who, regardless of their level of achievement, will continue to be seen by a growing number of people as less qualified, recipients of undeserved favors, and undesirable. Even if the program eventually benefits a disproportionate number of minority students, the long-term cost to their professional careers would be much greater than the benefits.
I oppose the path to Associateship for international candidates practicing in the US under which, for many countries, it requires passing one exam and satisfy modest requirements. See details in International Section - International Actuarial General Information | SOA.
I agree with the changes in the education system that include micro credentials. Candidates will have the opportunity to obtain designations as they make progress with the exams, giving something to those who do not pursue an ASA and incentives to those who do. If employers see value in the micro-credentials, actuarial education system would become more relevant to the industries we serve.
To qualify my answer to the question about the UEC program I need to make two observations:
(i) The willingness of candidates to pursue actuarial credentials depends on three aspects: effort; expected rewards; comparison of the actuarial profession with other professions. Expected rewards have decreased over time as attested by unemployment and the abundance of actuaries, which ought to affect the level of pay via the supply-demand equilibrium in the labor market. On the other hand, whereas in the past actuaries had little competition from other professions, this is no longer the case
(ii) What is the ideal number of actuaries? A large pool of actuaries gives employers access to talent and reduces labor costs; it also increases the income of actuarial organizations but depresses the salaries of ASAs and FSAs. A small pool of talent produces the opposite effects and maybe additional consequences, which we must understand because some of them could be decisive. For example, if the profession becomes less visible, could it become less relevant? Could actuaries be replaced by other professionals—data analysts and accountants with training in the financial aspects of insurance? I am sure the Board has considered these questions and worked out scenarios such as the introduction of a single-payer health care system, which would transform the health care industry. The point is that we need to understand how the supply of talent affects society and credentialed actuaries.
If the number of actuaries is excessive then the UEC program is hurting the profession and the SOA should eliminate it. More broadly, the SOA should favor a stricter credentialing system. On the other hand, if society and actuaries can benefit from membership growth, then shortening the traveling time to associateship and fellowship is the path to follow, however unfair it might be to those who made great sacrifices in an attempt to pass the exams when the education system was stricter. But even if we concede that the profession must grow—an assumption that requires justification—the UEC program should be redesigned so that all candidates are treated fairly and are seen as equally capable.
Best,
Carlos