Actuarial Notes

American Academy of Actuaries

Study guide: Exam 6U

The American Academy of Actuaries (the Academy, AAA) is the U.S. professional association for actuaries of every practice area. It speaks for the profession on public policy and sets its U.S. conduct, qualification and practice standards — the Code of Professional Conduct, the U.S. Qualification Standards (USQS) and, through the Actuarial Standards Board it houses, the Actuarial Standards of Practice — which is why the NAIC writes its standards into the definition of who may sign a U.S. P&C Statement of Actuarial Opinion (see Appointed Actuary Responsibilities).

\begin{aligned} \text{Conduct} &\rightarrow \text{Code of Professional Conduct} \\ \text{Qualification} &\rightarrow \text{USQS} \\ \text{Practice} &\rightarrow \text{ASOPs, set by the ASB} \\ \text{Discipline} &\rightarrow \text{ABCD} \end{aligned}

  • What it is — and is not. Established in 1965, with about 20,000 members, it serves the public and the U.S. profession. It sets no exams — the FCAS, ACAS and FSA come from the CAS and SOA; its own credential is MAAA — and the other half of its work is nonpartisan actuarial input to Congress, the NAIC and regulators.
  • The four pillars:
    • The Code of Professional Conduct, shared by the U.S.-based actuarial organizations. Precept 2 (act only when qualified) and Precept 3 (comply with applicable standards of practice) make the next two pillars binding.
    • The USQS (current edition effective January 1, 2022). The general standard requires at least 30 hours of continuing education a year, including at least 3 on professionalism, at least 1 on bias topics and at least 6 in organized activities, with no more than 3 counted from general business skills. The Specific Qualification Standard for NAIC P&C opinions adds basic education in coverages, ratemaking, statutory accounting, reserves and reinsurance; three years of responsible experience reviewed by an actuary qualified to sign; and 15 hours a year of directly relevant CE, at least 6 with outside actuaries or professionals.
    • The Actuarial Standards Board (ASB) — housed within the Academy's structure but independent in writing standards. The opinion rests on ASOP No. 36 (opinions on P&C reserves; revised effective October 1, 2024), ASOP No. 43, ASOP No. 23 and ASOP No. 41 (actuarial communications).
    • The Actuarial Board for Counseling and Discipline (ABCD) gives guidance, investigates complaints and counsels actuaries. It does not discipline anyone: it recommends discipline to the membership organizations, which decide under their own procedures.
  • Where it enters the opinion. A U.S. Qualified Actuary must meet the USQS specific standard, hold an Accepted Actuarial Designation, and belong to an organization that requires the Academy's Code and the USQS and participates in the ABCD. Academy membership itself is not required — CAS membership satisfies the third test — but the Academy's standards are in the definition either way. Its Casualty Practice Council can also evaluate an actuary without an accepted designation and find them qualified for particular lines of business.
  • Guidance, not standards. The Academy's Committee on Property and Liability Financial Reporting (COPLFR) publishes an annual practice note on P&C loss reserve opinions, with illustrative wording (see SAO Language). A practice note is nonbinding: departing from its wording is not a violation; departing from ASOP No. 36 may be.
  • Canadian counterpart: the Canadian Institute of Actuaries (CIA), whose Standards of Practice and Rules of Professional Conduct govern the Canadian Appointed Actuary.

Is the Opining Actuary's CE Sufficient? An FCAS will sign a P&C Statement of Actuarial Opinion in February 2026. Her 2025 continuing education log:

  • CAS reserving seminar, in person: 9 hours
  • NAIC statutory accounting webinar: 3 hours
  • Reading ASOP No. 36 and the COPLFR practice note: 4 hours
  • In-house reserving meetings, no outside speakers: 6 hours
  • Professionalism webinar: 2 hours
  • Leadership course (general business skills): 5 hours

Test her against the USQS general and P&C-specific CE requirements.

Answer Specific standard — hours directly relevant to the opinion, and those with outside interaction:

\begin{align*}
\text{Relevant} &= 9 + 3 + 4 + 6 \\
&= 22 \geq 15 \\
\text{Organized} &= 9 + 3 \\
&= 12 \geq 6
\end{align*}

Met comfortably.

General standard. Only 3 of the 5 business-skills hours count:

\begin{align*}
\text{Countable} &= 9 + 3 + 4 + 6 + 2 + 3 \\
&= 27 < 30
\end{align*}

Organized hours (9 + 3 + 2 = 14) clear the floor of 6, but professionalism is 2 < 3 and bias topics are 0 < 1.

She is 3 hours short, of which at least 1 must be professionalism and 1 bias. The USQS let her make up a shortfall early in 2026 before she signs — but those hours then cannot count toward her 2026 requirement. Until she does, Precept 2 bars her from issuing the opinion, however ample her reserving hours.

Which Rules Bind the Opining Actuary? An Appointed Actuary drafting a year-end opinion consults (a) the NAIC Annual Statement Instructions for the opinion, (b) ASOP No. 36, (c) the COPLFR practice note and (d) the USQS. For each, is it binding, and who enforces it?

Answer

  • (a) Binding as regulation. States require the annual statement to follow the instructions, and the domiciliary commissioner enforces them. They also settle conflicts: insurance laws and regulations "shall at all times take precedence over the actuarial standards."
  • (b) Binding professionally, through Precept 3. A breach is a matter for the ABCD, which may recommend discipline to her membership organizations.
  • (c) Not binding. Different wording is fine if the NAIC's required elements and ASOP No. 36's disclosures are present.
  • (d) Binding twice over — professionally through Precept 2, and as regulation because the NAIC's Qualified Actuary definition incorporates the USQS.

Where (a) and (b) conflict, she follows the law and discloses the departure from the standard, as the ASOPs themselves provide.