USQS Roundtable—All About the Amended Standards

Contingencies sat down with Tom Campbell, Lisa Slotznick, and Joeff Williams—three members of the Committee on Qualifications (COQ), the Academy body that drafted the amended USQS—to discuss this historic undertaking.

Note: The following reflects the opinions of the individuals herein. This piece does not necessarily reflect the position of the Academy, the Committee on Qualifications, or any other body of the Academy, and it is not to be relied upon for any purpose.

The Academy, which sets standards for qualification, practice, and conduct for actuaries practicing in the United States, has revised the standards defining the qualifications for actuaries who issue statements of actuarial opinion (SAOs) in the United States. The revised Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States (USQS) replaced the existing qualification standards on Jan. 1, 2022.

Q1. Thank you all for getting together to discuss this fundamental document of the U.S. actuarial profession. First question: Why now? What makes this the right time to review and recast these standards—the first time since 2008?

Tom Campbell: What started this was a fairly significant event—the National Association of Insurance Commissioners revised the requirements for actuaries signing SAOs for property and casualty Annual Statements. A key part of those changes was the addition of the Society of Actuaries (SOA) specialty track in general insurance as one path for meeting those requirements. Once that occurred, the Academy Board of Directors asked the COQ to consider modifications to the USQS to reflect these new regulatory requirements. But in addition, the Board asked the COQ to consider whether there were any other changes that needed to be recommended to reflect any other issues that have presented itself since the last time the USQS were revised—in 2008.

Lisa Slotznick: As Tom said, the initial impetus for opening the USQS for review was the SOA’s implementation of a General Insurance Track (i.e., a casualty track) that the NAIC in turn considered in determining its regulations related to the qualifications needed to sign SAOs for P/C Annual Statements. Once we opened up the USQS for this topic, we and our commenters revisited the entire USQS.

Joeff Williams: That’s right—as we began to review the current USQS it was apparent there were many other areas where updating them would be beneficial.

Q2. What are the big changes actuaries need to be aware of?

LS: The major changes are highlighted in the transmittal memo that accompanied the USQS: basic education is now based primarily on credential rather than membership in an organization; subject area knowledge is related not just to practice area but also to a particular subject within a practice area; refining the definition of “basic education” for enrolled actuaries when doing all types of pension work; a new requirement for bias topics continuing education (CE); and last, but not least (as it started this entire process), recognizing the SOA as an administrator of casualty examinations.

TC: We noticed the standards that were in place—particularly the basic education requirements—seemed to have a focus on membership in different actuarial organizations. This included both the U.S.-based organizations and international organizations. During our discussions, we concluded that the focus should really be on the actual basic education the actuary receives. This led us to recommend that the standards link the requirement to the credentials that the actuary have obtained, rather than to the actuary’s membership in a given organization. In doing this, we also incorporated the Academy’s role in determining whether the basic education obtained by non-U.S. actuaries who are members of an international actuarial organizations is consistent with the education that is part of earning the credentials of US-based organizations. This is something the Academy already does as part of our membership requirements, and it’s why membership in the Academy is one of the ways an actuary can meet the basic education requirement. It’s important to note that the direction we took in recommending this change in focus was influenced by and refined through the comments we received during the first exposure period.

Q3. Focusing on one new requirement for a moment—“bias topics” seems pretty broad.

JW: The COQ received many comments on this subject with a variety of viewpoints—everything from “Why is it necessary at all?” to extensive requirements for bias and diversity and inclusion training. The COQ did not feel it should limit what that “bias” CE should encompass, because any bias education could ultimately benefit the work an actuary does and how it impacts the public.

TC: The work of the actuary is evolving more and more toward big data and artificial intelligence. In addition, we are seeing evolving regulatory and societal requirements that will place new demands on the actuary’s work. These new areas involve working with more unknowns in the tools actuaries use—such as data, models, algorithms, and assumptions. In order to be effective in these new areas, and to continue to earn the public’s trust in our work, we need to better understand what can impact the appropriateness and effectiveness of these tools. As these areas evolve, it is important for actuaries to understand the potential limits of these tools. This is where obtaining continuing education on bias topics can help. As the USQS lay out, bias topics may include “content that provides knowledge and perspective that assist in identifying and assessing biases that may exist in data, assumptions, algorithms, and models that impact Actuarial Services. Biases may include but are not limited to statistical, cognitive, and social biases.” This is a broad topic, but I believe it will better equip the actuary in our role of maintaining the public’s trust in insurance and pension systems.

LS: Indeed, bias topics are broad. When performing actuarial services there are so many ways that bias impacts our work that we need to keep the topic broad in order that the range of continuing education will give us the appropriate tools. The obvious ways that bias may impact our work are in selection of data, as well as designing, developing, selecting, modifying, or using all types of models and algorithms. Even more important is how we communicate the results of our work. We also operate in a world where we can individually be blindsided by biases that we bring to our work and impact the transparency and validity of the actuarial services that we are providing. Because of our basic education, we know what bias is. That is something that we can continue to fine-tune and will have significant benefits to the reputation of actuaries and allow us to further differentiate our professionalism compared with others, particularly many data scientists.

Q4. Tom, you mentioned that the focus on the actual basic education an actuary receives, as opposed to membership in a particular actuarial organization, came to the fore as a result of the comments received during an exposure period of the USQS. The COQ issued two exposure drafts and considered 188 comment letters from interested parties before reaching consensus with this final version, effective Jan. 1, 2022. Why was it important to solicit feedback and engage the profession in this process?

TC: The fact that we received that many comment letters was amazing, especially considering that many of the letters had multiple comments. It really shows that the profession cares about these standards.

I look at the USQS as representing the consensus of the profession. Yes, it is the COQ that develops and maintains the standards—and the Academy that promulgates them—but there always need to be opportunities for input from everyone. Therefore, it was important the we solicited comments through the two exposure periods. It was also important for the COQ to review and consider each and every comment. And we got what we asked for! This may have added time to the development of these revisions, but I believe it was worth it—I think the revisions are better as a result.

LS: The USQS is part of the U.S. actuarial professionalism framework that the members of the five U.S.-based organizations are required to adhere to. As a result, the feedback and input of many of us—those who will need to comply—is important. The COQ is a small group representing various practice areas and types of employment, but the commentary provided by so many others has improved the final work product and indicated that this is a document of the profession, not just the Committee.

JW: Lisa alluded to this: The USQS is central to the work an actuary does in the U.S. Accordingly, the COQ recognized the need to get feedback from the profession on this keystone document that impacts the U.S. practicing actuary in their daily work. The COQ read and discussed every comment that was submitted—we understood that the USQS is one of the most recognized pieces of professionalism material within the whole U.S. actuarial profession.

Q5. Can you talk a bit about the practice of self-regulation that the profession engages in—how do the USQS fit into that?

TC: The US actuarial profession is somewhat unique from many other professions. We are not licensed by the government; we are a self-regulating profession. This is part of our history, and this is something I think we need to continue, so that our profession remains strong and relevant. It is our professionalism standards that allow us to continue to be self-regulated.

The tools that the profession has developed that allows each actuary to act responsibly and professionally includes the Code of Professional Conduct, the actuarial standards of practice, the counseling and discipline process, and the USQS.

LS: The U.S. actuarial profession self-regulates by having a USQS that the profession prepares, not that a regulatory body prepares. By having so many actuaries engaging in commenting shows that we are an engaged profession that takes its self-regulation very seriously.

JW: And we do take it seriously. There is a tremendous responsibility on the profession to continue to monitor how we do our daily work and to show the public that our work is trustworthy.

TC: It is the role of the Academy to provide for the establishment, maintenance, and enforcement of these qualification, practice, and professionalism standards for actuaries credentialed by one or more of the five U.S.-based actuarial organizations in the United States. The COQ’s work on the USQS is part of this role.

There is an excellent discussion paper on self-regulation that the Academy published in 2020,[1] and we had a webinar on this topic a few months back.[2] I think this is an incredibly important topic that the U.S. actuarial profession should be aware of and continue to discuss.

Q6. Let’s go back in time—to 1965. The Academy was founded to be separate from the educational societies—indeed, to be the home of actuarial professionalism. Why does that structure continue to make sense today?

LS: Professionalism is a language that unites actuaries. Each of us has received a rigorous basic education that may differ in specifics based upon the series of exams that we have taken. But taken as a whole, we are united by the professionalism—the Code of Professional Conduct, the USQS, the actuarial standards of practice, and the Actuarial Board for Counseling and Discipline. We are all expected to have the same high standards for our work products, whatever that work product is.

TC: If you think about it, actuarial work has significant societal consequences. Every individual in the United States are affected by the work of actuaries—from before birth until after death. What we do is important; but not only that, what we do also involves judgment. It is the combination of these things that requires actuaries to earn and maintain the public trust, and that ultimately led to the formation of the Academy.

The Academy was founded in 1965. At that time, the U.S. profession was technically strong, but it lacked public recognition as a profession, and it hadn’t yet had the opportunity to build public trust. This was an issue because of the increased attention being paid to pension and insurance programs, and the increasing role actuaries were playing in managing those programs.

It was in this environment that the leaders of the actuarial community in the U.S. decided to take steps to strengthen our status and recognition as a true “profession.” The actuarial organizations in place at the time decided the best way to move forward was to form a new and independent organization—the American Academy of Actuaries—to establish and support a self-regulating U.S. actuarial profession that serves the public as well as the profession in the U.S..

JW: That’s a great point, Tom. I think the key is recognizing the importance of self-regulation. I would also add that the Academy’s focus since 1965 has been to serve the public and the U.S. actuarial profession. This is necessary in order to maintain the high standards and allow the Academy to be focused on the needs and issues facing the practicing actuary in the U.S.

TC: The first Academy Yearbook, published in 1967, states, “It is essential that all persons who hold themselves out to be actuaries are qualified to perform their duties in a fully competent manner and in the public interest.”

As a result, and over many years of dedicated efforts to establish and enforce standards of conduct, practice, and qualification, what we all now know to be our profession has earned the public’s trust—and today we continue to earn that trust in our individual and collective service.

This history reveals the intent in 1965 was for the Academy to be the national association that establishes standards for practice in the U.S., and the association that speaks on behalf of the U.S. actuarial profession on public policy issues. And this is what the Academy does today. 


[1] Self-Regulation and the Actuarial Profession; American Academy of Actuaries; June 2020.

[2] “Self-Regulation and the Actuarial Profession”; American Academy of Actuaries webinar; Nov. 11, 2021.

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