EVENT: March 2012 Workshops

EVENT:  March 2012 Workshops
Slides for several presentations are posted under the corresponding session descriptions.
DATE: Tuesday March 13, 2012
12:50  Registration begins, 1:45  Workshop sessions begin, 5:15  Bar opens (cocktails, beer, wine, soda pop), 5:45  Dinner

PLACE:  Blue Cross and Blue Shield of Illinois
300 East Randolph Street
Chicago, Illinois
(Reception and dinner at the Fairmont Hotel, 200 N. Columbus Drive – ½ block away)

COST:  $115 with dinner, $95 without dinner
(Reduced rate for retirees, unemployed, full time students: $70 with dinner, $50 without dinner)

Workshops cover a variety of hot topics in each of the time slots.  Make your reservation online by Monday, March 5, 2012.  If you have questions, please call Pat Pruitt at 312-751-3392 or Bob Aronsohn at 312-653-5677.  This information, more speaker biographies, and subsequent updates are posted on this website.
Use this opportunity to fulfill some of your continuing professional development requirements.  You can earn more than 3 hours toward your annual AAA and SoA CPD requirements while you meet and network with other local actuaries face-to-face.

We welcome and encourage non-actuaries to attend our workshops because information covered is relevant to a wide range of work within the insurance and consulting industries.  Please share this announcement with others who may be interested. 

Suggested educational tracks are listed (in parentheses) beside each title:  Enterprise Risk Management (ERM), General, Financial Reporting, Health, Investment, and Life.

If any session is canceled due to low attendance, we will contact you.
1:45 p.m.  Workshop Sessions A

A1:  The Decision Making Process: FSA vs. MBA (ERM)
Tim Cardinal, FSA, MAAA, CERA, MBA, Vice President, PolySystems, Inc.
In addition to being competent, actuaries aspiring to ascend the career ladder and become decision makers – from Department heads to the C-Suite – must possess adept business skills. Actuaries need to and can do much more than acquire and deliver numbers (reserves, earnings patterns, and risk metrics/profiles) such as interpret the pertinent business context and implement solutions. The NAIC’s Solvency Modernization Initiative and EU’s Solvency II require embedding Enterprise Risk Management (ERM) into culture, decision making and business activities. Thus, ERM is inexorably tied to Strategic Organizational Behavior and Strategic Planning – domains associated with MBAs. This session will survey the MBA topic of strategic organizational behavior – culture, leadership communication, power and conflict, and decision making – from an ERM perspective.

The SOA’s ERM Curriculum and Exam Committee, starting with the question, “What should a CRO or CFO know?”, is considering including MBA topics of strategic managerial accounting, organizational behavior, strategic planning, behavioral finance and relevant business cases in the 2012 CERA Pathway Changes & New ERM Options for FSA Syllabus.

A2:  ORSA and Solvency II – What’s in it for me (Fin Rept)
Joe Rafson, FSA, MAAA – KPMG LLP, Chicago
Ashwini Vaidya, FSA, MAAA- KPMG LLP, Chicago
Nicole Kim, FSA, MAAA – KPMG LLP, Chicago
The “Own Risk and Solvency Assessment” (ORSA) concept is now embedded in both IAIS standards and in Solvency II within Europe and is expanding in other jurisdictions.  Why should U.S. actuaries pay attention now?  Consider this – 
?Risk Management best practice is to develop a deep understanding of the risks you are taking and their impacts on your business.
?The National Association of Insurance Commissioners’ (NAIC's) Solvency Modernization Initiative is considering an ORSA
?There has been an increased focus on risk management by rating agencies and regulators
At the conclusion of the session, attendees will be able to compare and contrast the key initiatives on solvency regulation and their inherent effects on companies as they develop their own risk solvency assessments in compliance.

A3:  Medicare Supplement: Current Issues and Future Challenges and Opportunities (Health)
Ken Clark, FSA, MAAA, Principal and Consulting Actuary, Milliman Inc. 
Where is the market today and what real or potential regulatory issues are festering under the surface that will affect the future of Medicare Supplement?  What are the continuous and future challenges and opportunities for the product line? 

A4:  Mortality at Advanced Ages (Life)
Leonid Gavrilov, Ph.D., Center on Aging, NORC and the University of Chicago
Natalia Gavrilova, Ph.D., Center on Aging, NORC and the University of Chicago
This session outlines methodological problems related to mortality measurement after age 100 and describes methods of mortality estimates at advanced ages. This session presents further developments of work “Mortality measurement at advanced ages: A study of the Social Security Administration Death Master File” published recently by the North American Actuarial Journal. Mortality modeling, approaches to hazard rate estimation and data quality control are also discussed.  Read more at: http://tinyurl.com/No-Mortality-Deceleration or
the full text at

A5:  Low Interest Environment and Year End Projections (Fin Rept)
Bob Guth, FSA, CERA, Ph.D., MAAA, Everence Association Inc
Jim Thompson, FSA, MAAA, Actuary & Consultant, Central Actuarial Associates
Session will discuss the history of interest rates from the 1930s to the present and implications of current low rates for scenarios in asset adequacy analysis. We will show the use of public website data to understand state regulations and to derive scenarios and mean reversion. Reflections from 2011 cash flow testing and methods for spreads to treasury and defaults will be discussed as these pertain to the appointed actuary. 

A6:  Hazards to Your Retirement (Investment)
Dan Winslow, FSA, CPA, Winslow Financial, LLC
Cheryl Krueger, CFP, FSA, Growing Fortunes Financial Partners, LLC
Kirk Kreikemeier, CFP, CFA, FSA, Principal, Pebble Valley Wealth Management
How are low investment returns, troubled government programs, and longer lives changing your retirement?  How much can I withdraw from my savings each year?  What are the risks?  What are the alternatives?  What resources are available from the Society of Actuaries? 

3:00 p.m.  Workshop Sessions B

B1:  Public Pension Underfunding (Pension)
Mitchell Serota, FSA, FCA, EA, Ph.D., MAAA, Mitchell I Serota & Associates   
Jason Franken, FSA, EA, MAAA, Foster & Foster Inc 
Public Pension Underfunding in Illinois:  We will discuss the over 660+ police and fire plans and why they are underfunded.  The presentation will give the attendee an insight into the actuarial methods of the Illinois Pension Code and the current level of municipal contributions.
What the Academy is trying to do about Public Pension underfunding nationwide:  The discussion will center on the AAA Pension Committee and the Pension Section of the Actuarial Standards Board.  The Pension Committee discusses topics in a global sense, trying to gather a consensus and present our findings to Congress and anyone who will listen.  The Pension Section sets Standards and has just issued two new ones that apply directly to public pension plans.
B1 will be eligible for non-Core Continuing Education credit for the Enrolled Actuary credential.  To get credit, you must arrive on time, and sign a sign-up sheet that will be in the room.  You must remain for the entire session, since credit cannot be claimed for less than an hour.  Certificates of attendance will be generated from the sign-up sheet, and sent to you after the Workshops.  They will be accompanied by the required Outline, that you must keep through 2017.   CLICK HERE FOR THE SLIDES

B2:  Life Insurance Company Tax Update (Fin Rept)
Bud Friedstat, FSA, MAAA
Art Panighetti, FSA, MAAA, Northwestern Mutual
This session will focus primarily on life insurance company tax reserve issues but may also briefly discuss certain recent developments in the life insurance company product tax area.  Tax reserve issues to be discussed will include developments for in-force variable annuities with guaranteed living benefits (VAGLB's), Actuarial Guideline 43 post implementation issues and recent developments, other recent developments in the tax reserve area including recent rulings and cases (including American Financial and CIGNA) and current IRS audit issues related to life and annuity reserves.  The session will also discuss new developments in the life tax reserve area related to principle based life reserves, activities of the AAA Tax Work Group and any actual or expected new pronouncements by the IRS or Treasury.

B3:  MLR Regulation and Issues (Health)
Jim O'Connor, FSA, MAAA, Principal & Consulting Actuary, Milliman Inc. 
Insurers for the first time need to calculate medical loss ratios (MLRs) per the ACA regulations to determine whether or not they need to rebate premium to their insureds.  This session looks at the requirements of the MLR regulation and various issues related to the calculations.

B4:  Pricing Synergy – ILTCI/SOA Combination Product Research  (Life/Health/ERM)
Carl Friedrich, FSA, MAAA, Consulting Actuary, Milliman Inc.
Linda Chow FSA, MAAA, Consulting Actuary, Milliman Inc.
A research study on the quantification of the natural hedge characteristics of hybrid products that combine life insurance or annuities with long-term care insurance (ILTCI) is about to be completed.  The research is co-sponsored by the Society of Actuaries ("SOA") and the ILTCI Conference Association.  This session will review the results of this research including a summary of key risk elements for the stand-alone LTC product and both life and annuity combination products, the quantification of profitability for each product, and the changes to profit results under a range of sensitivity tests conducted on key risk elements.

B5:  Mortality Improvement / SPIA update (Life)
Mary Bahna-Nolan, FSA, MAAA, CERA, Director, PricewaterhouseCoopers LLP

B6:  Power Reading Mini-Lesson (General)
Allan Goldin
Power Reading will show your how to read 2, 3, 4 times faster with improved comprehension, better recall, and razor sharp concentration. Come to the lesson and learn how you can cut your reading time in half. Get better results on your Actuarial Test.  Guaranteed.

4:15 p.m.  Workshop Sessions C

C1:  Decision making process informed by various, and possibly conflicting metrics (ERM)
David Schraub, FSA, CERA, MAAA.  Actuaire Qualifie, Institut des Actuaires
Integrating varied and possibly conflicting metrics into the decision making process is a challenge. After quickly discussing some current and upcoming metrics in the life insurance space, this session will present some examples on how business decision can be informed by these metrics. The conclusion will highlight some underlying principles on how decision could be made based on the information provided by these different metrics.
C2:  Progress toward the new GAAP – IFRS (Fin Rept)
Douglas S. Van Dam, FSA, MAAA, Manager, Actuarial Services, PolySystems, Inc
In the second quarter of 2012 the FASB plans to release its exposure draft for the insurance accounting standard.  The IASB will release its revision to the 2010 exposure draft in a similar timeframe.  This presentation will highlight what is expected to be in the exposure draft and compare that to current GAAP and to the 2010 exposure draft.  We will discuss the impact on the insurance industry and how we should we be preparing.  There will be time for Q&A.

C3:  Actuarial Value & ACA (Health)
Janice Knight, FSA, MAAA, Chief Pricing Actuary, Health Care Service Corporation
Are you curious about what health care benefits will look like in 2014?  Starting then, health benefit plan designs must cover essential benefits and conform to one of 4 (or 5) metallic levels.  Both are dependent on actuarial values. In this session, we will discuss what is known about this calculation.

C4:  Potential New Medical Markers in Underwriting (Life)
Al Klein, FSA, MAAA, Milliman Inc.
Tom Edwalds, FSA, ACAS, MAAA, Assistant Vice President of Biometric Research, Munich Re
A research study on potential new medical markers for life insurance underwriting was recently completed.  The research was funded by the SOA, the AHOU (Association of Home Office Underwriters) and the CIU (Canadian Institute of Underwriters).  This session will explain how the research was conducted, the results of the analysis of these new markers and how you can use the tool that was developed for this research in your own work.  The session will also provide a look to the future on other potential new ways to underwrite the life insurance risk.

C5:  The Effects of the Low Interest Environment On Valuation, Products And Product Management (Life)
Terry Long, FSA, MAAA, Senior Vice President, Lewis & Ellis
Don Walker, ASA, MAAA, Director, Life Actuarial Department, Farm Bureau Life of Michigan
The panel will  discuss the prognosis of the valuation interest rate and hence the nonforfeiture rate, the implications of nonforfeiture interest below 4% for various life and annuity products, what to do about the NAIC no longer subscribing to the Moody’s index, strategies for managing in force blocks (incentives to decrease flex renewal premium, selling blocks, using guarantees, asset strategies) and the implications of AM Best’s webinar on the 2 year horizon for low interest.

C6:  Retirement Plan Investing – the New Reality in 2012  (Investment)
Merrill F. Rajeck CFA, Owner/Manager, Jay Company – Investment Management
Making the assumed rate of return on present and future assets is a key variable in pension funding.  Is a 7½% assumed rate of return realistic in an era of zero rate Federal Reserve monetary policy?
     C6 will be eligible for non-Core Continuing Education credit for the Enrolled Actuary credential.  To get credit, you must arrive on time, and sign a sign-up sheet that will be in the room.  You must remain for the entire session, since credit cannot be claimed for less than an hour.  Certificates of attendance will be generated from the sign-up sheet, and sent to you after the Workshops.  They will be accompanied by the required Outline, that you must keep through 2017CLICK HERE FOR THE SLIDES

C7:  Diversity Breakthrough: Achieving an Enlightened Workforce (General)
Margaret Milkint, Managing Partner, The Jacobson Group
Women hold an average of only 18 percent of the highest leadership positions. For the insurance industry alone, that number is even lower. Females represent an increasingly large portion of the consumer market. Forward-thinking companies must harness the power of women at the executive table.
While the glass ceiling may be broken, equality has yet to be achieved. This presentation explores the lack of gender diversity in insurance leadership and poses solutions that every executive, manager and supervisor need to know. What can current industry female leaders and enlightened males, those who understand the importance of diversity and equality in leadership, do to promote equal footing?
Objectives include:
?Examine the current talent and diversity situation.
?Understand the underlying problems and old habits that must be reformed to practice a modern workforce development program.
?Discuss the role the enlightened male plays in promoting workplace diversity and sponsoring women on the leadership track.

5:15 Reception (cocktails, wine, beer, soda pop) 
Fairmont Hotel, 200 N. Columbus Drive (across the street from BCBSIL) International Ballroom Foyer
All workshop attendees are invited to attend this reception for drinks and socializing.
Attendees will be issued two drink tickets apiece.  The bar remains open during dinner.   

5:45 Dinner & Speaker Approximate start time.  (Fairmont Hotel International Ballroom) 
Emerging Technologies and the Risks They Pose (ERM)
Kelly McMillan, Assistant Vice President, Federal Reserve Bank of Chicago
Emerging technologies are rapidly introducing exciting new ways of doing business through mobile banking, social media, virtualization of IT environments, and outsourcing via cloud computing. Organizations will feel pressured to adopt these new technologies, but they will need to understand the new risks that are potentially introduced to the IT environment. These new and significant risks may be mitigated by adopting proper due diligence, adapting existing risk management practices, and implementing strong overall governance.

Rows of chairs are available for those who want to watch this presentation without dinner.

Dinner is optional.  The event fee is $115 with dinner, $95 without dinner,
Retirees, unemployed, and fulltime students get a reduced rate of $70 w/dinner, $50 without dinner). 
Make your dinner selection when you register online.  After you register, you will receive a payment link via E-mail.

SALAD:  Mixed Greens, Arugula, Poached Pear, Feta Cheese, Giabatta Crouton Garnish, Roquefort Vinaigrette

ENTRÉE (two choices, chicken or vegetarian):
(chicken) Seared Chicken Breast, Lemon, Garlic and Rosemary Orzo, Asparagus, Tomato Vinaigrette
(vegetarian) Risotto Cake with Asparagus and Truffle Yaki Sauce

DESSERT:  Milk Chocolate-Caramel-Banana Tart, Chocolate Garnish, Caramel Sauce, Berries

Coffee & Tea

The bar remains open during dinner.

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