Personally, I think it is a very bad idea, and I sent the following to the feedback address at fem@actuarialdirectory.org. The deadline for responses is tomorrow, so if you have not already commented, you have one more day.
I believe that the proposed future education method (FEM) of exempting actuaries from examinations based on passing specific university courses is a bad idea, and I am strongly opposed to it.
Currently, one of the strongest elements of our profession is its being close to a true meritocracy; much more so than any given university. A candidate takes an examination simultaneously with his or her peers, has his or her exam anonymized, and then graded by anonymous referees (anonymous to the candidates) similar to a double-blind test, and has his or her results, still anonymous, compared with the results of all other test-takers. Then an pass score is set (we will leave the discussion of the score being set based on the actual distribution of results to another time) and all who have met or exceeded the score will be deemed to have net the requirements. There is very little opportunity for either "gaming the system" or for allowing any other external influence (pernicious, malicious, or otherwise) to effect the outcomes. Contrast the above with a university setting. Notwithstanding the various societies' intentions of ensuring "specific standard", it is undeniable that different teachers, and different universities for that matter, will have different standards. Furthermore, this opens the hideous potential for student-teacher relationships impacting the results, be they for good or ill. We lose the anonymity, we lose the simultaneity, we lose the ability to compare oneself to one's peers, we lose the "double-blind" nature of the exam process.
Another distinct shortcoming of the new process is the complete loss of standardization. Currently, all who pass Exam "X" in a given sitting do so with the exact same exam. Symmetrically, all those who fail Exam "X" in a given sitting, fail the same exam that those who pass have passed. When a change is made to the syllabus, and thus the exams, it will affect all sitting candidates in the same way. There is no preferential treatment possible. Under the new system, there can be many different "exams;" as many as there are approved courses. The syllabus, and any changes thereto, will not affect all candidates equally, but is completely dependant on the institution, and for that matter the teacher. This also includes the potential dilution of candidates, in that their passing is no longer controlled by the respective societies, but by external institutions.
A third distinct shortcoming of this new process, while less egregious, is the loss of its screening abilities. As a former employer of mine, a credentialed actuary, once told me in half-jest, "you do not pass actuarial exams, you win them." One of the benefits of the exam process, and I say this in hindsight having completed it, is its ability to isolate people who can deliver good answers under pressure. I cannot speak for anyone else, but to me, this is pretty much the epitome of what we as actuaries are called upon to do. We are not supposed to always have the best answer, but we are supposed to be able to help our clients (be they actual clients, employers, etc.) to address their concerns as best we can in the ever-shortening time-frames we are given. Furthermore, in actual work, we are not always given all the information "handed" to us on a platter. We need to be able to quickly identify good and useful data from bad, and use it as best we can. Exam work is very similar to this. We have to learn the material on our own—exam seminars are good refreshers, but I have never met an actuary who has only used them without other studying who has had any success—which includes triaging the material, identifying the areas on which to focus (the Brosious quartering comes to mind), and quickly "ingesting" what is needed to achieve success. In a university setting, much of this is lost. For all we know, the final can be a one week, open book, take home affair—unthinkable under the current method.
Regarding the purported benefits of such a system, I must respectfully disagree with some.
I do not see the quality of actuarial education improving any more because of institutionalized exam exceptions than it would should the current syllabus and exams be appropriately updated. Some of our syllabus papers, at least when I was a candidate, were written not for candidates but for actuaries, and experienced ones at those. What we need is a centralized effort at generating better exam material, not diffusing that effort throughout 20 or so universities, each with their own agenda and intentions.
The following, I feel, highlights a critical chasm between academic actuaries and practicing actuaries. I would like to know why "university" training in actuarial methods is considered a benefit? Many would argue that in truth it is a detriment. Universities are often known for their being "out-of-touch" with what is occurring in the "trenches" as it were. The ivory towers of academia are bastions of theory, but oft-times are highly impractical. As actuaries, most of us will practice, and not remain theoreticians, and as such, I would counter that one of the most important elements in becoming and being an actuary is the "apprenticeship" one undergoes in one's early actuarial career. Knowledge should never be confused with, or substituted for, experience, and it is experience that is key in our discipline, which at times is as much an art as it is a science (at least in my field of casualty reinsurance).
I can understand how allowing university classes to exempt students from actuarial exams would increase the career's attractiveness. However, that can be addressed by having the university courses geared towards the specific exams and preparing their students for taking said exam.
In closing, I feel that the FEM described would do far more harm than good to our profession, and I urge the societies to reject it in favor of enhancing our current process.
Thank you.
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