IMPORTANT NOTE

New update for May 22, 2020 (see bottom of this article)

New update for May 05, 2020 (see bottom of this article)

The CAS has deleted the CIA.DCAT reading from the syllabus. You can still click on the link to view the archived version.

But there are issues with this deletion because it has historically been an important topic and it still relates closely to other readings still on the syllabus. I wrote to the CAS on April 17, 2020 for clarification (see below). I will let everyone know if I get a response.

In the meantime, make sure to study CIA.CSOP, and in particular the section within that wiki article called More on SOP 2500: DCAT. The CSOP article contains some of the same important information that was in the original DCAT article, although in much less detail. You definitely should know the following:

• new definition of satisfactory financial condition
• new definitions of the different kinds of scenarios

The old DCAT reading was supposed to be replaced with an updated reading on Financial Condition Testing but this has apparently been postponed to 2021.Spring.

My original question to the Exam-6C committee on Apr 17, 2020

To the Exam-6C committee:

I see the Exam 6-Canada for Fall 2020 has been revised and that the only change is the deletion of the following reading:

• Canadian Institute of Actuaries, “Second Revision of Educational Note: Dynamic Capital Adequacy Testing,” November 2017, excluding Appendix A.

Can you verify that this is what is intended? There are 2 reasons for my query:

• The above deleted DCAT reading has been tested on virtually every past exam and it was supposed to be replaced with an updated version of the same material. If the updated version is not being added to the syllabus, then it seems this topic is disappearing. While it is still covered very briefly in another reading (Canadian Institute of Actuaries, Consolidated Standards of Practice, 1240, 1400, 1510, 1520, 1600, 1700, 2100, 2200, 2400, 2500, and 2600, January 1, 2020) the treatment there is much less detailed. It would likely be difficult to answer questions similar to those on past exams only from the CSOP reading.
• The above deleted DCAT reading is very closely tied to another reading that is not being deleted. (Office of the Superintendent of Financial Institutions Canada Guideline E-18, “Stress Testing,” December 2009.) If this OSFI reading is not being deleted, then some of what is discussed in this OSFI reading will be out of context because of how it's tied to the now deleted DCAT reading.

It just seems strange that such a historically important reading would be deleted from the syllabus without explanation while other closely related readings are kept.

Answer from the Exam-6C committee on Apr 12, 2020

Thank you for your inquiry. You are correct, the DCAT educational note was supposed to be replaced by its new equivalent, the FCT educational note. However, given the delay in the administration of exams, additional or new readings for the Fall 2020 syllabus were deferred to 2021 out of fairness for candidates who have already studied the material for the Spring exam. Please rest assured that only the material listed in the syllabus will be tested.

My comment on their answer

I'm still not completely clear regarding their intentions. Here are a couple of possible interpretations:

1. no questions on DCAT (since the reading was removed), no questions on financial condition testing (since the addition of this reading to the syllabus has been postponed to Spring 2020)
2. no questions on DCAT (since the reading was removed), but there will be questions on financial condition testing (since this is covered briefly in CIA.CSOP)

My recommendation is to carefully study the financial condition testing material from CIA.CSOP as outlined at the top of this page. It shouldn't take very long to do that. I suspect there won't be any detailed questions on this topic until the new reading goes back on the syllabus for Spring 2021.

New update for May 05, 2020

From the CAS website:

• Candidates may use either definition of "satisfactory financial condition" and "classification of scenarios" as found in the Consolidated Standards of Practice from the Canadian Institute of Actuaries (CIA CSOP) or in the "Second Revision of Educational Note: Dynamic Capital Adequacy Testing" from Canadian Institute of Actuaries (CIA DCAT).

I'm still not sure what they want exam-takers to do, but I'm guessing if there's a DCAT question on the fall exam they will accept answers based on the old DCAT reading that technically isn't on the syllabus anymore. If I were taking the exam, I would study the old CIA.DCAT reading (click link to go there). You could probably (?) get away with ignoring the new CIA.CSOP material related to financial condition testing. But don't quote me on that!

New update for May 22, 2020

• The CAS has updated the syllabus yet again. They now say they following:

This change, previously announced, will not apply to the Fall examination: Candidates may use either definition of "satisfactory financial condition" and "classification of scenarios" as found in the Consolidated Standards of Practice from the Canadian Institute of Actuaries (CIA CSOP) or in the "Second Revision of Educational Note: Dynamic Capital Adequacy Testing" from Canadian Institute of Actuaries (CIA DCAT).

• They go on to say

The Syllabus posted for the Spring (April) 2020 examination will be used for the Fall (October) examination except as noted below. The following changes will be made for the Fall (October) examination:

1. Delete the reading - Canadian Institute of Actuaries, "Second Revision of Educational Note: Dynamic Capital Adequacy Testing," November 2017, excluding Appendix A.
2. Amend Knowledge Statement C.2.b. from "DCAT" to "FCT."
3. Remove the note that candidates may answer based on either DCAT or FCT.

• What this means: You can no longer use the old definition of satisfactory financial condition from the CIA.DCAT reading. You must use the new definition from CIA.CSOP.