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Academy InSights
A Look at the Years Leading Up to the Academy’s Founding
AS PART OF OUR 50TH-ANNIVERSARY CELEBRATION, the
Academy is producing a number of publications that explore the circumstances that led to the creation of the Academy, detail how the
Academy has fulfilled its mission to serve the public and the U.S. actuarial profession through the years, and look ahead to the next 50 years
of service.
One of these publications is
Charting the Course, a thorough
history of the U.S. profession
and the Academy’s vital role in
supporting that profession. The
excerpt below explores the late
1950s and early 1960s, and details
why the Academy was created to
be the home for the U.S. actuarial
profession.
Unifying a Profession
The next decades of the 20th century saw a tremendous increase
in the need for actuarial services,
as new insurance products and
pensions became an increasingly
important part of American life
and the security of the growing
middle class. From the creation of
the U.S. Social Security program
in the 1930s during the depths of
the Depression, to the growth of
private pension plans, to the proliferation of health insurance after World
War II, the profession needed to expand
and evolve to meet the new challenges
of creating and administering these benefit plans. It was during the war that the
U.S. government, in the form of the War
Manpower Commission, first asked the
Actuarial Society of America and the
American Institute of Actuaries to define
“actuary” for the government, attesting
to the profession’s growing importance
to public administration.
During this time, actuarial societ-
ies also evolved to meet the needs of
the profession. In 1949, the two societ-
ies representing primarily life insurance
and pension
actuaries, the Actu-
arial Society of America and the
American Institute of Actuaries, merged
to form the Society of Actuaries (SOA) as
the 19th-century limits of geography and
communications that spurred the need
for two separate organizations waned.
In 1950, the Conference of Actuaries in
Public Practice was founded.
But the proliferation of actuarial
societies posed a conundrum. While
specialized societies were needed to rep-
resent the various facets of the profession
and to provide appropriate research and
training, the profession lacked a unified
voice at the national level or a generally
agreed-upon set of basic qualifications
for actuarial competency. As essential
as actuaries had become to the function-
ing of modern insurance and pension
products, there was no certification or
licensing for actuaries similar to what
was required of lawyers or other profes-
sions that exercised a similar degree of
responsibility.
Once again a farsighted indi-
vidual was on hand to guide the
profession. In a 1958 address to the
SOA, Henry Rood, chief actuary for
Lincoln National Life Insurance and
the president of the society, put out
a clarion call to the profession to
change from what he later called “a
private, inward-looking, narrowly
focused group of experts to that of
a profession recognized by and ac-
countable to the public.”
Rood noted that there were 117
million people in the United States
and Canada insured by life insurance
companies and 18 million people
counting on private pensions for their
retirement. “What is our responsibil-
ity as individuals and as members of
the Society of Actuaries to see that
the hopes and plans of these millions
of citizens are not frustrated because of
pseudoactuarial practices that are un-
sound?” he asked, the question springing
from what was obviously a deeply person-
al interest in the future of the profession.
He continued, “The question of legal rec-
ognition of actuaries can no longer be
ignored. The millions of people involved
and the immense size of the assets of our
life insurance companies and pension
funds dictate protection from any possi-
bility of unsound actuarial practices.”
The question of some type of accreditation for actuaries was becoming
increasingly urgent with the passage of
disclosure laws for employee benefit
plans, which had grown tremendously
since the 1940s. The federal Welfare
and Pension Plans Disclosure Act, as
well as similar state laws, required the
