Institute of Actuaries of India (IAI) | ACET | Exam Pattern | Exemptions

IAI The Institute of Actuaries of India

Institute of Actuaries of India (IAI) is the governing body of the Actuarial Profession in India. It is formed by the conversion of the Actuarial Society of India by virtue of the Actuaries Act, 2006. In this article, we shall discover its history, ACET (Actuarial Common Exam Test), Exam pattern and Exemptions.

History of IAI:

The Former Actuarial Society of India (ASI) was established in September 1944. It was formed by 21 fellow members qualified from the Faculty and Institute of Actuaries (currently known as IFoA). In 1979, ASI was admitted as a full member of the International Actuarial Association. In 1982, it was registered under Registration of Literary, Scientific and Charitable Societies Act XXI of 1860 and the Bombay Public Charitable Trust Act, 1950. Until 1989, it remained as a part of the UK Actuarial Organization for Educational and Professional purposes. After that, it started its examinations for the Associate level and in 1991, it started conducting Fellowship level examination leading to the professional qualification of an actuary in India.

On 8th November 2006, Ministry of Finance of Government of India had issued an Act for regulation of Profession of Actuaries in India, The Actuaries Act 2006 (35 of 2006). The provisions of the Act have come into force from 10th of November 2006. As a result, the former ASI was dissolved and all its Assets and Liabilities were transferred to and vested in the Institute of Actuaries of India (IAI).

Entrance Exam of IAI:

The first step is to become a member of the Institute, i.e. the candidate has to pass an entrance exam. IAI had started conducting its entrance exam Actuarial Common Entrance Test (ACET) in January 2012. This exam has undergone many changes in its structure from the year 2012.

The new structure with effect from 16 July 2019 is as follows:

A) It is a 3 hour, 100 marks online exam which has 70 multiple choice questions with one correct answer for each question

B) The distribution of questions is among sections:

   a. 45 questions – 1 mark each
    b. 20 questions – 2 marks each
    c. 05 questions – 3 marks each

After successful registration, students will be able to download the sample question paper for the examination.

Syllabus:

It is provided by the Institute at its official website which is divided into five subjects:

1. Mathematics –> It consists of 10+2 level Mathematics. The topics are Notation and standard functions, Numerical Methods, Algebra, Differentiation, Integration, Vectors, Matrices.

2. Statistics –> It consist of vast topics i.e. Permutation and Combination, Types of Data – Statistical Diagram, Measures of Central Tendency, Measures of Spread, Probabilities, Advanced Probabilities, Discrete Random Variables, Continuous Random Variables, Discrete Distribution, Continuous Distribution, Regression and Correlation.

 3. English –> Questions based on this section are based on Verbal Ability.

 4. Data Interpretation –> In this section, data is given in the form of table, chart and graph. Candidates are tested on how you interpret the given data and answers the questions based on it.

 5. Logical Reasoning –> It consist of topics like Number and Letter Series, Calendar, Clock, Cubes, Venn Diagram, Binary Logic, Seating Arrangement, Logical Sequence, Logical Matching, Logical Connectives, Syllogism, Blood Relation.

Booklets named FAC and STAT pack are provided by Acted at a nominal cost for preparing the Mathematics and Statistics portion.

For more details about Syllabus and books regarding ACET go to link provided:

 http://www.actuariesindia.org/subMenu.aspx?id=381&val=Syllabus

C) Passing percentage of entrance exam is 50% marks.

In order to increase the memberships, in January 2020 Institute has enhanced the criteria for taking student membership.

Enhanced criteria for membership is mentioned in the link provided:

http://www.actuariesindia.org/downloads/Note%20on%20Enhancement%20of%20IAI%20Student%20Membership.pdf

Also, students coming under a given criteria don’t have to appear for ACET.

Exams of IAI:

After clearing ACET and paying membership fees, candidate can appear for further examinations. In order to become a Fellow Actuary from IAI one has to pass 13 exams according to the new curriculum 2019. Though a candidate can appear for exams in any order without any restrictions but certain subject requires knowledge of other subjects. Thus, before deciding on the order of exams an expert opinion should be taken. Exams are been conducted twice a year, each in June and November.

All the exams are divided into four stages as follows :

  • Core Principles – 7 Exams
  • Core Practices – 3 Exams
  • Specialist Principles – 2 Exams
  • Specialist Advanced – 1 Exam

1. Core Principles:

This stage is subdivided into three parts as follows:

  •  Actuarial Mathematics (Core Mathematics – CM)
  •  Actuarial Statistics (Core Statistics – CS)
  •  Business (Core Business – CB)

Each of these subjects have 100 marks written exam and 100 marks software based exam.

Subject CodeSubject Detail
CM1Actuarial Mathematics
CM2Loss Reserving and Financial Engineering
CS1Actuarial Statistics
CS2Risk Modelling and Survival Analysis
Subject CodeSubject Detail
CM1 and CM2Excel based software exam
CS1 and CS2R Programming based Software Exam

Final result gives 70% weightage to written exam and 30% to software based exam.

Subject CodeSubject Detail
CB1Business Finance
CB2Business Economics
CB3Business Management

Each of the above subjects have 100 marks written exam with some multiple choice kind of questions.

2. Core Practices:

This stage consists of subjects with practical applications. It’s required to pass all three subjects at this stage and these are as follows:

a) CP1 – Actuarial Practice: This exam is assessed by two papers. Each of the paper is for three hours duration 15 minutes time. The marks of the two papers are added together to give a single mark for CP1.

b) CP2 – Modelling Practice: This online exam aims to ensure that you understand how to model data. You are required to document the work which also includes maintaining an audit trail, analyse the methods used and results generated. Then communicate these along with your conclusions to an actuarial audience. You will need a working knowledge of spreadsheets and word.

c) CP3 – Communication Practice: It is the exam which test the capability of the candidates about effectively communicating their actuarial work to the non-actuarial audience. This is a computer-based exam appeared using the MS-word.

3. Specialists Principles:

At this stage, candidates have choice to pass the exams, it depends on their interest. Any two subjects have to be passed from the eight offered subjects.

These subjects are as follows:

Subject CodeSubject Detail
SP1Health and Care
SP2Life Insurance
SP4Pensions and other benefits
SP5Investment and Finance
SP6Financial Derivatives
SP7General Insurance: Reserving and Capital modelling
SP8General Insurance Pricing
SP9Enterprise Risk Management

4. Specialist Advanced:

Here’s the final stage and in this stage candidate have to pass one subject from the five. After passing this stage candidate will get the signing authority on various reports in the industry based on the passed subject as per rules and regulations of the Government of India.

Subject CodeSubject Detail
SA1Health and Care
SA2Life Insurance
SA3General Insurance
SA4Pensions
SA7Investment and Finance

Important note:

  • In order to become an Associate Actuary, a candidate has to clear Core Principles and Core Practice group along with one year of work experience.
  • In order to become a Fellow Actuary, a candidate has to clear all the four groups with 3 years of work experience.

Exemptions of IAI:

Institute has ties with various institutions for mutual exemptions. These Institutes are as follows :

1. Institute and Faculty of Actuaries

2. Casualty Actuarial Society

3. Indian Statistical Institute, Kolkata

All the details about exemptions are provided on the official website of Institute:

http://www.actuariesindia.org/subMenu.aspx?id=325&val=Exemptions

After 2019 curriculum, Institute has changed the pattern of exemptions. Now institute will provide exemptions only for the exams passed before 31st December 2018. Thus, exemption applications received until 31st December 2023 will only be processed.

Institute has organized various seminar on different subjects in India. They are as follows:

  1. 21st Global Conference of Actuaries
  2. Data Science and Analytics
  3. IFRS 17
  4. Banking Finance and Investment
  5. Enterprise Risk Management

Also read: IFOA vs IAI: Current trends and Future analysis

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