ALL 10 | A Look Towards the Spring 2015 CAS Exam 7

If you are planning to sit for the Spring 2015 CAS Exam 7 it’s important to look at how the content in the syllabus readings has been tested over time. One major change was the adoption of the 2011 CAS syllabus readings for Exam 7, “Estimation of Policy Liabilities, Insurance Company Valuation, and Enterprise Risk Management” which resulted in an extensive overhaul of the existing exam questions.

Approximately 65-70% of the syllabus readings were newly adopted, which, for CAS candidates sitting for the exam at that time meant that there were no past CAS questions to rely on for exam preparation purposes. The greater challenge candidates faced was aligning the CAS learning objectives and knowledge statements to content presented in the syllabus readings as much of the content in Syllabus Section A, and all of the content in Syllabus Section C was completely new.

Today’s candidates now have the benefit of reviewing four past CAS Part 7 exams to get a better understanding of how best to prepare for the Spring 2015 exam.

Let’s start with a breakdown of question content and type from the Spring 2014 Exam:

There were 27 questions testing the content from 19 articles.
14 questions were associated with content from readings in syllabus section A, 3 from syllabus section B and 10 questions were associated with syllabus section C readings.
Approximately 55% of the points came from short answer questions while the remaining 45% were computational.

As with many past CAS exam questions, a number of computational questions had “unique” twists to them, some were “repeat” type questions, many were “new” questions.

Why was the Spring 2014 Exam 7 so radically different?

More questions testing content from fewer readings
This exam differed from prior exams in that it contained more questions testing content from fewer readings. Questions from the Hürlimann article, Mack Credible Claims Reserve article, and the Venter article on Copulas were most notable among the articles not tested.

A noticeable increase in short answer questions
55% of the points were short answer oriented, a noticeable increase over the 43% of the points tested in 2013 and 32% of the points tested in 2011.

More new questions
New questions accounted for a significant percentage of the points compared to repeat questions.

Direct questions
A review of many of the questions showed that they could be answered directly from the content found in the syllabus readings (e.g. question 2 was based on content discussed in section 6 of the Mack 94 article). Answering such questions helps when the actual syllabus readings are reviewed.

What about Effective Pass Ratios and “Minimally-Acceptable Competency”?
The effective pass ratio for the Spring 2014 Exam 7 was nearly 59% (don’t we wish that all pass ratios in the future would be so high). That’s significantly higher than the 44.8% effective pass ratio in 2012 and the 32.7% effective pass ratio in 2013. As you may know, the effective pass ratios are based on the passing score on each CAS exam, which are “directly linked with the minimally-acceptable competency in the aspect of practice the particular exam is assessing. The passing score is objectively set so that each and every examinee who meets or exceeds that passing standard (passmark) will pass the exam. Those who do not meet the standard will not pass the exam.” – Read more about CAS standards here

Best preparation advice

Make sure to read the chapters from “Enterprise Risk Analysis”, which are new to the Spring 2015 Exam 7 Syllabus, replacing the Brooks et al. readings. The content in these readings are vast in terms of topics covered and will surely account for more points than the content covered by its predecessor.

Make strategic use of multiple study aids and heed the CAS examiners’ advice when they say, “candidates should be cautious of relying solely on study manuals, as some candidates lost credit for failing to provide basic insights that were contained in the syllabus readings.” Although this advice was given specifically in the CAS Exam 5 Spring 2014 Examiner’s Report, almost all test prep providers would echo this comment to candidates sitting for any CAS exam.
Coming soon: an examination of the new, repeat, and twist type questions.

December 9, 2014