Hello Everyone. I am an insurance company analyst with an undergraduate degree in accounting and a Master’s Degree in Personal Financial Planning with an interest in pursuing the CFA designation subsequent to finishing another designation that I am currently pursuing. However, I do have a question(s) regarding the experience requirements for the CFA. According to the CFA Institute, one must have 4 years (48 months) of experience in “evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process; supervising persons who conduct such activities; or teaching such activities” and “at least 50% of your time should be spent directly involved in the investment decision-making process or producing a work product that informs or adds value to that process. Work must be full time and can be earned before, during, or after participation in the CFA Program”.
I currently work for the Insurance Division under a State Department of Business Regulation. My main concentration is in “Foreign Company Licensing/Analysis” and secondary to that is “Market Conduct Analysis” with duties & responsibilities as follows:
- Foreign Company Licensing:
- Foreign Company Licensing is the process of analyzing and determining if a foreign insurance company (an insurance company selling policies in a state other than the state in which they are incorporated or domiciled) is eligible to be considered for a license to transact insurance business within another jurisdiction.
- I prepare rigorous and independent financial and operational analyses of foreign insurance companies of all types (life and health or property and casualty, etc.) with a focus on financial solvency by assessing capital & surplus, investments, reserves, cash flows, profitability and other areas. Other analytical duties include performing projections, reviewing mergers & acquisitions and investment strategies & portfolios. Resources used throughout the analysis are as follows:
- Annual & quarterly statements (Statutory-Based Accounting)
- Various NAIC-database reports on financial ratios & information
- Reports on investment strategy, portfolio & management
- Enterprise Risk Management
- Proposed plan of operation
- Business plans & strategies
- Corporate governance & management
- Independent Certified Public Accountant’s Report, Management Discussion & Analysis and Actuarial Opinion
- Analysis reports from domiciled jurisdiction
- Analyses and ratings from insurance rating agencies on a Company’s financial condition & investment position
The Company applying for a state license is looking to expand its business geographically and invest capital through a foreign investment (an investment in a foreign jurisdiction). The analysis subsequent to reviewing the application will determine if the Company’s presence will or will not be detrimental to the residents of the state. In conclusion, a final decision is made whether or not to accept, deny or ask the Company to withdraw its application.
- Market Conduct Analysis:
- Market Conduct is defined as “a common term used in the insurance industry to describe problems associated with the distribution and sale of insurance”.
- Responsible for managing and performing analyses of major insurance companies’ marketing, distribution, underwriting (includes pricing), rating, policyholder service, complaints handling and claims handling processes to verify compliance with state insurance laws that include financial solvency, investment requirements and consumer protection.
- Major emphasis on consumer protection and oversight of company conduct through market conduct analysis and examinations.
- Ensure consumers have access to beneficial and compliant insurance products, and are protected against insurers that fail to operate in ways that are legal and fair to consumers.
- Analyze various insurance products such as life insurance, disability insurance, healthcare, long-term care, annuities, and property & casualty.
I am thinking that Foreign Company Licensing/Analysis (see #1 above) will be more applicable towards the CFA experience requirements due to its analytical role and involvement with investments. As CFAs or CFA candidates, I was wondering if this role (Foreign Company Licensing/Analysis) can full-fill the professional experience requirement for the CFA? If yes, please let me know and if not, please explain why? Also, are there any recommendations to possibly edit/re-word my job description above in order to make it applicable towards the professional experience requirement for the CFA? I would appreciate any advice and/or assistance.
Thank you in advance for your cooperation.