Copyright © 2009 by the Actuarial Board for Counseling and Discipline Copyright © 2010 by the...

Copyright © 2009 by the Actuarial Board for Counseling and DisciplineCopyright © 2010 by the American Academy of Actuaries

Actuarial Board for Counseling and Discipline

Middle Atlantic Actuarial Club

Baltimore, Maryland

7 October 20101



The ABCDs of

PROFESSIONALISM

Curtis E. HuntingtonFSA, MAAA, FCA, COPA

2


Agenda

• Background on ABCD

• Code of Professional Conduct

• Discipline Process

• Ethical Dilemma

3



ABCD was established in 1991 by the U.S. actuarial organizations to– Investigate alleged violations of the

Code of Professional Conduct by members and recommend discipline

– Counsel (provide guidance to) members

– Mediate disputes between members and others. 4


ABCD Membership

Appointed by Council of U.S. Presidents - CUSP (Presidents and Presidents-elect of U.S. organizations)

Member Area of PracticeCarol Sears, Chairperson PensionsPaul Fleischacker, Vice Chairperson HealthCurtis Huntington, Vice Chairperson LifeLinda Bell CasualtyJames Gutterman HealthKurt Piper PensionsJohn Purple CasualtyDick Robertson LifeBob Rietz Pensions

5


ABCD Processes

• Follow Article X of AAA bylaws and ABCD Rules of Procedure

• All ABCD inquiries, guidance and mediation confidential, unless– Actuary makes public or agrees to

publication– Court requires disclosure– Redacted, generic situation used for

educational purposes 6


An ABCD Inquiry

• Is a fact-finding effort, not an adversarial forum

• Examines whether or not an actuary materially violated the Code of Professional Conduct– not whether the actuary is liable for

damages

7


U.S. Code of Professional Conduct

• The revised U.S. Code of Professional Conduct (“Code”) was adopted by the five U.S.-based actuarial organizations (Academy, ASPPA, CAS, CCA & SoA), and took effect 1 January 2001.

• The Code sets forth professional/ethical standards for actuarial members of the five U.S.-based actuarial organizations.

8



• The Code contains 14 Precepts, along with annotations providing further guidance on adhering to the Precepts.

• The Precepts are standards that must be followed by credentialed actuaries who are members of one of the U.S.-based organizations or whose member organizations require their members to follow the U.S. Code.

9



• Precept 1 Professional Integrity:An actuary shall act honestly, with

integrity and competence, and in a manner to fulfill the profession’s responsibility to the public and to uphold the reputation of the actuarial profession

10



• Precept 2 Qualification Standards:

An Actuary shall perform Actuarial Services only when the Actuary is qualified to do so on the basis of basic and continuing education and experience and only when the Actuary satisfies applicable qualification standards.

11



• Precept 3 Standards of Practice

An Actuary shall ensure that Actuarial Services performed by or under the direction of the Actuary satisfy applicable standards of practice.

12



• Precept 4 Communications

An Actuary who issues an Actuarial Communication shall take steps to ensure that is clear and appropriate to the circumstances and audience and satisfies applicable Standards of Practice.

13



• Precept 5 Communications

Appropriately identify the principals and describe the capacity in which you serve.

14



• Precept 6 Disclosure

Make appropriate and timely disclosure to present or prospective principals of sources of all direct and indirect material compensation you or your firm receives that relates to any assignment for that principal. 15



• Precept 7 Conflict of Interest

Do not perform actuarial services unless:1. your ability to act fairly is unimpaired;

2. you have disclosed conflict to all; AND

3. you secure agreement from all principals.

16



• Precept 8 Control of Work Product

Take reasonable steps to ensure your services are not used to mislead other parties.

17



• Precept 9 Confidentiality

Do not disclose confidential information to another unless authorized by principal OR required by law.

18



• Precept 10 Courtesy and Cooperation

Perform actuarial services with courtesy and professional respect and cooperate with others in the principal’s interest.

19



• Precept 11 Advertising

Do not engage in advertising or business solicitation activities that are false or misleading.

20



• Precept 12 Titles and Designations

Use membership titles and designations only in conformity with authorized practices.

21



• Precept 13 Violations of the Code

If you know of an apparent, unresolved, material violation of the Code by another actuary and have attempted to resolve that violation through discussions that have been unsuccessful, you should disclose the violation to the ABCD.

22


U. S. Code of Professional Conduct

• Precept 14 Cooperation with ABCD

Respond promptly, truthfully and fully to requests from the ABCD subject to restrictions on confidentiality and those imposed by law.

23


ABCD Inquiry Process

In 2008, the ABCD considered 37 Cases.

Conduct – 21 Cases

Practice – 12 Cases

Conduct & Practice – 4 Cases

More than 50% of Cases were from Pension Practice

24


Request for Guidance

• Private guidance by ABCD member– Expresses member’s own opinion

• Private guidance by ABCD– Expresses views of board

• Public guidance by ABCD– At request or agreement of actuary(ies)– Provides guidance to profession– Expresses views of board

25



Example of RFG Topics• How do I know if I am qualified?• How can I become qualified?• How can I do a job that involves more than one area of

expertise?• How much can I rely on my supervisor?• How much can I rely on my staff?• How much documentation of my work should I save?

What if I leave my company?• When should I refuse an assignment?• When should I make a complaint about another actuary?• When is a violation of the Code material?• When is a violation of the Code resolved?

26



In 2008, the ABCD handled 48 RFGs.

Precept 1 – 14

Precept 2 – 9

Precept 3 – 9

Precept 13 – 8

Precepts 4, 5, 6, 7, 8, 9, 10 - ≤ 5 each

Precepts 11, 12, 14 - None 27



Examples (Most Common):

1.How do I meet Qualification Standards (#2)

2.Should I file a Complaint (#13)

3.What are my responsibilities to my Client if I have not been paid? (#1)

4.How do I manage newly found data? (#3)

28


Mediation

• If all parties agree

• Facilitate resolution of issue without inquiry

29


Contacting the ABCD

• Letter: 1850 M St., N.W., Suite 300, Washington, D.C. 20036

• Telephone: (202) 223-8196; (202) 872-1948 (fax)

• Website: www.abcdboard.org

• Contacting any individual ABCD member or ABCD staff (contact information on website) 30



• Step 1: Initiation of Inquiry– Complaint received

• Reviewed by staff for completeness

– Information based• Chairs review public document and

decide to proceed

– Sent to subject actuary for response

31



• Step 2: Chairs’ review– Chairs evaluate for possible material

violation– Chairs decide whether to

• Seek additional information• Dismiss complaint• Offer mediation• Commence investigation

– Notify subject actuary, complainant and ABCD 32



• Step 3: Notification– Notify subject actuary and

complainant, if any, of Chairs’ decision– Notify ABCD at next meeting

33



• Step 4: Investigation– Appoint investigator, subject to

challenge– Investigator

• obtains and reviews documents, • interviews individuals involved,• prepares report of results, i.e. facts as

investigator understands them

– Report sent to subject actuary for response 34



• Step 5: ABCD consideration– All documents sent to ABCD members– Case discussed at ABCD meeting– ABCD decides whether to

• Seek additional information• Dismiss (with/without guidance)• Counsel the actuary• Conduct a hearing

35



• Step 6: Notification– Notify subject actuary, complainant

and investigator of decision– Schedule hearing, if so decided

36



• Step 7: Hearing– Conduct fact finding hearing attended by

• Investigator• Subject actuary

– Hearing is recorded by a court reporter– Investigator presents results

• ABCD and actuary question investigator

– Actuary presents case• ABCD questions actuary

37



• Step 8: Deliberations– ABCD discusses hearing and

documents– Decides whether to

• Dismiss• Counsel• Recommend discipline• Obtain more information, reopen hearing

38



• Step 9: Notification– Notify subject actuary, complainant

and investigator of decision– If discipline is recommended, transmit

to appropriate organization(s)• Statement of ABCD findings• All documents used by ABCD• Transcript of hearing

39



• Step 10: Member Organization– If discipline is recommended– Conducts “proceedings” hearing

according to its rules– May decide to

• Impose recommended discipline• Impose greater level of discipline• Impose lower level of discipline or none

40


Ethical Dilemmas

ETHICAL DILEMMA

41


Ethical Dilemmas

SITUATION:

You have prepared a proposal for a major government contract that could be worth $10 million over the next 5 years and, if you win it, would really establish your new firm (which is finding the going pretty tough). 42


Ethical Dilemmas

You are now flying to Washington to present to the selection panel, and cannot help noticing that two partners from a (rather sleepy) large professional services firm are sitting in the two seats in front of you. The seat beside you is vacant.

43


Ethical Dilemmas

You know who they are, but are pretty sure they don’t know who you are. They are discussing the same project that you are concerned with. They are your key competitor for the business, and if your firm is to survive, you have to win against them, and soon.

44


Ethical Dilemmas

Try to answer yes or no, and be prepared to give reasons.

• A lot of very useful-sounding numbers are mentioned. Is it OK to take notes?

• It’s too much to write down. OK to turn on your tape recorder?

45


Ethical Dilemmas

• They leave papers in the seat pocket. They’re not marked “Confidential”. OK to take them?

• Is it OK to listen actively, hoping to pick up useful information?

• They are marked “Confidential”. OK to take them now?

• Etc. 46


THANK YOU47


Contacting the ABCD

• Letter: 1850 M St., N.W., Suite 300, Washington, D.C. 20036

• Telephone: (202) 223-8196; (202) 872-1948 (fax)

• Website: www.abcdboard.org

• Contacting any individual ABCD member or ABCD staff (contact information on website) 48

Copyright © 2009 by the Actuarial Board for Counseling and Discipline Copyright © 2010 by the...

Documents

Transcript of Copyright © 2009 by the Actuarial Board for Counseling and Discipline Copyright © 2010 by the...