The ABCD: An Overview of Ethics & Professionalism

The ABCD: An Overview of Ethics & Professionalism

The ABCD: An Overview of Ethics & Professionalism Middle Atlantic Actuarial Club presentation May 15, 2019 Brian Jackson, Esq. General Counsel and Director of Professionalism 2019 American Academy of Actuaries. All rights reserved. May not be reproduced without express permission. Disclaimer Please note: The presenters statements and opinions are his own and do not necessarily represent the official statements or opinions of the American Academy of Actuaries (Academy), any boards, councils, or committees of the Academy,

nor do they express the opinions of their respective employers. 2019 American Academy of Actuaries. All rights reserved. Agenda Background on ABCD Code of Professional Conduct Inquiry Process Case Studies

2019 American Academy of Actuaries. All rights reserved. Background on ABCD 2019 American Academy of Actuaries. All rights reserved. Actuarial Board for Counseling and Discipline The ABCD was established in 1991 to provide a single body in the U.S. to: Investigate actuaries compliance with the code of Professional Conduct Counsel actuaries in good professional practice

Mediate disputes between actuaries and others 2019 American Academy of Actuaries. All rights reserved. Actuarial Board for Counseling and Discipline Appointed by Selection Committee 9 members total: A Chairperson Two Vice-Chairpersons

6 regular members 2019 American Academy of Actuaries. All rights reserved. 2019 ABCD Chairperson Dave Ogden (H) Vice Chairpersons Debbie Rosenberg (P/C) John Stokesbury (P)

New Members Alice Rosenblatt (H) Ken Kent (P) Mary D. Miller (P/C) Continuing Members Allan Ryan (L) David Driscoll (P) Godfrey Perrott (L) 2019 American Academy of Actuaries. All rights reserved. Actuarial Board for Counseling and Discipline

Article X of the Academys bylaws ABCD Rules of Procedure Confidential, unless: Actuary makes public or agrees to publication Court requires disclosure 2019 American Academy of Actuaries. All rights reserved. Actuarial Board for Counseling and Discipline

The ABCD investigates cases (except in Canada) involving members of: The American Academy of Actuaries The American Society of Pension Professionals and Actuaries The Casualty Actuarial Society The Conference of Consulting Actuaries

The Society of Actuaries The Canadian Institute of Actuaries (in the U.S.) 2019 American Academy of Actuaries. All rights reserved. An ABCD Inquiry Fact-finding, not an adversarial forum Whether or not actuary materially violated the Code of Professional Conduct

Recommends discipline, when appropriate Member organization determines level of discipline 0 2019 American Academy of Actuaries. All rights reserved. ABCD Inquiries Inquiries 2015 2016 2017

2018 Cases in progress as of Jan. 1 Cases resolved during period Dismissed Dismissed with Guidance Counseling Recommended Public Discipline 10 15 11 0 3 1 14 14 9

1 2 2 19 15 9 2 1 3 26 22 6 7 7 2 New cases during period Cases as of end of period

19 14 19 19 22 26 13 17 1 2019 American Academy of Actuaries. All rights reserved. ABCD Inquiries Primary Practice Area of Subject Actuaries 2015 Casualty

Health Pension Life 6 5 4 14 2016 2017 2018 6 3 20 4

5 6 24 6 6 9 19 5 2 2019 American Academy of Actuaries. All rights reserved. Inquiry Process 2019 American Academy of Actuaries. All rights reserved. ABCD Inquiry Process 1. 2.

3. 4. 5. 6. 7. Initiation of Inquiry Chairs Review Investigation ABCD Consideration Hearing Deliberations Member organization Discipline Panel 4 2019 American Academy of Actuaries. All rights reserved. 5 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 (SA) for response 2019 American Academy of Actuaries. All rights reserved. Step 2: Chair Review

Chairs evaluate complaint and response for possible material violation Chairs decide whether to: Seek additional information Dismiss the complaint Refer the case for mediation Commence investigation 6 2019 American Academy of Actuaries. All rights reserved. Step 3: Investigation

Appoint investigator, subject to challenge by the Subject Actuary Investigator Obtains and reviews documents Interviews individuals involved Prepares report of results, i.e. facts as investigator understands them Report sent to SA for response 7 2019 American Academy of Actuaries. All rights reserved. 8 Step 4: 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 Subject Actuary Conduct a hearing 2019 American Academy of Actuaries. All rights reserved. 9 Step 5: Hearing (Not a TRIAL!!) Conduct fact finding hearing

attended by Investigator Subject Actuary (SA may also have attorney present) Witnesses Hearing is recorded by a court reporter Investigator presents results ABCD and SA question investigator Subject Actuary presents case

ABCD questions Subject Actuary 2019 American Academy of Actuaries. All rights reserved. 0 Step 6: Deliberations ABCD discusses hearing and documents Decides whether to Dismiss Counsel Recommend discipline Private Reprimand Public Reprimand Suspension

Expulsion Obtain more information, reopen hearing 2019 American Academy of Actuaries. All rights reserved. Request for Guidance Private Guidance by ABCD member Expresses members own opinion Private guidance by the ABCD Expresses views of the board

1 2019 American Academy of Actuaries. All rights reserved. 2 Request for Guidance Examples 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? 2019 American Academy of Actuaries. All rights reserved. 3 Actuaries can request confidential guidance by: Contacting the ABCD office by phone or e-mail and requesting assistance

Telephone: 202-223-8196 Website: www.abcdboard.org Contacting any ABCD member by phone or e-mail Website: www.abcdboard.org Writing a letter to the ABCD office. 1850 M St., Suite 300, Washington, D.C. 20036 2019 American Academy of Actuaries. All rights reserved.

U.S. Code of Professional Conduct 2019 American Academy of Actuaries. All rights reserved. U.S. Code of Professional Conduct 14 Precepts 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. Annotations provide further guidance

5 2019 American Academy of Actuaries. All rights reserved. 6 U.S. Code of Professional Conduct Represents Common Sense Ethics Respect Others Be Honest

Be Responsible Keep Promises Be Loyal Be Fair Pursue Excellence 2019 American Academy of Actuaries. All rights reserved. Precept 1: Integrity

Act honestly Act with integrity and competence Fulfill the professions responsibility to the public Uphold the reputation of the profession 7 2019 American Academy of Actuaries. All rights reserved. Precept 2: Competence

Have the basic and continuing education and experience needed to be qualified. Follow the Qualification Standards. If no Qualification Standards apply, use professional judgment to evaluate your education and experience. 8 2019 American Academy of Actuaries. All rights reserved. Precept 3: Standards of Practice Follow the ASOPs!!! Annotation 3-1: Keep current and comply with applicable standards of practice.

Annotation 3-2: When applicability is in question, use professional judgment. Be prepared to justify deviations. 9 2019 American Academy of Actuaries. All rights reserved. 0 Precepts 4, 5 & 6: Communications and Disclosure Take steps to ensure that Actuarial Communications are clear and appropriate.

Actuarial communications must: Be clear and appropriate Identify the responsible actuary Indicate who can provide supplementary information Identify the Principal 2019 American Academy of Actuaries. All rights reserved. Precept 6 Disclose material compensation to Principals.

If you are not independent, disclose any pertinent relationship that is not apparent. This Precept applies to your entire firm. 1 2019 American Academy of Actuaries. All rights reserved. Precept 7: Conflict of Interest Dont provide professional services involving a conflict of interest unless: You can be unbiased;

There has been full disclosure; and All Principals have expressly agreed. 2 2019 American Academy of Actuaries. All rights reserved. Precept 8: Control of Work Product Dont let your services be used to mislead. Annotation 8-1: Avoid risk of misquotation, misinterpretation, or other misuse of your work by being clear and fair and limiting distribution and use. 3 2019 American Academy of Actuaries. All rights reserved.

Precept 9: Confidentiality Do not disclose confidential information unless authorized by the Principal or required to do so by Law. 4 2019 American Academy of Actuaries. All rights reserved. Precept 10: Courtesy & Cooperation Play well with others!!! Be courteous when discussing differences of opinion. Principals can choose their own Actuaries.

Alternative opinions are okay. Consultations are permitted. Furnish relevant information. 5 2019 American Academy of Actuaries. All rights reserved. Precept 11: Advertising No false or misleading advertising.

This includes oral communications. 6 2019 American Academy of Actuaries. All rights reserved. Precept 12: Titles & Designations Make appropriate use of titles and designations. Title is a specific position (e.g., committee chair). Designation is a membership status (e.g., MAAA). 7 2019 American Academy of Actuaries. All rights reserved.

Precept 13: Violations of the Code Resolve apparent material violations of the Code, preferably through discussions with the other Actuary. Annot. 13-1: Violations are material if they are important or affect an outcome. Annot. 13-2: Discussion is not expected if the Actuary is prohibited by Law or acting an adversarial environment. 8 2019 American Academy of Actuaries. All rights reserved. Precept 14: Cooperate with ABCD Respond promptly, truthfully, and in writing to inquiries from the ABCD be cooperative.

9 2019 American Academy of Actuaries. All rights reserved. Case Studies 2019 American Academy of Actuaries. All rights reserved. Questions? 1 2019 American Academy of Actuaries. All rights reserved.

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