Professionalism as an Ethical Framework

Professionalism as an Ethical Framework

For Tom Wildsmith, who considers himself to be a non-traditional actuary, professionalism is more than just a technical competence: it’s about a profession designed to put obligations to the public first.

Tom Wildsmith

I’m in a non-traditional role. I do government relations work, in particular, regulatory affairs. My job involves interpreting proposed new regulations, assisting my employer in developing a position on them, and developing formal comment letters. More generally, I represent my employer to federal regulators in a variety of settings, both formal and informal. This includes apologizing to regulators when something goes wrong, and explaining what happened and what we’re doing to fix it. My particular area of expertise is health policy, including health reform and Medicare issues. I first became involved in health policy work during the Clinton health reform debate.


For me, the heart of professionalism is recognizing that I have moral obligations that extend beyond my employer, or my own personal career. Depending on the specific circumstances, that may include obligations to my employer’s clients, to regulators, to the participants in a benefit program or to the public at large. This recognition is a key defining difference between a mere technical expert and a true professional.

"For me, the heart of professionalism is recognizing that I have moral obligations that extend beyond my employer, or my own personal career."

Balancing our Obligations to our Employers, our Clients, our Regulators, and the Public


Earlier in my career I worked for a health insurance trade association. Part of my job was developing cost estimates for legislative and regulatory proposals that would affect health insurance companies. These estimates would be used in our advocacy. In other words, the trade association lobbyists would take my numbers to congressional offices and say either “you should vote for this, because we estimate that it would save $X” or “you should vote against this, because we estimate that it would cost $y.” This is a normal and necessary part of the advocacy process; interests groups on all sides of an issue have to look at costs and benefits to be credible. It’s also normal to have competing estimates, which sometimes vary dramatically.


How do you do this in an ethical, professional manner? There are several of the Actuarial Standards of Practice that clearly apply. Taken together, they require you to prepare and communicate your work in a way that contributes to the public policy debate. Your assumptions must be reasonable, and you have to fully disclose them in a way that is understandable to your intended audience. As with most actuarial work, assumptions are key.


Some of my most difficult conversations were around what assumptions were reasonable, and the need to show a range of results to illustrate the range of potential outcomes. At times, that meant telling my boss “I’m sorry, but the proposal we’re opposing just won’t increase costs by much” or “what we’re asking for won’t generate the savings you were expecting.” The issue, of course, was that I was taking away an argument for the trade association’s position.


Of course, this challenge isn’t unique to public policy work. It comes up whenever a pension valuation comes out higher than the plan sponsor expected, a reserve calculation requires an insurer to set aside extra money, or more generally, whenever our results represent “bad news” for our employers or clients. The Code of Conduct and Actuarial Standards of Practice provide us with a practical set of guidelines for balancing our obligations to our employers, our clients, our regulators and the public that depends on our work. When we understand this, they no longer seem like an arbitrary set of hoops that we have to jump through. Instead, they become an ethical framework that can support actuaries through difficult decisions and tough conversations.


“What sets us apart from data scientists or health economists is not that we are smarter than they are, or have secret algorithms that no one else understands, but that we’ve consciously organized our profession in a way that is designed to put our obligations to the public first.”

Viewing Professionalism as an Ethical Framework

Professionalism is much more than technical competence. Competence is assumed, because a professional will not agree to do work they aren’t competent to perform -that’s the point of our qualification standards. But there’s nothing unique about competence – there are many technical occupations full of people who are highly skilled and competent. What sets us apart from data scientists or health economists is not that we are smarter than they are, or have secret algorithms that no one else understands, but that we’ve consciously organized our profession in a way that is designed to put our obligations to the public first. That’s why a health actuary can sign certain regulatory filings, but a health economist can’t. It’s not that the actuary is smarter – it’s that the actuary is a professional.

It helps me to remember that our professionalism requirements aren’t arbitrary rules. What actuaries do, and the impact it has on real people, places are real ethical obligations on us – obligations that we would still have even if the Academy had never been created and none of the various formal standards had ever been written. What the Academy has done is given us a framework to help understand what our obligations are, and what we need to do to meet them in a responsible way. Viewing professionalism as an ethical framework helps us make better decisions in difficult situations – it helps us “do the right thing.”



May, 2019

Tom Wildsmith

Former President,

American Academy of Actuaries

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