UP TO CODE
This is a regular column in Contingencies. Written mainly by members of the Actuarial Board for Counseling and Discipline, "Up to Code" articles reflect the wide variety of issues that are brought to the ABCD’s attention during the request for guidance and complaint processes.
A LITTLE HELP FROM MY FRIENDS
Albert J. Beer
Judging by vocal tones and body language, I think it is reasonable to assume that, upon hearing a reference to the Actuarial Board for Counseling and Discipline (ABCD), most actuaries would be more likely to think of the phrase “I’m from the IRS and I’m here to help” rather than a pleasant Beatles tune.
I think it is fair to say that many actuaries today lack a clear understanding of the role of the ABCD. To address this, many of my colleagues have written extensively in prior “Up to Code” articles describing the structure and role of the ABCD in great detail (e.g., “Exercising Professional Judgment in a Self-Regulated Profession,” July/August 2019, by Allan W. Ryan).
In addition to reading these articles, I suggest you take advantage of any number of presentations available on the Academy website, without charge to members, and those offered at actuarial meetings at the local, regional, or national level that explore the entire ABCD process.
Fundamental to all those discussions would be an exposition of three critical components of our professionalism:
The Code of Professional Conduct
U. S. Qualification Standards (USQS)
Actuarial standards of practice (ASOPs)
A common characteristic of all these documents is the significant reliance placed upon professional judgment. As an example, ASOP No. 1, Introductory Actuarial Standard of Practice, states in section 3.1.4:
“The ASOPs are principles-based and do not attempt to dictate every step and decision in an actuarial assignment. Generally, ASOPs are not narrowly prescriptive and neither dictate a single approach nor mandate a particular outcome. Rather, ASOPs provide the actuary with an analytical framework for exercising professional judgment and identify factors that the actuary typically should consider when rendering a particular type of actuarial service. The ASOPs allow for the actuary to use professional judgment when selecting methods and assumptions, conducting an analysis, and reaching a conclusion, and recognize that actuaries can reasonably reach different conclusions when faced with the same facts.”
The intentional avoidance of prescriptive language in all of these documents allows actuaries great professional freedom to produce quality work. However, situations can arise that can present difficult challenges for even the most informed actuary. These may include applying Precepts of the Code, determining whether continuing education (CE) content is appropriate for the USQS, and interpreting multiple ASOPs.
Recognizing this, the ABCD’s charge includes a Request for Guidance (RFG) process specifically designed to give actuaries an opportunity to have an informal, confidential conversation with a peer to help think through some of these often subtle professional and practical issues. In fact, I suspect most readers would be surprised to know that the very first responsibility listed under Primary Functions on the ABCD website is:
Respond to requests from members of the five participating U.S.-based organizations for guidance regarding professionalism
I believe this assistance—which is freely available to all actuaries—represents a significantly underutilized resource of professional advice and counsel.
The ABCD regularly handles over 100 RFGs a year, with requests coming from actuaries from a wide variety of practice areas, experience, and employment affiliations. It would be impossible to quickly categorize the nature of these requests into a few basic types. In order to illustrate the diversity of topics covered, here are a few of the more recent requests handled by the ABCD:
Responding to pressure from principals and/or management to select unreasonable assumptions
“Look in the Mirror Test” as a tool in determining whether one is qualified to issue opinions in nontraditional areas of actuarial practice
Potential level of responsibility an actuary may have in using models developed by others
Examining the scope and definition of “Actuarial Communications” as it applies to internal company memos and conversations
“Semi-retired” actuaries and their responsibilities to stay current
Whether committee work for actuarial organizations can be used to satisfy CE requirements
Assistance in interpreting ASOPs
Disclosing reliance on various external sources of data
Conflict of interest between personal financial gain and proper performance of one’s responsibilities
Obligation to report potential material violations of the Code of Professional Conduct
How to file a complaint
The actuary’s role and responsibilities with respect to work performed with non-actuaries
Potential misuse of work product
I assume that every reader has had to deal with at least one of these “thorny” issues—perhaps a number of them.
The RFG Process
It is important for all actuaries to know that confidentiality is paramount to the ABCD and pervades the entire RFG process. To submit an RFG, you can go through the website of the American Academy of Actuaries (actuary.org) and click on the ABCD icon at the top of the page to get to the ABCD page. You can also get there directly (ABCDBoard.org). Once on the ABCD page, at the bottom you will find an icon—“Ask for Guidance.”
Your request will be immediately handed over to a member of the ABCD who is best qualified to discuss the situation with you. This ordinarily involves a direct phone call from the ABCD member. The whole tenor of the informal conversation is one of identifying relevant facts and sharing ideas regarding pertinent tenets of professionalism. The ABCD member’s sole role is to help you think things through and share experiences—not to lecture you, instruct you, berate you, or dictate to you.
Even the most experienced and skilled actuary runs into sensitive and complex situations. If that ever happens to you or a colleague, remember that the ABCD stands ready to provide you “with a little help from your friends.”
ALBERT J. BEER, MAAA, FCAS, is a member of the Actuarial Board for Counseling and Discipline.
The Art of the Possible