The Rules Are Your Friend

When I was learning to play golf, I first heard “the rules are your friend” when I complained about having to count two extra strokes after my ball bounced off the wall of a bunker and hit my foot. “No way,” I thought, until quite a bit later when I realized that while the rules sometimes irk me, they can … Read More

Affordable Virtue—Ethics for Pension Professionals

If the 1980s became known as the Decade of Greed, the 1990s could be called the Decade of Ethics. Many traditional professions and large corporations began efforts to promote business ethics. The Chicago Board of Trade required all futures traders to take ethics class. The actuarial profession created a unified body, the Actuarial Board for Counseling and Discipline (ABCD), for … Read More

We Need to Do Better

Most of the cases that come before the ABCD don’t involve dishonesty, fraud, intent to deceive, or other lack of integrity on the part of practicing actuaries. As a profession, we can be proud that such situations are rare. Neither do many cases involve an actuary failing to resist inappropriate pressure from an employer or client to modify actuarial conclusions. … Read More

Precept 13—A Snitch in Time

John was finishing attendance at a continuing education session. It had been a long session covering complex new material. John knew he needed credit for the session to stay current with qualification requirements. More important, he knew that if he mastered the material being presented he would increase his competence as a practicing actuary. Nevertheless, maintaining concentration for the entire … Read More

Mercy or Justice

The Actuarial Board for Counseling and Discipline (ABCD) was created in 1991, effective Jan. 1, 1992, through the addition of Article X to the Bylaws of the American Academy of Actuaries. The ABCD has now completed 15 full years of operation, and a review of its operations seems timely. The ABCD derives its authority from the five U.S.- based actuarial … Read More

The Case of the Careless Subordinates—Is an actuary responsible for the work performed by others under his control?

Richard Boggs recently found himself in an out-of-town conference room with his attorney, a court reporter, and nine members of the Actuarial Board for Counseling and Discipline (ABCD), along with the ABCD staff attorney. He had been the subject of a complaint by one of the clients of his own actuarial consulting firm, and after an investigation, the ABCD voted … Read More

An Ounce of Prevention—The First Step

Actuaries, like all professionals, are subject to possible public discipline by their profession if they fail to live up to its standards of conduct, qualification, or practice. Further, in our litigious society, they face an increasing risk of professional liability suits involving even the most spurious of claims of malpractice or professional negligence. Actuaries who stand accused in such cases … Read More

Qualified…or Not

The phone rings. Jean Johnson, a member of one of the U.S. actuarial organizations, is calling. She’s about to start an assignment and wants to discuss whether she’s qualified to proceed. She was referred to me in my role as chairperson of the ABCD to discuss her situation. Is she qualified. . . or not? One of the benefits that … Read More

The Look-in-the-Mirror Test

Precept 2 of the Code of Professional Conduct obligates us not to issue statements of actuarial opinion unless qualified to do so. Of course, the determination of “qualified” can be somewhat or completely subjective. The best gauge for this determination is often known as “the look-in-themirror test.” In other words, if you can look yourself in the eye and confidently … Read More

International Actuarial Standards of Practice—Suggestions or Requirements?

In June of 2006, the International Actuarial Association (IAA) formally adopted a series of seven International Actuarial Standards of Practice for actuaries to use when providing professional services under international financial reporting standards issued by the International Accounting Standards Board (IASB). The IAA standards were designated as practice guidelines, and bore the following explanatory statement on their covers: “Practice Guidelines … Read More