When someone asks me if I can do something for them, I like to say “yes.” I want to be helpful, useful. That is true in my personal and professional life. But sometimes you have to say “no.” It could be because you don’t have the time, you don’t like to do what is requested—or it may be that you feel performing the request would be contrary to a belief or principle you hold dear. Perhaps it would mean you would violate a promise you made, such as adhering to a professional code of conduct.
I have worked in an insurance company and a consulting firm, and, in both of those settings, I’ve faced situations where I have said “no” to a request for various reasons including where fulfilling it may have resulted in a potential violation of the Code of Professional Conduct. As a member of the Actuarial Board for Counseling and Discipline (ABCD), I have seen other situations where a practicing actuary has had to consider saying “no” for similar reasons. In the paragraphs that follow, I provide examples of situations that actuaries can find themselves in that potentially may require them to say “no.” Whether an actuary gets to the point of saying “no” will depend on the specific facts and circumstances of their situation. These examples are merely intended to get the reader to think about how they might respond and be better prepared to handle them should they encounter them.
Pressure from a principal*
One of the most common scenarios—and one that’s difficult to contend with—is when the person for whom you are providing actuarial services wants you to change the outcome of your work to suit their preconceived view of where the results “need to be” in order to satisfy their objectives. They are less concerned with an appropriate answer than they are about how that answer might affect their other objectives. The actuary needs to perform their work with skill and care and be sure their work product will not be used to mislead or evade the law.
It is not uncommon for an actuary to be asked to perform services in an area where they have not done any past work. You may have been doing valuation work for a large health insurance company that has a small block of annuities. The person doing the valuation work for the annuities recently retired and you could be asked to take on that work. Or your company could be entering an entirely new market, such as pet insurance, and you’re asked to do the valuation work for it. In either case, it is important to ensure that you are qualified to do the work.
Conflict of Interest
A consultant is retained by a client to perform an analysis of their underwriting procedures and claims experience and to provide recommendations as to how the results could be improved. The consultant performs the requested analysis and among her recommendations is for the company to use a new data subscription service that provides prescription data. The client goes ahead and hires the subscription service. Because this is not the first time she has recommended this service, the data provider wants to develop a relationship with the consultant that provides her with a referral fee for every lead that she sends to them. She will have to consider the consequences of entering into such an arrangement for her future consulting work.
Principal does not give you all the information you require
You are performing valuation work on a block of life insurance policies based on current assumptions. The business was issued through two distribution systems that can be expected to have very different persistency experience. You ask the principal for the lapse experience split by distribution system, but the principal says they only have the data in aggregate, and that he thinks they are pretty similar. You do some testing and identify the reserves will vary significantly based on the lapse assumption. Will you be able to perform your valuation work with the information provided?
Principal wants to use work product in inappropriate ways
You produced a reserve adequacy report in support of a regulatory opinion. Your boss asks for a copy of the report several months after the filing of the regulatory reports. You ask what he wants it for and he says (confidentially) that the company is looking at reinsuring some of it business to a foreign reinsurer and wanted to see whether they could use your report to estimate the reserves they would have to hold in their company. What concerns would you have regarding the use of your report, and what would you tell your boss?
Being asked to use confidential information for another client
You are a consultant assisting companies in getting into a new jurisdiction that has a unique reserve and capital regime. After completing an assignment with Company A, one of its competitors approaches you to do a similar assignment. During the new assignment, the client asks what the results would look like if you used the assumptions from Company A’s analysis. What concerns would you have with using that set of assumptions? What obligations do you have to Company A?
Inappropriate time allowed for completion of the assignment
You are performing financial projections for the in-force business of an insurance company. This is a process that you perform twice a year as it takes a significant amount of time to update all of the models with current assumptions and in-force asset and liability data. Your boss comes to you a month before your model will be ready to produce its next round of results and asks you for an update of the prior projections with a new set of economic assumptions. You tell your boss that it would take a week or more to update all the models. He says he needs to projection in three days. Can you provide what your boss wants? What types of communication do you need to provide as part of it? Are there limits as to what you produce could be used for?
What Can I Do?
Now that we have identified several situations when saying “no” might be a consideration, what can you do to help you decide the right course of action? First and foremost is to be familiar with your responsibilities under the relevant requirements (e.g., the Code and the actuarial standards of practice [ASOPs]). Remember that an actuary is subject to the applicable rules of professional conduct or ethical standards that have been promulgated by a Recognized Actuarial Organization for the jurisdictions in which the actuary renders actuarial services. Actuarial services are considered to be rendered in the jurisdictions in which the actuary intends them to be used unless specified otherwise by an agreement between a Recognized Actuarial Organization for any such jurisdiction and the organizations that have adopted the Code. For actuarial services rendered in the U.S. by members of a U.S.-based actuarial organization, the relevant requirements are the Code of Professional Conduct and the ASOPs promulgated by the Actuarial Standards Board.
- The Code is available online at: https://www.actuary.org/content/code-professional-conduct.
- The ASOPS are available online at: http://www.actuarialstandardsboard.org/standards-of-practice/
You could reference your obligations to the code of conduct and the ASOPs in your response to the request and remind the principal that those elements of our profession help support the quality of work product that they rely on actuaries for.
Another course of action that could be useful is to talk with a person you trust, particularly an actuary who is not involved in the specific situation. Such people may be able to see things in a different way from people who are directly involved and help you talk through the issues you face.
Of course, you could always make a request for guidance to the ABCD. The ABCD has nine members from the major practice areas who have extensive practical experience. The ABCD receives scores of requests for guidance each year. It is possible that someone else has had to deal with an issue that is similar in nature to what you are dealing with and the ABCD might be able to provide some guidance on how to think through your specific situation.
- Requests for guidance can be sent to: firstname.lastname@example.org.
When working through ethical dilemmas, ask yourself:
- Am I being compliant?
- Have I been complete and transparent in my disclosures?
- Am I upholding the reputation of the profession?
- Is it the right thing to do?
There are times when saying “no” is the right thing to do. Be prepared by being familiar with your requirements—and when you become involved in a situation that may call for a “no,” reach out to a colleague, or the ABCD. Talking through the issue can be a big help.
WILLIAM HINES, MAAA, FSA, is a member of the Actuarial Board for Counseling and Discipline.