Affirmative Action and DEI

by C. K. “Stan” Khury and Robert J. Finger

The CAS DEI program claims many benefits, including, as provided on the CAS official website:

… creating an innovative and competitive membership that is able to relate to the multi-faceted issues facing today’s employers [of actuaries], building a broad array of backgrounds and talents to approach and solve business problems in the modern global economy, and creating a diverse membership reflective of the broader general population that recognize the full horizon of issues that are central to the success of our members, their employers and society as a whole.

Similarly, the goals given by advocates of race-based college admissions as submitted in the defendants’ briefs to the Supreme Court of the United States (SCOTUS), included: “training future leaders, acquiring new knowledge based on diverse outlooks, promoting a robust marketplace of ideas, and preparing engaged and productive citizens.” The case at hand is Students for Fair Admissions, Inc. v. President and Fellows of Harvard College. This case, decided in June 2023, considered race-based undergraduate admission programs at Harvard and University of North Carolina. Both race-based admissions policies and the CAS DEI program use similar overall strategies: They privilege individuals from underrepresented groups in various ways in order to achieve a purported greater purpose. We seek to apply the tests applied by SCOTUS to race-based college admission policies to the CAS DEI program. While this column is not a constitutional compliance analysis, we believe that the logic applied by SCOTUS in doing its work has direct relevance to what the CAS is doing in DEI and thus can be useful in judging the CAS DEI program.

We seek to apply the tests applied by SCOTUS to race-based college admission policies to the CAS DEI program.

The recent SCOTUS decision overturning race-based admission policies of institutions of higher learning affirmed the broad and unqualified sweep of the Equal Protection Clause of 14th Amendment to the U.S. Constitution, that all people are equal under the law. No state shall “deny to any person … the equal protection of the laws.” Affirmative Action programs such as race-based college admission policies have been permitted to exist only as limited temporary exceptions to the 14th Amendment. After an exhaustive review and analysis of race-based college admission policies, SCOTUS concluded that those policies do not meet the criteria that permitted their existence in the first place. Accordingly, race-based college admission policies were struck down.

The recent SCOTUS decision overturning race-based admission policies of institutions of higher learning affirmed the broad and unqualified sweep of the Equal Protection Clause of 14th Amendment

Although the SCOTUS opinion, among other things, cited six test criteria, due to space limitations, we focus on just four (text in quotations indicates language from the SCOTUS opinion):

Strict scrutiny. Strict scrutiny means that whatever the goals of race-based college admission policies may be, they must be sufficiently “coherent” to permit “meaningful judicial review” and measurement of progress. “While these are commendable goals, they are not sufficiently coherent for purposes of strict scrutiny[.]” or more specifically, “whether a particular mix of minority students produces ‘engaged and productive citizens’ or effectively ‘train[s] future leaders’ is standardless.” Thus, race-based college admissions do not meet the strict scrutiny test.

Meaningful connection between means and goals. SCOTUS sought to find a meaningful connection between race-based college admissions and the stated goals of Affirmative Action. The universities were unable to provide any such connection, either in their briefs or in oral argument. The policies were found to be amorphous. SCOTUS concluded that “respondents’ admissions programs fail to articulate a meaningful connection between the means they employ and the goals they pursue.”

Narrowly tailored policies. Exceptions to the 14th Amendment must be narrowly tailored. SCOTUS concluded that “respondents measure the racial composition of their classes using racial categories that are plainly overbroad (expressing, for example, no concern whether South Asian or East Asian students are adequately represented as ‘Asian’); arbitrary or undefined (the use of the category ‘Hispanic’); or underinclusive (no category at all for Middle Eastern students).” This classification system is ambiguous and, because of that, is not narrowly tailored.

No end point. Another criterion that permitted exceptions to the 14th Amendment to exist is an endpoint. “Respondents suggest that the end of race-based admissions programs will occur once meaningful representation and diversity are achieved on college campuses. Such measures of success amount to little more than comparing the racial breakdown of the incoming class and comparing it to some other metric, such as the racial makeup of the previous incoming class or the population in general, to see whether some proportional goal has been reached. The problem with this approach is well established: ‘[O]utright racial balancing’ is ‘patently unconstitutional.’”

SCOTUS listed and dealt with two other criteria: The policy cannot be used to do harm to those not favored by the policy and the policy cannot be used to “stereotype” those favored by the policy, that is, it must not assume that members of a particular group think alike. Space does not permit exploring them here. Suffice it to say, the court did not find a single criterion that was met by race-based, college admission policies.

It is now easy to see that the CAS goals of DEI are founded on similar thinking as race-based college admissions. To be sure, we also examined the contemporary literature on DEI and compiled a wide variety of stated goals of such programs and we find that the CAS goals are typical of the thinking on the subject, and do not present any particularly innovative elements that are specific to the CAS. Clearly, the CAS goals are not sufficiently coherent to meet the strict scrutiny test. Nor do they show any explicit connection between the actions the CAS has taken and the stated goals. They are broadly aimed and not narrowly tailored to the specific stated goals. And to date, the CAS has not indicated any end point to this program. That is, when will the CAS know that the objectives have been achieved?

Therefore, given the results of applying the SCOTUS tests to the CAS DEI program, we believe that the CAS needs to take a fresh look at what it is doing in DEI given the overwhelming rejection by SCOTUS of Affirmative Action programs that seek to treat different groups of the population differently, instead of according to the individual characteristics of each member of the group. In light of the overwhelming evidence of the incoherence of Affirmative Action programs as well to the CAS DEI program, it is incumbent upon the CAS to re-examine this issue in a new light and try again.

At a minimum, the CAS needs to examine its DEI program and (a) do away with anything that fails these tests and (b) strengthen the elements that would prevent the CAS from encouraging practices and policies that would ultimately fail these tests. Of particular note are the following:

• Rejecting a purely race-based scholarship program.
• Ceasing all attempts at changing the ratemaking principles through ersatz research aimed at demonstrating that an actuarially sound method can produce racially biased rates.
• Abandoning all programs that are premised on an assumption of “systemic racism.”
• Abandoning all attempts at classifying CAS members according to ambiguous classification schemes.
• Affirming or codifying that the same objective standards for credentialling are applicable to everyone regardless of race or ethnicity.
• Affirming or codifying in a tangible enforceable way that race and ethnicity are not suitable rating variables for casualty insurance.
• Abandoning all activities that are based on confusing correlation with causation.
• Abandoning all efforts to involve the CAS in any public policy issues. In other words, stick to our main mission of educating and credentialling actuaries and advancing actuarial science.

Such a new examination should serve the CAS well in that the CAS per force will emerge with a stronger posture with respect to DEI and avoid dividing its membership into various groupings that serve to enervate the common interests of CAS members.

K. “Stan” Khury, FCAS, is retired, a long-time volunteer and a past president of the CAS. Robert J. Finger, FCAS, JD, is retired and editor in chief of the Foundations of Casualty Actuarial Science (4th Edition).

DEI Increases Awareness of the Profession and Attracts Qualified Future Members; CAS Standards Remain High

by the CAS Diversity, Equity and Inclusion Committee

The Supreme Court ruled that universities cannot use race as a consideration in the admissions process. The CAS has never used race and will never use race as a consideration in the admissions process.

The CAS strategic approach to diversity, equity and inclusion (DEI) strives to promote equality of opportunity along the entire actuarial career path and foster a sense of belonging and community among members of all identities. By doing so, the CAS can attract more qualified candidates to our profession, which is important to advance casualty actuarial science. Many of the CAS DEI efforts are focused on increasing the awareness of actuarial science as a profession, an explicit purpose of our Mission Statement.

One reading of this opinion piece by Khury and Finger might give the impression that the CAS DEI policies do something other than what they actually do. For example, the CAS is not “attempting to change the ratemaking principles” or applying anything other than “objective standards for credentialling,” yet these bullets imply otherwise. Rather than debate the accuracy of each bullet point-by-point, readers interested in the topic are encouraged to visit https://www.casact.org/about/diversity-equity-inclusion to read about the specifics of CAS DEI efforts.

Two items in the bullet list of this opinion piece are aspects of the CAS DEI efforts that may benefit from further commentary — the support of scholarships and the collection of data.

One reading of this opinion piece by Khury and Finger might give the impression that the CAS DEI policies do something other than what they actually do. For example, the CAS is not “attempting to change the ratemaking principles” or applying anything other than “objective standards for credentialling . . . . ”

Regarding the scholarship program, the CAS and the Society of Actuaries have jointly offered a diversity exam reimbursement program for more than 11 years. The aim of this program is to attract, encourage and provide support for aspiring actuaries from underrepresented communities, ensuring equal opportunities and fostering a sense of belonging. Participating in this program helps the CAS attract qualified candidates to our pipeline that otherwise might go on to choose a field of study other than actuarial science.

Regarding the collection of data, understanding the demographics of our members and candidates helps the CAS to achieve greater insight, which can be used to make strategic decisions that further our goals. For example, knowing that women constitute 47% of employees in the fields of mathematics but only 35% of our exam candidates might imply there are opportunities to attract more potential members to our pipeline, and knowing that Asian members represent 25% of CAS volunteers but only 11% of committee chairs might imply there are opportunities to better identify and train potential future leaders. The CAS collects this information only to better understand the diversity of our membership and monitor the effectiveness of the CAS Diversity, Equity, and Inclusion activities. This information is not displayed publicly in the online membership directory, and the data will only be published in the aggregate. Providing demographic information to the CAS is optional, and no member or candidate is treated differently based on the demographic information they provide or choose not to provide; 80% of CAS members and 90% of current exam candidates have provided this information voluntarily.

Knowing that women constitute 47% of employees in the fields of mathematics but only 35% of our exam candidates might imply there are opportunities to attract more potential members to our pipeline … .

The CAS’s actions in the area of DEI are constantly evolving. The CAS included specific questions on the DEI strategy in the quinquennial survey that was distributed in October 2023. All CAS members are encouraged to express their thoughts through responding to that survey so that the CAS can best consider the viewpoints of the membership in total.

CAS Board Director Jason L. Russ, FCAS, leads the DEI Committee, the members of which include CAS Appointed Board Director Stephanie Espy; CAS Vice-President Marketing & Communications Kimberly W. Guerriero, FCAS; and CAS Fellows and Board Directors Amber M. Rohde, FCAS, and Erika Helen Schurr.