The Professionalism Education Working Group often gets asked to clarify if the Code of Professional Conduct and the Actuarial Standards of Practice (ASOPs) apply to various scenarios. While the articles we write pose scenarios as they apply to credentialed actuaries, we feel that these could apply to anyone doing work of an actuarial nature, regardless of whether they intend to become credentialed.

To make this truly a learning and professionalism experience, we want your feedback. You can send your comments and questions to ar@casact.org.

Last year in the AR May/June 2023 issue (“The Actuary’s Guide to the Code of Professional Conduct (Part 1),” we discussed the disciplinary process of the American Academy of Actuaries (AAA) and how the Actuarial Board for Counseling and Discipline (ABCD), which is housed at the Academy, works with the CAS to issue a disciplinary recommendation. However, the bulk of the ABCD’s work does not involve complaints or cases that result in disciplinary recommendations; more commonly, they involve inquiries from actuaries seeking counseling services. The ABCD refers to these counseling services as “Requests for Guidance.”

What are the professional standards that are the subject of most counseling inquiries? Before you keep reading, think of an instance in your career where you thought that professional standards might have been violated or stretched, even if you found later that they had not. What professional standards would come into play? We’ll give you a minute.

What do you think are the top reasons that the ABCD is contacted for guidance?

One of the top reasons involves questions about qualification standards. Precept 2 of the Code of Professional Conduct (the Code) states (emphasis added):

An Actuary shall perform Actuarial Services only when the Actuary is qualified to do so on the basis of basic and continuing education and experience, and only when the Actuary satisfies applicable qualification standards.

ANNOTATION 2-1. It is the professional responsibility of an Actuary to observe applicable qualification standards that have been promulgated by a Recognized Actuarial Organization for the jurisdictions in which the Actuary renders Actuarial Services and to keep current regarding changes in these standards.

These questions come from both new Associates and very experienced actuaries. They want to determine if they are qualified to complete an Actuarial Service. If not, what do they need to do to become qualified?

After connecting with the ABCD,  the inquiring actuary and ABCD member will review the U.S. Qualification Standard together and come up with an interpretation that they agree on. The inquiring actuary will then decide on what course of action to take.

Another reason actuaries ask for consultation is to interpret the Code and ASOPs. We have all read the Code and an ASOP or two. They are written to be advisory and not prescriptive. This means that they are open to interpretation. An ABCD member can consult with you to provide professional guidance as it relates to your circumstances.

Inquiring actuaries often ask about interpretation of Precept 3 — Standards of Practice:

An Actuary shall ensure that Actuarial Services performed by or under the direction of the Actuary satisfy applicable standards of practice.

ANNOTATION 3-2. Where a question arises with regard to the applicability of a standard of practice, or where no applicable standard exists, an Actuary shall utilize professional judgment, taking into account generally accepted actuarial principles and practices.

ANNOTATION 3-3. When an Actuary uses procedures that depart materially from those set forth in an applicable standard of practice, the Actuary must be prepared to justify the use of such procedures.

The ASOPs that actuaries most commonly ask for interpretation on are ASOP 23 on Data Quality and ASOP 41 on Actuarial Communications.

Precept 13, which relates to potential violations of the Code, is another item that is often a topic for interpretation and guidance. Why would this be? Well, it’s not easy to report another actuary, colleague or friend. We may ask ourselves, “Am I overreacting or misinterpreting the situation? What are my obligations to my profession? How do I determine what my next step is?” We don’t deal well with a lack of resolution. We are trained to find and resolve problems, but we may not have any experience with finding what we think is a violation by another actuary. Do we need to file a complaint, or is there another way to resolve this?

We are trained to find and resolve problems, but we may not have any experience with finding what we think is a violation by another actuary.

Precept 1, which relates to professional integrity, is often a topic for interpretation and guidance and comes into play in most, if not all, professional issues. How do we determine if we are satisfying the skill and care requirement (Annotation 1-1)? Am I doing my work adequately and with competence?

How can you submit an inquiry?

The ABCD will respond to actuaries’ requests for guidance on professional issues. But how do you submit an inquiry? There are two general avenues to submit an inquiry for guidance. They are:

• By email: guidance@abcdboard.org (the preferred way), and
• By phone: (202) 785-7885.

What information do you have to provide?

There is not an official form or paperwork that you must fill out. While submitting an inquiry, you may include as little or as much information as you want. At minimum, you should include your name and how you would like to be contacted. Know that your submission for guidance will be strictly confidential, and even if you are explaining a potential violation by another actuary, they will not be contacted unless the ABCD receives confirmation from the requester that they want to file a complaint. Based on your inquiry type, a member of the ABCD will then be assigned, and you will have the opportunity to explain your situation or question in more detail.

On some rare occasions, you may submit a “tip” to the ABCD, which means you have some information that you would like ABCD to know and review; however, you do not wish to be contacted on this matter. These types of inquiries usually cannot move forward unless the alleged infringement has sufficient independent evidence, so then the ABCD will perform further review or fact finding.

A submission for guidance does not always have to be a real scenario. For example, you may submit a request for guidance explaining a potential violation without disclosing identifiable details such as the suspected company or the name of the actuary. The ABCD will assist you in interpreting the Code or the appropriate ASOPs. The ABCD will also help you identify areas of the Code or ASOPs that may be relevant to your specific scenario.

Can anyone use the ABCD’s counseling services?

Are counseling services available to anyone? Can regulators, clients or employers contact the ABCD if they have questions?

The short answer is no. You must be a member of at least one of the five actuarial organizations or be in the process of joining one of the organizations. The five qualifying organizations are the American Academy of Actuaries, the Casualty Actuarial Society, the Society of Actuaries, the Conference of Consulting Actuaries and the American Society of Enrolled Actuaries. For a regulator, client or employer to contact the ABCD, they would have to meet this criterion.

How do you deal with alleged actuarial impostors?

Suppose someone you have met is providing actuarial services and claiming to be an actuary. They tell people they are credentialed and even list their actuarial initials in their email signatures. But you suspect that they are not actually qualified. They have not completed the educational requirements, have not kept up on their continuing education requirements for years, or are not a member of one of the five qualifying organizations. They are in effect impersonating an actuary and may be fraudulently providing actuarial services to their principal through deception.

Can ABCD take action against them? The answer is no. The ABCD’s jurisdiction only extends to current members of the five qualifying organizations. If they aren’t a current member, the ABCD can notify the associated actuarial organization, which, in turn, could choose to send a cease and desist letter or take other actions.

What happens after you contact the ABCD for counseling?

When you contact the ABCD for counseling, you will be matched to an ABCD member who is best qualified to discuss your situation. There isn’t a formal triage process, but there are two CAS members who can handle P&C-specific requests. However, most of the questions can be answered by all members.

What is at the end of an inquiry?

In the article on the ABCD’s disciplinary function, we noted that the ABCD will render one of  four actions to the appropriate actuarial organization. They are: Private Reprimand, Public Reprimand, Suspension or Expulsion. However, for a request for guidance inquiry, all types of guidance are possible. In fact, it’s not possible to group them into major categories. Very often, there is not a final recommended action or opinion that will be formed, but instead, the ABCD will help the submitter form their own opinion and come up with their own plan for next steps. The ABCD will act mostly as a sounding board.

In closing, ABCD does not provide solutions, they provide guidance. Often, the strategy of ABCD members for inquiries is to have a sound discussion with the inquiring actuary and to let the actuary come up with their own conclusion.

Special thanks to Ed Lee from the American Academy of Actuaries for his help in reviewing and editing this article.