Contingencies Online - May/June 2010

Up to Code roGer HAyne And roBert rietZ
your comments, Please:
changing the disciplinary Process

THE TYPICAL uP TO CODE ARTICLE is one-way communication. The author develops a theme and then summarizes its main point at the end. The only effort required by the reader is, well, to read the article. We plan to take a different approach. We will describe an issue, pose a question or two, and then ask you to respond by letter or e-mail to Contingencies. In the next issue, we’ll discuss your responses.

balancing disclosure and Privacy The Actuarial Board for Counseling and Discipline (ABCD) operates with tension between providing due process to the actuary who is the subject of an inquiry and protecting the public (e.g., clients, stockholders, policyholders, plan participants, employers, taxpayers, etc.). Its current Rules of Procedure (available online at http://www.abcdboard.org/ publications/procedure/rules.pdf) provide the subject actuary with substantive due process, allowing him or her considerable opportunity to rebut a complaint.

If the ABCD determines that the subject actuary has materially violated the Code of Professional Conduct and recommends discipline, the bylaws of the subject actuary’s membership organization offer further due process during the discipline and appeals process (which can, and often does, take over a year).

One potential downside of this due process is that the subject actuary can continue to practice as an actuary, even if his or her actions may be harmful to the public. In some instances, the public may be relying on actuarial services that do not satisfy one or more precepts of the Code of Professional Conduct. Another potential downside is that the system can be manipulated by an actuary who repeatedly challenges procedures and requests delays, thereby further extending the process. Here’s the first question for you:

subject actuary who might be falsely
accused with the need to protect the
public? if not, which protection should
take priority over the other?
suspending discipline Pending
the outcome of litigation

Suppose that the subject actuary is involved in civil or criminal proceedings related to the basis of the complaint filed with the ABCD. In this instance, he or she can request that the ABCD suspend its process during the trial (and occasionally during appeals). The ABCD often grants such requests.

There are a couple of reasons that an actuary would request a suspension:

■ ■ He or she is not forced to attempt simultaneous defenses, which could affect the efficacy of either;

■ ■ There’s less potential for the
disciplinary process to affect any legal
proceedings.

the abCd process focuses on potential material violations of the Code of Professional Conduct, while criminal and civil proceedings focus on violation of the law or commission of a tort. under what circumstances, if any, should the disciplinary process be suspended pending the outcome of legal proceedings? if such circumstances exist, should the suspension continue while the subject actuary appeals a verdict?