Up to Code BY ROBERT J. RIETZ
Am I Qualified?
IF THE HEADLINE PIQUED YOUR INTEREST, you probably already
know that Precept 2 of the Code of Professional Conduct governs an
actuary’s qualification to provide actuarial services and that Precept 2
requires continuing education (CE): “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.”
Annotations 2-1 and 2-2 of the Code of
Professional Conduct elaborate further
on qualification requirements. Precept
(“… and only when the Actuary
satisfies applicable qualification standards”) in detail. That
topic was covered expertly by
Sheila Kalkunte in her article
that ran in the January/February issue of Contingencies,
“Which CE Requirement Ap-
plies to Me?”
Rather, I will highlight some as-
pects of CE requirements, including
those of the U.S. Qualification Standards
promulgated by the Academy. This is be-
cause actuaries appearing at a hearing of
the Actuarial Board for Counseling and
Discipline (ABCD) many times are some-
what fuzzy as to how they satisfied their
CE requirements. ABCD members also
have responded to requests for guidance
from actuaries who are unsure if they are
qualified to perform specific actuarial
services.
The first requirement of Precept 2
commonly is referred to as the “look
in the mirror” test. An actuary must be
qualified by basic education (exams or
equivalent), CE (more on that in a bit),
and experience. Precept 2 doesn’t define
experience, but the current U.S. Quali-
fication Standards describe experience
as “three years of responsible actuarial
experience, which is defined as work that
requires knowledge and skill in solving
actuarial problems.”
Actuaries who provide actuarial serv-
ices in more than one area of practice
should apply the look-in-the-mirror test
to each area in which they practice. They
also should read Section 2. 3 of the U.S.
Qualification Standards very carefully.
Case in Point
I’m a pension actuary. Let’s look at how
I might try to satisfy these requirements
for determining life insurance nonforfeiture values. I passed the Society
of Actuaries (SOA) fellowship exams
(check), engage in continuing education
each year (check), and have more than 30
years of responsible actuarial experience
(check). Can I perform actuarial services
involving life insurance nonforfeiture values? The answer is a resounding no! One
look in the mirror and I know that I’m not
qualified to provide that actuarial service.
I would have the same response on
a multiemployer pension plan assignment. Although I’m a pension actuary,
An actuary also must satisfy the second requirement of Precept 2, involving
“applicable qualification standards.”
This phrase refers to the revised U.S.
Qualification Standards, approved by
the Academy’s board of directors and
ISTOCK
