President’s Message MARY D. MILLER
The Birth of Our Professionalism Structure
SINCE NOVEMBER, AS I HAVE HAD THE OPPORTUNITY TO TELL THE STORY of the U.S. actuarial
profession and the Academy’s first 50 years, it has become clear to me that no accounting can be complete
without discussing the birth of formal actuarial professionalism under the auspices of the Academy. Letters
from founding leaders and historical documents paint a compelling picture of the need for an organization
that would represent the interests of American actuaries from all practice areas, and in particular, for that
organization to be a steward of professional standards and a coordinated disciplinary process.
As we reflect on the origins of the Academy, it is also appropriate to consider the conditions that led to the creation of the
two autonomous professionalism bodies that are housed within the Academy—the Actuarial Standards Board (ASB) and the
Actuarial Board for Counseling and Discipline (ABCD). Taken
together, these two bodies are at the core of what makes the actuarial discipline a profession, and we are well served to remind
ourselves of how and why they were formed.
In its formative years of the 1970s and early 1980s, the Academy issued many stand-alone documents that provided guidance
specific to a single practice area. Thus in 1973 the Academy began promulgating Financial Reporting Recommendations and
Interpretations, which provided guidance in selecting actuarial
assumptions and methods for stock life insurance company
financial statements. Other sets of guidance were released to
assist casualty and pension actuaries in their work.
Because these guidelines were developed by independent
committees of the Academy, they lacked a consistent framework. Moreover, there was no overall mechanism for identifying
the need for new standards of practice, nor for coordinating
their development, review, and revision.
Recognizing the need for a centrally organized body charged
with such duties, the Academy in 1982 formed the Task Force on
Organizing Professional Standards of Practice. After testing the
efficacy of a central standards-setting body on an interim basis,
the Actuarial Standard Board was created via an amendment to
the Academy’s bylaws and a vote of the membership, effective
July 1, 1988. To date, the ASB has promulgated 49 actuarial standards of practice that address all areas of actuarial practice in
the United States, and it continues to proactively develop standards of practice that ensure the highest level of professional
consistency and integrity.
The desire to maintain and enforce professional integrity
was also the driving force behind the creation of the Actuarial
Board for Counseling and Discipline as the investigative body
for the U.S. actuarial profession. Bylaws of the Academy and the
other U.S.-based actuarial organizations historically included
sections that laid out how members could be disciplined for vio-
lations of that organization’s standards of conduct, which were
similar but had some differences. Because individuals were of-
ten members of multiple actuarial organizations, the absence
of uniform standards of conduct led to replication of time and
expense for the investigation of alleged violations. Further, re-
quirements of confidentiality generally precluded sharing of
investigative results among various organizations.
In an effort to make a consistent basis for the discipline pro-
cess across the U.S.-based actuarial profession, the Academy
again amended its bylaws and formed the Actuarial Board of
Counseling and Discipline, effecting January 1, 1992. Each of
the five U.S.-based actuarial organizations has delegated their
counseling function and consideration of alleged Code of Pro-
fessional Conduct violations to the ABCD.
A landmark discussion paper written by Jack Turnquist,
William Odell, and Robert Wilcox, Structural Framework of
U.S. Actuarial Professionalism, meditates on what it means to
be a profession:
The essential characteristic of a profession has come to be
expertise in the area where professional services are performed. This typically requires setting of selective standards
for admission to the profession, intellectual and practical
training to acquire professional competence, and an effective
means to test such competence. To ensure that professional
services are delivered in a manner generally expected of
professionals, it has become necessary to lay down canons of
professional performance and behavior in work situations,
as well as procedures for maintaining discipline.
These two bodies—the Actuarial Standards Board and the
Actuarial Board for Counseling and Discipline—are the heart
of our profession’s understanding of contemporary, ethical, and
professional actuarial practice in the United States and are fundamental to our self-governance and self-regulation. Their work
continues to strengthen the actuarial profession in the Academy’s 50th year and beyond.