attempting to resolve a possible violation,
“the Actuary may be allowing substandard
actuarial work to stand unopposed. In a
worst case scenario, companies or governments relying on such substandard
work, as well as their customers, employees and citizens, would end up facing the
consequences of the actuarial profession’s
failure to adhere to all of the Precepts of
the Code.”[ 9]
Therefore, it is critical that actuaries find
a way to overcome their discomfort when
faced with a difficult discussion about a
potential violation of the Code. Again, it
is important to remember that actuaries,
faced with the same set of facts, may come
to different, but reasonable, conclusions.
As the Precept 13 paper suggests, “A key
to initiating such a discussion would be to
recognize that the conversation is about an
apparent violation of the Code. Therefore,
it would be prudent for the Actuary to approach a situation like this in an inquisitive,
rather than accusatory, style.”[ 10] That is,
in an effort to understand how the other
actuary reached their conclusion, it may be
best to start by asking how the work was
performed—for example, what methods
and assumptions were chosen. In some
cases, the paper suggests, “a letter of inquiry
pointing out any perceived problems and
asking for clarification” might be more
appropriate.[ 11] With a courteous inquiry,
the chance of reaching the preferred outcome—either the inquiring actuary gains
new knowledge that eliminates the concern,
or the responding actuary admits an error
and works to correct it—increases.
Precept 13 encourages, but does not require, the actuary to initiate a conversation
with an actuary believed to be violating the
Code. In some cases, the paper acknowledges, “the relationship between the two
Actuaries may be of such a nature that it
would be inappropriate or too confrontational to reasonably expect a discussion
to resolve the issue.”[ 12] The actuary may
decide for valid and recognized reasons not
to attempt the discussion, or the discussion
may not be successful. In such cases, the
actuary has the obligation to report the
potential violation to the ABCD, except
where so doing would be contrary to law
or divulge confidential information.
The key takeaway is that an actuary
has a professional obligation not to turn
a blind eye, a deaf ear, or a mute tongue
to an apparent material violation of the
Code. Doing so itself might be considered a
violation of Precept 13 and possibly Precept
1. (If you have reason to believe another
actuary is violating the Code and choose to
keep silent, are you really acting honestly,
with integrity, and in a manner to uphold
the reputation of the profession?)
When the Going Gets Tough:
Request for Guidance
When facing only minor disagreements with
or questions about another actuary’s work,
most actuaries can, with a little thought and
preparation, embark on a conversation on
their own. But what if you harbor doubts
about your conclusions, confidential information is involved, or some other circumstance leaves you wishing for a sounding
board before initiating the conversation? In
such a case, a confidential discussion with a
third party may prove invaluable.
Where can you find this third party? By
contacting the ABCD and taking advantage
of its request for guidance process. The first
thing to know is that requests for guidance
are confidential. Second, talking through the
issue with a third party—who may have had
experience dealing with a similar issue—may
help you clarify the issues and your approach.
Third, having no doubt engaged in several
difficult conversations in the course of their
ABCD duties, the ABCD member you speak
with may have some good advice on how to
approach such a conversation. Remember,
a request for guidance is only a phone call
or an email away.
Talk the Talk
Sometimes communication with other actuaries is easy. But there are other times when
it is difficult and can come at some personal
and professional expense. The goal of professionalism is to maintain the profession’s
commitment to high standards of conduct,
practice, and qualifications at all times.
The Code of Professional Conduct
requires actuaries to communicate with
courtesy and respect and in a timely fash-
ion—even in less-than-friendly situations.
Actuarial professionalism provides tools
such as the Code, the Precept 13 discussion
paper, and the ABCD request for guidance
process to help you approach the difficult
conversations that will inevitably arise in
the course of your actuarial career.
Communicating with other actuaries
in a manner characterized by honesty,
courtesy, and respect is vital. Having the
courage and integrity to conduct those
difficult conversations is critical for actuaries to carry out their responsibilities,
both to their profession and to the public.
So the next time you face a professional
situation in which the old adage about
not saying anything comes to mind, think
about the trust that we have earned from
the public—and then do what’s in the best
interest of our profession.
[ 1] ASOP No. 1, Section 3. 1. 4.
[ 2] The Roles of the Actuary in the Selection
and Application of Actuarial Models;
Committee on Professional
Responsibility; 2006; p. 6.
[ 3] ASOP No. 41, section 3. 2.
[ 4] Actuaries can also find guidance on
specific types of actuary-to-actuary
communications in the actuarial
standards of practice (ASOPs). Precept
4 of the Code states that an actuary
should “take appropriate steps” to
ensure that his or her actuarial
communications satisfy “applicable
standards of practice.” We will not delve
into all of the scenarios where ASOPs
deal with actuary-to-actuary
communications, such as those
described in ASOP No. 21, which deals
with the obligations of “reviewing
actuaries” and “responding actuaries”
in the context of audits and financial
examinations. Suffice it to say that the
guidance in ASOPs reinforces the idea
that courteous, respectful, and timely
communications between actuaries are
critical to the quality of the actuarial
services being delivered.
[ 5] Academy Discipline Notice: www.
[ 6] For a detailed discussion of Precept 10
with more examples, see “Up to Code:
Living with Precept 10”; Contingencies;
[ 7] Contingencies; May/June 2014; p. 20.
[ 8] The Application of Precept 13 of the Code
of Professional Conduct, p. 21.
[ 9] Ibid.
[ 10] Ibid.; p. 9.
[ 11] Ibid.; p. 10.
[ 12] Ibid.