Professionalism: Ethics and More Ethics
Last month I attended the 42nd Annual Enrolled Actuaries meeting. While I attended a number of very informative and interesting sessions, there are two particular sessions that stand out in my mind: Ethics and More Ethics. Why are these sessions two of the most well attended sessions of the entire conference? I believe the reason is more than just to meet our professionalism and ethics requirements. It is also how we live our lives, both professionally and personally.
The Ethics and More Ethics sessions are conducted in the same manner. The moderators describe a scenario in which an enrolled actuary is confronted with an ethical dilemma typically involving a client or coworker. The expectation is that the audience will reach into their ethical foundation and be so affronted by an action described in the scenario that they will be compelled to express their opinion to the entire participating audience.
Once the scenario is read aloud, there is typically a brief period where the audience is reluctant to approach the microphone and speak their mind. During this brief moment the moderators encourage (and sometimes threaten) the audience until the first brave enrolled actuary steps forward. Once the discussion begins, the flood gates of comments and opinions open up until the moderators insist we move onto another scenario.
ASOP 1 (Introductory Actuarial Standard of Practice) and ASOP 41 (Actuarial Communications) are the two most commonly cited ASOPs during these sessions by the audience. While most other ASOPs provide guidance for very specific areas of practice, ASOP 1 and ASOP 41 are applicable to what each of us does every day as actuaries. These ASOPs address more than our professional responsibilities, they can also invoke ethical and emotional responses. This is apparent during these discussions when there are many differing opinions voiced both at the microphone and from within the seated audience.
The ASOPs address these differences of opinions. The ASOPs allow for the actuary to use professional judgment when selecting methods and assumptions, conducting an analysis, and reaching a conclusion, and recognize that actuaries can reasonably reach different conclusions when faced with the same facts (ASOP 1 Section 3.1.4).
It often comes up during the discussions that an actuary needs to be careful how their work product is used. ASOP 41 addresses this issue by stating that the actuary needs to take into account the intended users. ASOP 41 Section 3.7 states: Responsibility to Other Users—An actuarial document may be used in a way that may influence persons who are not intended users. The actuary should recognize the risks of misquotation, misinterpretation, or other misuse of such a document and should take reasonable steps to ensure that the actuarial document is clear and presented fairly. To help prevent misuse, the actuary may include language in the actuarial document that limits its distribution to other users.
An actuary’s role is inherently objective. ASOP 1 Section 2.2 defines Actuarial Services as: Professional services provided… include the rendering of advice, recommendations, findings or opinions based on actuarial considerations. An actuary’s work should have Actuarial Soundness (ASOP 1 Section 2.3) and must be Reasonable (ASOP 1 Section 2.10).
ASOPs identify what should be considered, done, documented, and disclosed when rendering actuarial services (ASOP 1 Section 3.1) and are intended to provide guidance for dealing with commonly encountered situations (ASOP 1 Section 3.1.3). The intent is that this will guide actuaries most of the time. During other times, Actuaries should take a good faith approach in complying with ASOPs, exercising good judgment and professional integrity (ASOP 1 Section 4.2).
Many of the scenarios discussed at the ethic sessions set off our ethical warning alarms. We immediately know that something is not right. The purpose of the ASOPs are to guide us; to help us navigate through situations that makes us uncomfortable. After sitting through these sessions with fellow enrolled actuaries I know that I am in good, moral and ethical company and that I can rely upon my colleagues to do the right thing.
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