Disciplinary Process Chris Daykin Usma, 17 July 2010

IAA Requirements An association must have a formal discipline process in place, including the following:  an accessible complaints process  due process of defence and member’s rights are fully respected  objective independent formal appeal process  sanctions available appropriate to offences  appropriate publicity to be given to results of process  information to be provided as necessary to other assns.

UKAP Disciplinary Scheme  Involvement of non-actuaries  Disciplinary Tribunal in public (previously private)  4 stage process

UKAP Partial Regulation  Members of Institute and Faculty of Actuaries may opt for ‘partial regulation’  if they are a member of an FMA of the IAA; and  they opt to be regulated by their other FMA  …then other FMA’s discipline scheme applies  …and other FMA’s CPD arrangements

UKAP Definition of ‘misconduct’  Breach of the Profession’s byelaws, or  Failure to comply with “the standards of behaviour, integrity, competence or professional judgement which other members of the public might reasonably expect of a member

4-stage process ….. first 3 stages ….. Allegation INVESTIGATING TEAM prepare case report ADJUDICATION PANEL private meeting Dismiss complaint Reprimand/Fine Direct retraining Refer to Tribunal

Disciplinary Scheme Tribunal Outcomes….. stage 4 = appeal TRIBUNAL public meeting Complaint dismissed End Professional misconduct Reprimand Direct retraining Withdraw Practising Certificate Suspend membership Expel Fine An APPEALS TRIBUNAL, meeting in public, can review findings of Professional Misconduct.

Stage 4 Appeal  Appeals Tribunal panel meets in public  The panel can: Uphold previous decision Revoke or vary previous decision

Recent Adjudication/Tribunal Panel cases  Exam cheating – exclusion from readmission to membership for up to 5 years  Failure to reply to Trustees in timely fashion and to comply with Guidance Note – reprimand and attendance at Professionalism Course  Using incorrect value of assets, not checking accuracy of data, not stating audited accounts not available – reprimand, attendance at Professionalism Course, £5,000 fine.  Breaches of PCS, ignoring order of DPB Committee, advising while not licensed, failing to pay fine – expulsion for 5 years and costs of £14,000  Equitable Life - expulsion

Complaints – 4 years to June 2008 by source of complaint  Member of the public 26  Member of the profession 16  Honorary Secretary 5  Trustee11  Pension regulator 2  Former employer 2  Pension Fund Manager 1  Other regulator 2  DPB Committee 1 TOTAL 66

Complaints – 4 years to June 2008 by practice area  Pensions 45  Life insurance 11  General insurance2  Investment consulting3  Student 5 TOTAL 66

Implications  More complaints likely in future  Don’t panic  Take advice Senior actuarial colleague Lawyer The profession Also, see UKAP website under Professional Conduct  Actions to pre-empt …

Actions You Need To Take Communicate well – respond promptly Maintain audit trail (documentation) of all actuarial work Adhere at all times to the Code of Conduct Adhere to any relevant Standards/Guidance Notes Keep up-to-date with professional matters Keep up-to-date with regulation, and comply with it Have your work peer reviewed Complete CPD each year Be courteous in your dealings at all times

Life-long learning and Continuing Professional Development (CPD) Chris Daykin Usma, 17 July 2010

Competence  Competence is a principle of all the Codes  initial qualification and acquisition of credential  life-long learning is, however, a necessity  Continuing Professional Development (CPD) is the formal mechanism whereby the profession monitors life-long learning

Continuing Professional Development Formally defined as: The maintenance, improvement and broadening of knowledge and skill and the development of the personal and professional qualities needed throughout an actuary’s working life.

CPD – IAA & GC requirements  IAA has published CPD strategy (June 2007)  Groupe Consultatif revised strategy (Sept 2008)  emphasis on life-long learning  importance of being up-to-date for competence  associations should set CPD requirements  include interaction with other firms  …and professionalism component

CPD Scheme (UK Actuarial Profession)  Effective 1 July 2010  All actuaries must comply (UK and non-UK)  non-UK actuaries can opt to be regulated by the local actuarial association where they work  in that case local CPD requirements apply  Flexible – design programme to meet own needs  See actuaries.org.uk website for CPD Handbook

Objectives of the CPD Requirements  To ensure actuaries develop and maintain the professional skills they need  To ensure that others can confidently trust they have done so The Profession may require specific learning on designated topics

Categories of actuary in CPD Scheme Category 1 – holding a UK Practising Certificate Category 2 – all other members in paid work

CPD – Category 1 Requiring practising certificate (PC)  No fewer than 30 hours of “verifiable” activities, of which  at least 20 hours should be technically relevant to the subject area of the PC and at least 10 hours of that should be external  at least 6 hours must relate to professional skills  Up to 15 hours can be for ‘service to the profession’  All PC holders are required to attend a Professionalism Event at least once every ten years  Reporting year runs from date of last PC renewal

CPD – Category 2 All other members in paid work  15 hours “private study” or “attendance at events”  total increases if less than 10 hours events  at least 5 hours must be at events  up to 8 hours for service to the profession (counting as attendance at events)  attend a professionalism event every 10 years  CPD should comprise mixture of skills which are technically and professionally relevant to the member’s particular role

“Verifiable” CPD Activity or outcome is observable by others Examples  Attending sessional meetings of the profession  Attending public, formal events, e.g. conferences  Studying course for an exam (if it is passed)  Preparing and delivering learning to colleagues  Preparing material published in public domain  Acting as an examiner or assistant examiner

Record-keeping for members of UKAP  Everyone must record CPD in appropriate format each year  … in members’ section of Profession’s website … and  … keep supporting evidence for 3 years  CPD records subject to scrutiny by the Profession  CPD record form covers: technical, professional skills, other personal development  Reliance on Members’ integrity to comply  Possibility of counselling or disciplinary action if don’t comply  Make sure your records are up-to-date !

CPD Handbook The range of skills you need  3 categories of skills  professionalism,  business and management, and  technical  You need a full range of skills and knowledge to perform effectively and efficiently  You decide the mix The Handbook describes the skills

CPD – making it live  the CPD scheme or requirements are formal  real CPD requires your active participation  learning about something to write or speak is more effective than just sitting listening  make sure you continually develop yourself

Challenges facing the profession Chris Daykin Usma, 17 July 2010

What could go wrong for the profession - What if? Problems which could lead to criticism of actuaries oany insurance company getting into financial difficulties oactuaries only looking after interests of shareholders omis-selling of insurance contracts oshortcomings in social security reform olife products which are not understood by customers ounder-reserving oSolvency II What external influences could affect the profession’s reputation adversely in the future? Specifically, what could go wrong for the profession in the Baltic countries?

How can the profession serve the public interest? What does it mean to serve the public interest? How does the profession meet the IAA vision …for the well being of society as a whole? What is in the public interest? What topics should the profession cover? How should these topics be handled?

How can we strengthen the profession in our region? What should be done to strengthen the profession? What should be the role of the Groupe? How can we increase the profession’s influence? How can we grow the profession? What other areas should actuaries be active in?

How can we expand into new areas of activity? What is the core skill set of actuaries? Where might we expect to see these skills used? How do we raise awareness of actuarial skills? How can we increase our influence in new areas? Are there implications for the education process? … should the profession be doing more?