Institute of Actuaries of India Indian Actuarial Profession Serving the Cause of Public Interest Rishabh Prakash Ramnath Shenoy Indian Fellowship Seminar Case I4: Eavesdropping

Case Details Consultant to trustee of pension scheme Conducted a review of investment strategy Already discussed with investment committee: – 2 company (sponsor) appointed directors – Finance director – Human resources director Overhear a conversation on route – sketchy but source credible Deals with potential sale of most stable parts of the sponsor’s business 2

Issues posed What professional issues arise from the situation? How to deal with them? 3

Issues in light of Actuaries Code Integrity Discussion of information could amount to “rumour mongering” Sketchy information shouldn’t disseminate further Confidentiality of the information needs to be respected Competence and Care Information incomplete - the actuary heard bits of the conversation Information not credible – not formal communication, could be wrong But if true could have serious consequences on the fund 4

Issues in light of Actuaries Code Impartiality “Members will not allow bias, conflict of interest, or the undue influence of others to override their professional judgement “ The comments of the other actuary may amount to undue influence if the course of action is changed based on them 5

Issues in light of PCS Confidentiality “As a matter of law, information acquired by an actuary in the course of professional work is frequently confidential to the actuary’s client or the actuary’s firm. As such, it should not normally be disclosed unless consent has been obtained from the actuary’s client or the actuary’s firm, as the case may be” Need to understand the level of confidentiality in the information and respect it Standards for Advice “An actuary must consider the extent to which it is appropriate to carry out investigations to assess the accuracy and reasonableness of any data being used” May not be advisable to form any opinion based on this information Inappropriate to do any investigation without confirmation 6

Steps we would take Information not public may only be a rumour Cannot discuss openly Hence: – Won’t specifically broach the topic of the sell-off in the meeting – Go ahead and discuss findings of investment strategy review – Offer to make approach flexible by building in contingency scenarios – Build in sale of major parts of the business as a contingency scenario – Reiterate employer/ sponsor covenant If rumours gather steam: seek a meeting, confirm veracity of news, offer to overtly modify investment strategy 7

Institute of Actuaries of India Thank you Rishabh Prakash Ramnath Shenoy