1. PROFESSIONALISM: OVERVIEW, TOPICS, DISCUSSION
AFA ANNUAL WORKSHOP MAY 23, SESSION XX
PROFESSIONALISM: OVERVIEW, TOPICS, DISCUSSION
Welcome.
Good morning.
Please take a seat at one of the tables with a Table #.
The next two slides are housekeeping --- don’t bother to take notes!
AFA May, 2018

2. DISCUSSION LEADER Jay M. Jaffe, FSA, MAAA
President, Actuarial Enterprises, Ltd.
AFA May, 2018

3. SOCIETY OF ACTUARIES Antitrust Compliance Guidelines
Active participation in the Society of Actuaries is an important aspect of membership. While the positive contributions of professional societies and associations are well-recognized and encouraged, association activities are vulnerable to close antitrust scrutiny. By their very nature, associations bring together industry competitors and other market participants.
The United States antitrust laws aim to protect consumers by preserving the free economy and prohibiting anti-competitive business practices; they promote competition. There are both state and federal antitrust laws, although state antitrust laws closely follow federal law. The Sherman Act, is the primary U.S. antitrust law pertaining to association activities. The Sherman Act prohibits every contract, combination or conspiracy that places an unreasonable restraint on trade. There are, however, some activities that are illegal under all circumstances, such as price fixing, market allocation and collusive bidding.
There is no safe harbor under the antitrust law for professional association activities. Therefore, association meeting participants should refrain from discussing any activity that could potentially be construed as having an anti-competitive effect. Discussions relating to product or service pricing, market allocations, membership restrictions, product standardization or other conditions on trade could arguably be perceived as a restraint on trade and may expose the SOA and its members to antitrust enforcement procedures.
While participating in all SOA in person meetings, webinars, teleconferences or side discussions, you should avoid discussing competitively sensitive information with competitors and follow these guidelines:
Do not discuss prices for services or products or anything else that might affect prices
Do not discuss what you or other entities plan to do in a particular geographic or product markets or with particular customers.
Do not speak on behalf of the SOA or any of its committees unless specifically authorized to do so.
Do leave a meeting where any anticompetitive pricing or market allocation discussion occurs.
Do alert SOA staff and/or legal counsel to any concerning discussions
Do consult with legal counsel before raising any matter or making a statement that may involve competitively sensitive information.
Adherence to these guidelines involves not only avoidance of antitrust violations, but avoidance of behavior which might be so construed. These guidelines only provide an overview of prohibited activities. SOA legal counsel reviews meeting agenda and materials as deemed appropriate and any discussion that departs from the formal agenda should be scrutinized carefully. Antitrust compliance is everyone’s responsibility; however, please seek legal counsel if you have any questions or concerns.
AFA May, 2018

4. Presentation Disclaimer
Presentations are intended for educational purposes only and do not replace independent professional judgment.  Statements of fact and opinions expressed are those of the participants individually and, unless expressly stated to the contrary, are not the opinion or position of the Society of Actuaries, its cosponsors or its committees.  The Society of Actuaries does not endorse or approve, and assumes no responsibility for, the content, accuracy or completeness of the information presented.  Attendees should note that the sessions are audio-recorded and may be published in various media, including print, audio and video formats without further notice.
AFA May, 2018

5. BACKGROUND 3rd presentation in last 7 months
Each time about 1/3 of the content changes
Input from prior presentations included in this material:
SOA 10/17 Annual Meeting
CAA (Elliot Chanen) 3/18
AFA May, 2018

6. AFA May, 2018

7. SESSION BROAD OBJECTIVES
An interactive discussion about professionalism
Meet CE requirement
Expand your professionalism perspective
AFA May, 2018

8. SESSION GENERAL AGENDA
Overview:
The concept of professionalism
Discuss CE requirements/value
Topics:
professionalism
COI’s (conflicts of interest NOT cost of insurance)
Fraternal professionalism
Inflection points
AFA May, 2018

9. WRAP UP DISCUSSION (Time Permitting)
Potential feedback to SOA about CE
Meeting professionalism CE requirement:
What areas of professionalism should be emphasized?
How best to discuss and/or teach professionalism?
AFA May, 2018

10. THE PLAN FOR EACH TOPIC Introduction (Jay)
5 discussions (You, the audience)
Reaction to discussion (All of us)
AFA May, 2018

11. 2 RECORDERS NEEDED #1 #2 #3
The recorder will take notes of the table discussion.
The recorder or someone else will present the table’s thoughts to the entire group. Because of the size of the audience, we’ll only hear from 2 groups per topic unless a group has a major comment to make about the topic.
The recorder should also remind the group that the program has been modeled on the concept of a “speed dating” event and we want to move quickly to get through the entire agenda.
When the recorder returns to his or her office, I’d appreciate receiving a summary of your table’s discussion so that I can summarize the comments and convey them to the appropriate person at the SOA as input from members about professionalism.
AFA May, 2018

12. THE MEANING OF PROFESSIONAL AND PROFESSIONALISM
Chris Daykin
“Professionalism and Trust”
Chris was the UK government actuary for nearly 20 years.
Widely respected.
He has been a deep thinker about actuarial practice topics.
I’d describe Chris as a “good guy” and definitely someone with whom you’d enjoy having drinks and dinner.
AFA May, 2018

13. WHY START WITH THIS SESSION WITH A DISCUSSION OF PROFESSIONAL AND PROFESSIONALISM? Answer: to establish a common knowledge base
AFA May, 2018

14. ELEMENTS OF A PROFESSION
A skilled intellectual technique
A voluntary association bound by a code of conduct
A formalized mode of enforcing the code of conduct upon the membership
AFA May, 2018

15. 10 DISTINGUISHING FEATURES OF A PROFESSION
Advanced educational requirements
Accreditation of the educational standard by a professional body
Requiring work experience in a professional context
Professional code of conduct
Written standards of practice
AFA May, 2018

16. 10 DISTINGUISHING FEATURES OF A PROFESSION
6. Collective responsibility for maintenance of competence and standards 7. Requirement to remain a member in good standing 8. Continuing professional development requirements 9. A comprehensive discipline process 10. The possibility of a common voice to participate in public debate
AFA May, 2018

17. THE BENEFITS TO THE PUBLIC OF PROFESSIONS
Quality assurance:
Education
CE and professional development
Professional norms and standards of practice
Degree of consistency in professional advice
Availability of the professional service
Fiduciary responsibility between professionals and their clients
3rd parties being able to lay a complaint and seek redress
AFA May, 2018

18. A PROFESSIONAL’S FIDUCIARY RELATIONSHIP
Mutual trust between a client and professional
No material info withheld by client
Client trust in a professional because of education and membership in a professional body
Tailoring advice to a client’s needs and in accordance with professional standards
Remuneration is fee based and all other relevant interests are disclosed
AFA May, 2018

19. Someone who follows the principles of his or her profession
PROFESSIONAL
Someone who follows the principles of
his or her profession
AFA May, 2018

20. ARE SOA, CAS, CCA, ASPA AND MAAA MEMBERS PROFESSIONALS?
YES
AFA May, 2018

21. WHY CE? CE is necessary regardless of any requirements
Professionals need to be prepared for change and innovation --- staying current is a must: hence, CE
Reviewing CE related materials may look different now as compared to the last time you read the document
Change and innovation stimulation is often found in non-actuarial meetings and publications --- consider a broader definition of CE
Engage with actuaries outside of your environment (international, other specialists, volunteer, etc.) --- not only to establish personal contacts but for cross-fertilization of professionalism
AFA May, 2018

22. TIPS FOR YOUNGER ACTUARIES
A new or aspiring SOA member’s responsibility for CE should be communicated earlier rather than later in the accreditation process
Ingrain CE into the actuarial DNA
Know and understand both professional association and employer discipline options
AFA May, 2018

23. DISCUSSION TOPIC #1: CE Should the actuarial profession require CE?
Should professionalism CE be required?
If CE were NO longer required, how would you maintain your actuarial and professionalism skills?
If CE continues to be required, what improvements to the present SOA system would you recommend?
It may turn out that you get more from this session during the table discussions than from my remarks. If so, my feelings won’t be hurt. In fact, as noted earlier, this is the goal of the session.
You won’t have time for all of the discussion topics. I’ve usually highlighted one of the topics but if your table would prefer to concentrate on any of the non-highlighted topics, definitely do so.
AFA May, 2018

24. AFA May, 2018

25. A BRIEF HISTORY OF PROFESSIONAL COMMUNICATIONS
AFA May, 2018

26. EMAIL PROFESSIONALISM: 16 REMINDERS*
Use a clear, direct subject line
Use a professional address
Think twice before hitting “reply all”
Include a signature block
Use professional salutations
Use exclamation points sparingly
Be cautious with humor
*Inc.com, 2/2/16
AFA May, 2018

27. EMAIL PROFESSIONALISM: 16 REMINDERS
8. Know that people from different cultures speak and write differently 9. Reply on a timely basis to all s 10. Proofread/spellcheck every message 11. Add the recipient(s) address last 12. Double-check the recipients 13. Use classic fonts 14. Monitor your language
AFA May, 2018

28. EMAIL PROFESSIONALISM: 16 REMINDERS
15. NO S, TWEETS, OR OTHER ELECTRONIC COMMUNICATIONS ARE CONFIDENTIAL!
AFA May, 2018

29. EMAIL PROFESSIONALSIM: 16 REMINDERS
16. S ARE PERMANENT!
AFA May, 2018

30. OTHER WARNINGS
Become familiar with and follow your employer’s protocols
Keep your private communications on non-business devices
If you mess up, immediately notify unintended recipients
Review ASOP #41 (Communications) which covers all communications such as s but also verbal interchanges
AFA May, 2018

31. MORE ABOUT S
s are probably always discoverable communications.
If an is to be confidential, see your lawyer before sending.
Carefully use “bcc” and “reply to all.”
AFA May, 2018

32. WHAT’S DISCOVERABLE?
The short answer is everything --- even phone messages!
Time may dampen memories but NOT obscure electronic communications
Electronic communications provide an accurate picture of “what you were thinking”
AFA May, 2018

33. and your s!
AFA May, 2018

34. BIG BROTHER AND YOUR OPPONENT’S ATTORNEY ARE WATCHING YOUR EMAILS
Assume all are discoverable
Be careful what you put in an ; the things that you think are funny today may not seem funny to a jury five years from now.
If you would be embarrassed to see your published in the New York Times, don’t press “send.”
Employees have no privacy rights in s sent on corporate computers.
AFA May, 2018

35. SOCIAL MEDIA
AFA May, 2018

36. ACTUARIES’ EMAIL THOUGHTS*
Provide context and caveats even when they are not required. For example: “This is an of my full opinion. Please contact me for more information.”
Consider the appropriate level of formality or informality that is appropriate for a particular .
Don’t become someone who opens SPAM!
Avoid multiple topics in a single and chains.
Color coding (such as yellow for a question) may help to increase readability and clarity of an .
Use personal conversations, phone calls, etc. for sensitive matters r/t .
Avoid negativity in s.
Respond, respond, respond!
*Discussion at SOA 2017 Annual Meeting
AFA May, 2018

37. TEXTING AND PROFESSIONAL COMMUNICATIONS
AFA May, 2018

38. DISCUSSION TOPIC #2: EMAIL
preservation/discovery?
Any electronic or clear professional communication tips to pass along to the group?
AFA May, 2018

39. CONFLICTS OF INTEREST
In a second you’ll see the connection between this slide and conflicts of interest.
AFA May, 2018

40. CONFLICT OF INTEREST
A situation in which a person or organization is involved in multiple interests, financial or otherwise, one of which could possibly corrupt the motivation or decision-making of that individual or organization (Wikipedia)
AFA May, 2018

41. HARVARD MEDICAL SCHOOL (HMS)
HMS is about a mile and a half from the Hynes Convention Center.
It has recently wrestled with conflicts of interest and offers an example of how another body and professional group has addressed conflicts of interest.
AFA May, 2018

42. HMS CONFLICT OF INTEREST (COI*) POLICY INTENTS
Reduce research risks
Maintain public trust
Identify conflicts
Manage conflicts
*COI is not Cost of Insurance!
AFA May, 2018

43. HMS PRESUMPTIVELY PROHIBITED ACTIVITIES*
Faculty may not have financial interest exceeding de minimis thresholds
De minimis income defined as <$25,000 from research activity
Faculty who serve in a fiduciary role to a for-profit business may not receive sponsored research support from the business
Faculty are prohibited from soliciting or accepting any industry sponsored gifts, meals or travel
*Harvard University Faculty of Medicine Policy on Conflicts of Interest and Commitment, updated 5/16
AFA May, 2018

44. JOURNAL OF THE AMERICAN MEDICAL ASSOCATION (JAMA)
May 2, 2017 Issue (v. 317, #17) devoted to Conflicts of Interest
About 30 articles!
Wide range of COI topics (> the obvious COI issues)
Recognition of a major area of concern for professionals
AFA May, 2018

45. SOA VOLUNTEER COI DISCLOSURE
I affirm that the following are all my (including anyone with whom I directly share income) material business, financial and organizational interests and affiliations which are or could be construed to be reasonably related to the interests, activities and programs of the Society of Actuaries.*
* Also refer to Explanation of COI Policy
AFA May, 2018

46. DEALING WITH CONFLICTS OF INTEREST
Disclosure is a must
Do it upfront
Put it in writing
Recusal is an option
After-the-fact realization is too late --- avoid the problem in the first place!
AFA May, 2018

47. PRACTICAL COI QUESTIONS
What if I’m not sure if I have a conflict of interest? Who can help me?
Where can I find the actuarial professional guidelines for COI’s at the start of my career and avoid any COI issues?
AFA May, 2018

48. DISCUSSION TOPIC #3: CONFLICTS OF INTEREST
Do you see any COI’s (or potential COI’s) in your work?
For example, as the Valuation Actuary for an insurance company, do or could you have a conflict of interest such as:
A financial interest in the insurer;
A bonus dependent on earnings
How to avoid or handle COI’s?
Would it be helpful for the actuarial profession to have more definitive and broader COI guidelines?
AFA May, 2018

49. ARE FRATERNAL ACTUARIES A SPECIAL CASE?
AFA May, 2018

50. ARE FRATERNAL ACTUARIES A SPECIAL CASE? --- MAYBE NOT
Scope section of some ASOP’s specifically includes fraternal actuaries
Understand which ASOP’s apply or don’t apply to fraternal actuaries
AFA May, 2018

51. ARE FRATERNAL ACTUARIES A SPECIAL CASE? --- MAYBE YES
Fraternal companies are different!
Authorized by a specific model act
IRC §501(c)(8)
Obligations to members:
Know your fraternal association’s special member obligations
Consider any such obligations when performing your actuarial duties
AFA May, 2018

52. FRATERNAL BENEFIT SOCIETY*
No capital stock
Not for profit
Conducts itself solely for the benefit of its members
*Uniform Fraternal Code
AFA May, 2018

53. AN IRC §501(C)(8) ORGANIZATION
Requires a fraternal purpose
Operate under a lodge system
Provides for the payment of life, sick, accident or other benefits
AFA May, 2018

54. National Union v. Marlow
374 F. 775, 778 (8th Cir. 1896)
A fraternal-beneficial society would be one whose members have adopted the same, or a very similar calling, avocation, or profession, or who are working in union to accomplish some worthy object, and who for that reason have banded themselves together as an association or society to aid and assist one another, and to promote the common cause.
AFA May, 2018

55. GIVEN WHAT YOU NOW KNOW, ARE FRATERNAL ACTUARIES (OR CONSULTANTS TO FRATERNAL ASSOCIATIONS) A SPECIAL CASE? IF “YES,” WHAT ARE THE IMPLICATIONS?
AFA May, 2018

56. AN “ACTUAL” SITUATION: PREMIUM INCREASES
Facts at Fraternal Association ABC:
A small block of health type business
Inadequate premiums
Business concentrated in a few states
AFA May, 2018

57. AN “ACTUAL” SITUATION: PREMIUM INCREASES
Actuarial professionalism related topics:
Ensuring that there is equity between members covered and not covered by the underpriced product
Achieving the fraternal association’s purpose
Maintaining the reputational risk of both the fraternal association and the individual actuary
AFA May, 2018

58. DISCUSSION TOPIC #4: FRATERNAL PREMIUM INCREASES
The fraternal association’s actuary determines that that a rate increase is appropriate
QUESTIONS:
What are a fraternal association actuary’s responsibilities?
How can a fraternal association actuary measure if equity is achieved?
Are there any other options other than implement or not implement a rate increase?
AFA May, 2018

59. PROFESSIONAL INFLECTION POINTS
AFA May, 2018

60. INFLECTION POINTS DEFINED
Decisive moments that mark the start of significant change. The term comes from math, where it describes the point at which a convex (upward) curve turns concave (downward) or vice versa.
AFA May, 2018

61. THINGS THAT CAN GET YOU IN TROUBLE
The usual ones: lying, stealing, cheating, moral turpitude*, etc.
Doing stupid things
Inaction once something happens
Inadequate documentation
Poor communications
Missing deadlines
Gross errors
Failing to report misconduct by another actuary
*Legal Definition of moral turpitude: (a) an act or behavior that gravely violates the sentiment or accepted standard of the community and/or (b) a quality of dishonesty or other immorality that is determined by a court to be present in the commission of a criminal offense.
AFA May, 2018

62. PREVENTION TOOLS Give yourself time to let your work percolate
Answer the following: is my result reasonable?
Peer review
Peer counsel (including ABCD)
Legal counsel
Mentor’s advice
Don’t let something fester
Explain your professional standards to your boss and explain that “you can lose your license” if …
Use multiple approaches to test results
AFA May, 2018

63. EXCUSES THAT WON’T WORK (PARTICULARLY IN COURT)
I’m young and naïve
I’m old and tired
I did my best
It is only a small lie or mistake
I don’t recall
The other person is more guilty than I am
“No harm, no foul”
AFA May, 2018

64. WHY YOUNG ACTUARIES SHOULD GET INVOLVED WITH PROFESSIONALISM
Becoming a SOA member is problematic if:
you have had any eLearning or examination discipline; and/or
if you were convicted of a criminal offense while an SOA candidate that involved a) financial integrity; b) dishonesty; c) sexual offense; d) bodily harm and violence; and/or e) theft or damage to property.
AFA May, 2018

65. THE PROVERBIAL SLIPPERY SLOPE
AFA May, 2018

66. THE BIGGEST PROBLEM: WHEN TO WALK AWAY
Always be prepared to walk away
Discuss your predicament with you family --- they will usually steer you in the right direction
Maintain your ethics and standards --- if you don’t, the next time it is easier to justify make a bad decision --- doubling down is NOT an option
Avoid the slippery slope!
AFA May, 2018

67. DON’T EVEN COME CLOSE TO A STRAW THAT MIGHT BREAK A CAMEL’S BACK
AFA May, 2018

68. ACTUARIAL INSURANCE
ADHERE TO YOUR MORAL COMPASS!
AFA May, 2018

69. DISCUSSION TOPIC #5: PROFESSIONAL INFLECTION POINTS
Ideas for checking your work for flaws
Who do you turn to when you have a critical professional question?
How to recognize you are at a professional inflection point?
AFA May, 2018

70. AFA May, 2018

71. MENTORING*
A relationship in which a more experienced or more knowledgeable person helps to guide a less experienced or less knowledgeable person.
A learning and development partnership between someone with vast experience and someone who wants to learn.
An experience and relationship that provides psychosocial support, career guidance, role modeling, and communication
* From Wikipedia
AFA May, 2018

72. AFA May, 2018

73. GOALS FOR A MENTOR* Empower your mentee to make positive choices
Encourage your mentee to take ownership of their learning
Develop appropriate skills
Develop core values (i.e., professionalism)
Strengthen mentee’s interpersonal skills and peer relationships *
AFA May, 2018

74. WRAP UP DISCUSSION Potential feedback to SOA about CE
Meeting professionalism CE requirement:
What areas of professionalism should be emphasized?
How best to discuss and/or teach professionalism?
AFA May, 2018

75. AND / OR
AFA May, 2018

76. 1. Please summarize your notes 2. Email your notes to jay@actentltd
1. Please summarize your notes 2. your notes to
AFA May, 2018