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 TEAMprepare case report

ADJUDICATION PANELprivate meeting

Dismisscomplaint

Reprimand/FineDirect retraining

Refer toTribunal

Disciplinary SchemeTribunal Outcomes….. stage 4 = appeal

TRIBUNALpublic meeting

Complaint dismissed

Professionalmisconduct

Reprimand

Directretraining

WithdrawPractising Certificate

Suspend membership

Expel

Fine

End

An APPEALS TRIBUNAL, meeting in public, can review findings of Professional Misconduct.

Stage 4Appeal

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 Trustee 11 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 insurance 2 Investment consulting 3 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 1Requiring 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 2All 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 HandbookThe 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 mixThe 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 actuarieso any insurance company getting into financial difficulties

o actuaries only looking after interests of shareholders

o mis-selling of insurance contractso shortcomings in social security reformo life products which are not understood by customerso under-reservingo Solvency 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?