Professionalism

1. Professionalism IAA Fund Meeting Kuala Lumpur, October 10, 2011 Darryl Wagner, FSA, MAAA

2. Agenda • What is professionalism? • The IAA and professionalism • Supporting actuarial professionalism

3. Professionalism for the actuary • professionalism is a key component of actuarial education • it is important to devote time to learning about professionalism as well as about technical skills • it is necessary to develop a professional attitude and way of thinking – there are often no simple black and white answers • we need to learn what it means to do a good professional job

4. Characteristics of a profession 6 key characteristics of a profession are: • members join together to apply a specialised skill • the skill has been developed through appropriate education • members have a special relationship with those served • recognised by the public as an authority in field of expertise, able to serve the public interest • standards of competence and conduct of members • high level of integrity by members in exercising judgement

5. Professionalism in practice Professionalism concerns behavior of professionals and the profession which will: • maintain the reputation and integrity of the profession • serve the interests of clients/employers • serve the public interest (the common good)

6. Professionalism at two levels • Professional issues facing the profession, for example • responding to regulators • helping to educate government, the media and public • ensuring that the profession is ‘fit for purpose’ • Individual matters of professionalism, for example • high ethical standards • adhering to the code and standards of practice • reporting if necessary (whistle-blowing)

7. What is expected of us as professional people? • demonstrating, and applying appropriately, specialist skills • providing reliable up-to-date technical knowledge and advice • complying with Profession’s code of conduct and standards • complying with legislation and regulator’s standards • performing statutory roles to a high standard • behaving ethically • exercising judgement with high level of integrity • communicating well • having due regard to the interests of those affected

8. What is expected of us as professional people? (continued) • respecting and supporting others • relationship of trust with clients (fiduciary relationship) • being reliably confidential • life-long learning – developing our knowledge and skills • having no adverse disciplinary record • assisting the profession to serve the public interest • contributing to public debate • contributing to the work of the profession

9. Professionalism-Recap • Incredibly important • Applies collectively and individually • Far reaching • Not black and white • Requires substantial and constant attention

10. The Mission of the IAA To represent the actuarial profession and promote its role, reputation and recognition in the international domain To promote professionalism, develop education standards and encourage research, with the active involvement of its Member Associations and Sections, in order to address changing needs

11. IAA Mandate to Professionalism Committee • The IAA Council requested the Professionalism Committee to address the strategic action required to “Achieve a common understanding of the principles of professionalism, including codes of conduct and disciplinary procedures”.

12. Key Conclusions • A common understanding of the principles of professionalism (the “Principles”) is possible. • Professionalism covers the actuary’s technical competence and skills, ethical behaviour and professional oversight. • Aspects of professionalism should be introduced throughout the training and development of an actuary.

13. Definition of Professionalism Professionalism means: • The application of specialist actuarial knowledge and expertise; • The demonstration of ethical behaviour, especially in doing actuarial work; and • The actuary’s accountability to a professional actuarial association or similar professional oversightorganisation.

14. The Principles of Professionalism • Knowledge & expertise • Values & behaviour • Professional accountability

15. Principle A Knowledge & expertise: • “An actuary shall perform professional services only if competent and appropriately experienced to do so.”

16. Principle B Values & behaviour: • “An actuary shall act honestly, with integrity and competence, and in a manner that fulfils the profession’s responsibility to the public and upholds the reputation of the actuarial profession.”

17. Principle C Professional accountability: • “An actuary shall be accountable to a professional actuarial association or similar professional oversight organisation.”

18. Key points of discussion • What exactly is “competence”? • How to define communication in a professional context? • Is communication a “soft skill”? • Is business awareness always essential? • How to address the matter of the public interest? • How to deliver continuing professional development? • How and when should professionalism be taught? • How should professional accountability be defined?

19. Key Recommendations • The IAA should adopt the Principles as proposed. • The Principles should be used within the IAA to establish a common terminology and framework. • The Committee does not recommend that the IAA develop a model code of conduct.  The proposed Principles are a sufficient basis from which FMAs can develop their own codes of conduct.  The process and experience of developing its own code of conduct is also an informative and valuable process for any FMA. • Council should consider further actions as set out in the report in order to entrench the Principles within the IAA and its FMAs.

20. Professionalism

21. Resources available to actuaries • Code of Professional Conduct • Regulations • Qualification standards • Continuing professional development • Actuarial Standards of Practice • Disciplinary Process • Peers • Common sense • Other support networks

22. Resource Development Models • Independent development • IAA principles/models • Leverage/mentorship

23. Supporting Knowledge & Expertise • Basic education • Continuing professional development • Actuarial standards of practice • Peer review • Other?

24. Model International Actuarial Standards of Practice • IAA established an Interim Actuarial Standards SubCommittee • Current draft developed by Generic Task Force – (ISAP 1) General Actuarial Practice • Foundational standard • Additional Task Forces on ERM, IAS 19, IFRS 4 and Social Security

25. Model International Actuarial Standards of Practice • New Task Force established in May – Task Force on a Permanent Structure for International Standards • Due Process Task Force – working on a revised due process for considering Statements of Intent for developing ISAPs

26. Supporting Professional Accountability • Counseling • Disciplinary process • Model for international cooperation: • Established and/or recruited panels of international experts to assist in local administration of counseling and discipline

27. Questions? Contact info: Darryl Wagner dawagner@deloitte.com