Disciplinary Process Chris Daykin

1. Disciplinary ProcessChris Daykin Usma, 17 July 2010

2. 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.

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

4. 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

5. 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

6. 4-stage process ….. first 3 stages …..

7. Disciplinary SchemeTribunal Outcomes….. stage 4 = appeal An APPEALS TRIBUNAL, meeting in public, can review findings of Professional Misconduct.

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

9. 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

10. 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

11. Complaints – 4 years to June 2008 by practice area • Pensions 45 • Life insurance 11 • General insurance 2 • Investment consulting 3 • Student 5 TOTAL 66

12. 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 …

13. 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

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

15. 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

16. 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.

17. 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

18. 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

19. 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

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

21. 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

22. 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

23. “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

24. 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 !

25. 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 mix The Handbook describes the skills

26. 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

27. Challenges facing the professionChris Daykin Usma, 17 July 2010

28. What could go wrong for the profession - What if? • Problems which could lead to criticism of actuaries • any insurance company getting into financial difficulties • actuaries only looking after interests of shareholders • mis-selling of insurance contracts • shortcomings in social security reform • life products which are not understood by customers • under-reserving • 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?

29. 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?

30. 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?

31. 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?