2014 AM Tom Terry Speech



Farewell Remarks of 2013-14 Academy President Tom Terry at the American Academy of Actuaries Annual Meeting and Public Policy Forum in Washington, D.C.
November 13, 2014
 
Terry: Volunteerism is the lifeblood of the Academy. I’m certain that each of the volunteers we’ve just recognized would speak very personally about the sense of accomplishment and fulfillment from the good work that stands behind today’s recognition.

Most of us here today are volunteers. And so I know we all readily identify with that sense of personal fulfillment.

Last month, I sent a note of thanks to a volunteer who was stepping down from leadership of one of the Academy’s key professionalism committees. He replied with a very nice note in return. Among other things, he said: “I consider the accomplishments of the committee to be some of the most important work of my career.”
 
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That speaks volumes about the relevance of our work at the Academy, as we go about doing what we do in service to the public and to the U.S. actuarial profession. We’ve had a very full year in 2014. In the public policy space, we’ve been busy across all practice areas. Here is a quick run-down of some highlights.
 
Health
The importance of our work in health policy was underscored by Secretary Sebelius’ comments this morning. Our Health Practice Council has continued its work with various stakeholders in Washington and beyond. Our goal has continued to be to contribute an unbiased, data-driven actuarial perspective in these complicated (and too-often politically charged) discussions.

We continue our Health Care Costs/Quality of Care initiative. In particular, we’re seeking to identify promising areas of focus for policymakers seeking to sustain and extend the recent slowdown in health cost increases. Those areas include better patient care coordination, financial incentives that reward value not volume, value-based insurance design, comparative-effectiveness research, and wellness and disease-management programs.

Also, this past year, the Academy has entered into a public policy research partnership with the Health Care Cost Institute (HCCI), an independent, non-partisan non-profit research institute. Going forward, this partnership will complement our intensive examination of health care costs and quality of care.
 
Pension
The highlight of our work in the pension area has been the public launch of our Retirement for the AGES initiative. At our launch event here in Washington in April, we brought together various retirement thought leaders to discuss a new principle-based framework for evaluating the effectiveness of retirement security systems.

Those of you who attended the pension breakout session this morning heard more about that initiative.
 
Property and Casualty
The Terrorism Risk Insurance Act is set to expire at the end of this year, and our Casualty Practice Council provided expert analysis to both houses of Congress as legislators consider the implications. Our reports provided objective analysis of the key provisions of the bills in both the House and Senate, while urging reauthorization of TRIA.  
 
Among other things, we believed it was important to share the actuarial perspective on the differences between the inherent unpredictability of catastrophic terrorism risks versus the more “standard” catastrophic risks associated with natural events.

Life
Our Life Practice Council has been instrumental in leading the charge toward principle-based reserving. PBR represents a sweeping initiative to modernize the way insurers determine their statutory reserve requirements. Our PBR Strategy Subgroup has been closely following the progress being made by the NAIC’s Life Actuarial Task Force. We want to ensure that the Academy’s values of objectivity and effectiveness are at top of mind as this process unfolds.
 
We’ve launched a new publication this year, the Academy’s PBA Perspectives, to keep our members up to date on important developments and related Academy activities.
 
Insurance Modernization and Systemic Risk
Shifting gears again, in December, the Federal Insurance Office published its report on modernizing insurance regulation in the United States. Our Financial Regulatory Reform Task Force provided written testimony on what we believe to be effective modernization. We appreciated this opportunity as part of the Academy’s ongoing work to develop basic concepts for good systemic risk regulation.
 
Professionalism
Now I’ll turn to the professionalism front.
 
This past year, the Academy continued its significant investment in improving communications with insurance regulators. Representatives from the Committee on Qualifications, the Actuarial Standards Board, the Actuarial Board for Counseling and Discipline, and the Council on Professionalism attended the NAIC spring and summer meetings. At each of these meetings, the COP hosted a regulator-only breakfast to provide a forum for frank and open exchange of concerns and ideas among regulators and professionalism representatives.

Also this year, our Council on Professionalism hosted various very well-attended professionalism webinars. The March 14 webinar, Precept 13: Preserving Integrity and Public Trust, was attended by more than 3,500 people. The June 26 webinar, Disclosure in the Real World: ASOP No. 41 Case Studies, drew more than 4,900 participants.

The COP published a discussion paper, through its Committee on Professional Responsibility (COPR), The Application of Precept 13 of the Code of Professional Conduct. The COPR also published an infographic, to help actuaries determine what to do when they come across a potential violation of the Code.

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What a year! Earlier this month, Cecil Bykerk, the Academy’s president in 2013, wrote that the actuarial profession is bigger than the vision of any one person or any one organization. I think that’s true. That comment speaks to the SOA, the CAS, and to the Academy.

At its core, a profession has a profound responsibility to serve the public interest. And the currency of that service is trust.

For over 300 million Americans who rely on our nation’s various financial security systems – both public and private – trust is what it’s all about.

I really believe a professional association must serve with humility and always understand the responsibility it has as a steward of trust in everything it does. This is not a status to achieve and be done with, but a beacon toward which always to orient.

It’s been my privilege to serve the Academy as its president this past year and I thank you for that opportunity. But more importantly, I thank all of you for your own personal commitment to fulfilling the very best our profession has to offer, and to helping the Academy to be the very best steward of trust it can be.