Letter From the President

The American Academy of Actuaries is stronger today than ever before. This isn’t because of numbers or dollars— though membership is steadily growing and our finances are strong—but because of the role that the Academy plays in serving the American public on behalf of the profession. That role is both unique and vital. It’s also one that the Academy has spent a half-century growing into.

Creating and maintaining the professionalism infrastructure for the U.S. actuarial community is at the heart of the Academy’s role. The Academy was established in 1965 to professionalize the U.S. actuarial community by providing the standards and disciplinary process necessary to be recognized as a self-regulating profession—to ensure that U.S. actuaries serve the public with the professionalism that it needs and deserves.

We have come a long way since then. Our Code of Professional Conduct binds Academy members to the highest standards of conduct, recognizing that each of us has a moral responsibility to all the many people who may depend on our work. Through the Actuarial Standards Board (ASB), the Academy has promulgated 50 actuarial standards of practice covering all areas of actuarial practice. Through the Actuarial Board for Counsel and Discipline (ABCD), we provide the basic disciplinary framework for the profession. Building this infrastructure was a slow, deliberate process—the Academy spent its first 25 years putting it into place. But we now have a framework of mature institutions that allows us to be a truly self-governing profession. Because of this, membership in the Academy is widely recognized at both the state and federal levels as the credential necessary for an actuary to practice in the United States.

In this year’s edition of The Record you will see the work of the ASB and the ABCD. These two bodies are integral parts of the Academy, and their activities are central to our professionalism mission. In addition, you will see the Academy’s other professionalism outreach and education activities. Taken together, this work represents the Academy’s ongoing commitment to ensuring the professionalism of the U.S. actuarial community.

The Academy is also the voice of the U.S. actuarial profession to the nation. This role flows naturally from our professionalism mission—we serve the public interest … on behalf of the actuarial profession. We cannot truly serve the public interest if we approach it in a self-serving manner. Unlike a trade association or union, we do not represent the narrow commercial interests of our members or the industries they work in. Washington is full of competing voices representing competing interests—the Academy stands out through objectivity, independence, and nonpartisanship.

The information and advice we provide is valued because we have a proven track record as a credible, nonpartisan resource. Because of that track record—and the half-century of dedicated work that went into building it—the Academy today enjoys a reputation for independence and objectivity that most other organizations can only dream of.

The only way to maintain a reputation for being impartial, nonpartisan, and unbiased is to truly be impartial, nonpartisan, and unbiased. Washington is full of groups that claim the mantle of impartiality while actively lobbying on behalf of a special-interest agenda—and it’s also full of folks who are very skilled at seeing through that sort of thing. Impartiality has to be real, or it won’t work. Maintaining the credibility is hard work, requiring constant discipline.
I am very proud of the way the Academy has built that discipline into our policies, processes, and volunteer culture. All Academy volunteers are required to acknowledge our Conflict of Interest Policy and attest to compliance with continuing education requirements. Every Academy document that is published goes through not only peer review, but a legal review, a policy review, and a communications review to ensure that it is accurate, unbiased, nonpartisan, and effective. This is why legislators, regulators, and journalists turn to the Academy as a trusted, reliable source of independent, objective insights on critical public policy issues such as Medicare and Social Security. The Academy has faithfully spoken in the public interest, on behalf of the profession, for more than a half-century. Over those decades, it has developed a voice that is truly powerful—a voice that is heard in the halls of Congress, in federal agencies, and in state capitals, departments of insurance, and newsrooms across the nation.

This year’s Record describes the wide range of public policy activities coming out of the Academy’s various practice councils. These activities—letters to Congress, practice notes, issue briefs, and policy papers—represent all of the many different areas of actuarial practice, and they address some of the most critical policy issues facing the nation today. The Academy’s efforts also touch a variety of audiences, including Congress, federal regulators, state regulators, international standards-setting bodies, and the American public.

Events over the last few years, along with our recent 50th anniversary, created both the need and the opportunity for Academy leadership to reflect in a focused way on our history and purpose. As many of you are aware, our profession has gone through a period of conflict among the various U.S.-based actuarial organizations. The Academy did not seek these conflicts, and I’m glad to say that we are on much better terms with the other organizations now than we were just a few years ago. But make no mistake—the tensions were real, the issues involved were important, and the disputes were a serious distraction for all of the U.S.-based organizations.

We are stronger because these conflicts forced us to articulate the Academy’s purpose—what makes the Academy’s role in the profession unique—more clearly and forcefully than we had been accustomed to. The Academy was created for a very specific reason: to provide the infrastructure, the standards, and the disciplinary process necessary for the U.S. actuarial community to be recognized as a self-regulating profession. This mission will remain not just relevant, but vital, as long as there are actuaries practicing in the United States. It’s a role, and a need, that’s simply not going away.

It’s also a role that’s unique to the Academy. We have a fundamentally different mission than that of any other U.S.-based organization, and we serve the public in a particularly direct way. The qualification standards, code of conduct, standards of practice, and discipline process all help protect the interests of those who rely on our work. Our public policy work directly serves the public good. The other U.S.-based organizations have different but equally important roles. The founders of those organizations recognized that the public benefits from an actuarial profession that is well educated and intellectually rigorous, and that has a growing body of tools and techniques available—just as the public benefits from advances in economics, architecture, or medicine.

I believe that the recent organizational conflicts were driven by two root causes. The first was a failure by some leaders of the profession to recognize that the missions of the various U.S.-based actuarial organizations are fundamentally different. The second was a tendency of many to measure the success of their organizations in commercial terms. As a result, they came to view the relationship between the various U.S.-based actuarial organizations in terms of commercial competition.

Let me be very clear: The Academy is not in commercial competition with any other actuarial organization.

Why am I making such a point of this issue? Because I’m convinced that this approach is not just mistaken, it has also proved to be deeply harmful to the profession.

The Academy is not a commercial enterprise. It is a nonprofit, tax-exempt professional association. You will see in The Record many activities that may seem similar in form to the activities of other organizations, such as publishing magazines, holding committee meetings, sponsoring research, and presenting webinars. These similarities are superficial and mechanical; the purpose is different because our mission is different. All of our activities are intended to support the Academy’s professionalism and public policy missions. The purpose is never to engage in commerce or to maximize revenues.

The Academy is not a commercial enterprise, and neither are the other U.S.-based actuarial organizations. They are all tax-exempt nonprofits. Prior generations of leaders saw the role of the various organizations they served through the lens of service to the profession and, ultimately, the public. This isn’t because they were too naïve to understand the realities of leading a successful professional organization. These are the men and women who built the profession we have today.

I believe that one reason relations between the different actuarial organizations have begun to improve is that today’s leaders are beginning to recapture that vision of public service. This is not an abstract issue. The recent focus by some on commercial success, as if we were business enterprises, was bad for the profession. It led to needless conflict and rancor. Instead of producing increased efficiency, it proved to be a tremendous distraction to leadership from all of the major U.S.-based actuarial organizations. More important, it took the focus away from the profession that we are all dedicated to serving. Our strategies must never place more emphasis on growing our own organizations than on the health of the actuarial profession. The lesson of the recent past is that if we lose our focus, we will lose our way—and the profession will suffer.

The greatest source of the Academy’s strength us our members and volunteers. You’ll see that membership has risen to over 19,000, with over 1,200 active volunteers. This represents the U.S. actuarial community’s shared commitment to professionalism and public service. We should all be proud of that commitment.

I would also like to recognize the contributions of Academy staff. Their dedication to supporting the actuarial profession—even though most are not actuaries themselves—is another source of strength. We simply could not achieve our mission without their help.

Other actuarial organizations preserve and expand the technical and intellectual capital—the tools and techniques—that makes what we do a science. The Academy has a different role. The Academy was founded so that the U.S. actuarial profession could earn the public’s trust. Our mission is to ensure that U.S. actuaries—both individually and collectively—provide the public with the professionalism it deserves. Flowing from this is our dedication to provide legislators, regulators, and the public with impartial actuarial analysis and insights into the toughest public policy questions facing our nation. Put more simply, the Academy serves the public in two ways. We look outward, beyond the profession, to provide independent and impartial actuarial analysis of important public policy issues. We also look inward, at ourselves, to ensure that we as actuaries provide the public with the professionalism that it needs and deserves.

Thanks to the efforts and dedication of prior generations of actuaries, the Academy has been doing this on behalf of the profession since 1965. Each of us, as members and volunteers, has a role to play in preserving that legacy for future generations of actuaries.