Professionalism Counts, December 2019
What Happens During an ABCD Investigation?
The Actuarial Board for Counseling and Discipline (ABCD) was established in the Academy’s bylaws to strengthen members’ adherence to the recognized standards of ethical and professional conduct required by the Code of Professional Conduct (the Code). The ABCD does this in two ways: It responds to requests for guidance on how to comply with the Code, and it conducts inquiries into possible violations of the Code. Last month we took a look at the request for guidance process. This month we turn to the process for investigating complaints.
The ABCD acts on complaints from actuaries, clients, regulators, and the general public and can also initiate action on its own if it becomes aware of instances in which the Code may have been violated. The most common way for an ABCD inquiry to begin is the filing of a formal complaint. A formal complaint is a written document, signed by the complainant, that describes what the complainant believes the actuary did or failed to do that might be a material violation of the Code. The ABCD Rules of Procedure further asks the complainant to provide materials that document the conduct in question, when feasible.
Once a complaint is received, Academy staff contacts the actuary who is the subject of the complaint (the “subject actuary”) to advise that a complaint has been filed and offer an opportunity to provide an initial response. After the subject actuary provides his/her response, the ABCD chairperson and vice chairpersons (collectively known as “the chairs”) review the submitted information to decide on a course of action. If the chairs determine that, based on the materials they have reviewed, there is insufficient likelihood that a material violation occurred, they will dismiss the complaint. But if the chairs find sufficient reason to believe that a material violation may have occurred, they will decide to conduct further investigation.
When further inquiry is conducted, the chairperson typically appoints an investigator who gathers information and prepares a report on the results of the investigation, attempting to document the facts supported by evidence. Then the ABCD may hold a fact-finding hearing at which the subject actuary may appear, provide information, and give testimony. After the hearing, if a majority of the ABCD decides to recommend discipline, that recommendation is made to the organization(s) to which subject actuary belongs.
The ABCD does not have any authority to impose discipline; only the membership organizations can impose discipline. The ABCD’s recommendations for discipline include the possibility of public or private reprimand, suspension, and expulsion. It is important to remember that it is the organization(s) of which the actuary is a member, rather than the ABCD itself, that decides on and then imposes any discipline. The ABCD provides only guidance, investigation, and counseling and, where it thinks warranted, recommendations for discipline.
When investigating complaints, the ABCD serves the U.S. actuarial profession by providing a means to investigate the conduct of the occasional actuary who has acted in a manner that does not comply with the mandatory obligations of the Code. Such investigations can lead to the ABCD deciding to counsel that actuary on his or her conduct when discipline is not recommended, or to informing the relevant organization(s) when discipline is recommended and why.
By providing guidance to actuaries with questions and by investigating possible material violations of the Code, the ABCD plays a vital role in the actuarial profession’s efforts to ensure that all members maintain our self-imposed high standards of practice, conduct, and qualification. But the ABCD can only do its job if actuaries do theirs— Precept 13 of the Code requires actuaries to report any “apparent, unresolved, material violations of the Code.” Actuaries can submit complaints with the knowledge that their complaints will be fully and fairly investigated—an outcome that will benefit the entire profession.