Professionalism Counts, October 2022
Why Professionalism Matters
What are the hallmarks of a profession? First, members of a profession have a high level of expertise gained through years of study and experience. Because members of the public generally lack this expertise and may be unable to determine whether a professional is providing services appropriately, a high level of trust is required. Professions gain this trust by creating and upholding high standards of conduct, qualification, and practice. A disciplinary process is also necessary to ensure that those standards are being met and demonstrate that the “profession is in control of its governance and is appropriately sensitive to the public interest.”
Today, the U.S. actuarial profession has a strong professionalism infrastructure, but that wasn’t always the case. In the mid-1950s, the leaders of the actuarial profession realized that the profession lacked enforceable standards and a way to ensure that actuaries were qualified, were competent, and practiced responsibly. As the New York superintendent of insurance said at the time, “Our laws today demand no more proof of the actuary’s competence than did the laws of ancient Rome.” Obviously, standards of conduct were needed, as was some type of nationally recognized certification to make clear who was a qualified actuary. (At the time, accountants had been commenting on items in insurance company statements that were purely actuarial in nature. The existing actuarial organizations began adopting conduct guides in the late 1950s, and their leaders began meeting in 1963 to explore “ways and means of solving problems of mutual concern including the accreditation or licensing of actuaries.” The American Academy of Actuaries was founded in 1965 to, among other things, “establish, promote, and maintain high standards of conduct and competence within the actuarial profession.” Academy membership was to serve as an indication that an actuary was qualified.
The long journey from those early beginnings of actuarial professionalism to today’s robust professionalism infrastructure has been chronicled elsewhere, so we’ll jump forward to today. Over the past 50-plus years, the profession has created and steadily strengthened standards of conduct, qualification, and practice. We now have a single Code of Professional Conduct, adopted by each of the five U.S.-based actuarial organizations. The Actuarial Standards Board has adopted over 50 actuarial standards of practice (ASOPs) covering all areas of practice and updates them as appropriate. The Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States (USQS) provide standards of qualification for the U.S. actuarial profession. Rounding out the professionalism infrastructure is the established counseling and discipline process, carried out by the Actuarial Board for Counseling and Discipline (ABCD).
An unusual resource available to actuaries is the counseling function of the ABCD. The creators of the ABCD had the wisdom and foresight to realize that timely counseling could prevent the need for discipline. Actuaries who are facing a difficult professionalism issue and would like to discuss it confidentially or have questions about qualifications for a certain assignment or how an ASOP applies to a task are encouraged call upon the ABCD for advice. Taking steps to prevent errors before they happen helps actuaries uphold the profession’s responsibility to the public and in turn, maintain the public’s trust.
As noted earlier, one of the hallmarks of a profession is that its members have expertise that the general public lacks. So, who created the actuarial professionalism infrastructure? The answer is dedicated actuaries, who spent years thinking about what was required to make a strong, trustworthy profession. Today’s professionalism infrastructure would not exist without years of effort from Academy volunteers thinking deeply about professionalism and how to improve it among actuaries.
Our strong professionalism infrastructure helps ensure that actuaries are competent and provide actuarial services with integrity, skill, and care. The strong foundation that this professionalism infrastructure provides for ethical actuarial practice helps actuaries fulfill their responsibility to the public, and in turn allows the public to trust actuaries and the actuarial profession. Every actuary has a role to play in maintaining that trust, by adhering to the Code, ensuring that they are qualified to perform the services they are providing, and following the standards of practice that apply to each assignment.