Session 121 OF, Actuarial Professionalism: The Verdict Is In! Moderator/Presenter: Joe L. Wurzburger, FSA, MAAA

Transcription

1 Session 121 OF, Actuarial Professionalism: The Verdict Is In! Moderator/Presenter: Joe L. Wurzburger, FSA, MAAA Presenters: David M. Dillon, FSA, MAAA Ben Marshall, FSA, FCIA, CERA, MAAA, J.D. SOA Antitrust Disclaimer SOA Presentation Disclaimer

2 Actuarial Professionalism: The Verdict Is In! DAVE DILLON, FSA, MAAA Vice President & Principal, Lewis & Ellis, Inc. BEN MARSHALL, FSA, FCIA, CERA Staff Fellow, Canadian Membership, SOA JOE WURZBURGER, FSA, MAAA Staff Fellow, Health, SOA Wednesday, June 14, 2017

3 Polling Slide #1 - On a scale of 1 to 10, if your energy level was a 10 at the start of the Health Meeting on Monday, how would you rate it now? A B. 7-8 C. 5-6 D. 3-4 E. Somewhere between 2 and negative-20 22% 29% 22% 14% 13% A. B. C. D. E. 2

4 How to address the lack of energy issue? Mock Trial! Image reprinted from Openclipart pursuant to Creative Commons Zero 1.0 License 3

5 Mock Trial! BUT: We won t stick too strictly to courtroom protocol Not intended to imply that these cases are matters that should be taken up by the court system In fact, most should not YOU are the jury! Verdicts will be given via polling devices Some verdicts are likely to be lopsided, but that s ok Still facilitates discussion Image reprinted from Openclipart pursuant to Creative Commons Zero 1.0 License 4

6 Most Importantly: We ll Learn AND Have Some Fun! Image reprinted from xkcd.com pursuant to Creative Commons Attribution-NonCommercial 2.5 License No changes were made 5

7 Case #1: Am I Qualified?

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11 Jurors, have you reached a verdict? Is Mr. Moody: A. GUILTY: He does NOT qualify to issue a SAO regarding LTC business. B. NOT GUILTY: He qualifies to issue a SAO regarding LTC business. Image reprinted from Openclipart pursuant to Creative Commons Zero 1.0 License 10

12 Case # 1 - Please Choose A. Guilty B. Not guilty 51% 49% A. B. 11

13 Polling Slide - Regarding satisfying the Continuing Education requirement in a less practiced area, what would your good judgment be in terms of the number of hours needed: (Choose one) 44% A. 1-2 hours within the 30 required B. 2-5 hours within the 30 required C hours within the 30 required D. 1-2 hours in addition to the 30 required E. 2-5 hours in addition to the 30 required F hours in addition to the 30 required 8% 33% 1% 4% 11% A. B. C. D. E. F. 12

14 Case #2: Assumption Change

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17 Jurors, have you reached a verdict? Is Mr. Smith: A. GUILTY: He should NOT have used new business assumptions that thought were unreasonable, OR he should have at least disclosed that he was relying on assumptions from someone else and is disclaiming responsibility for said assumptions. B. NOT GUILTY: He met his professional responsibilities by documenting his conversation with the Finance Director. Image reprinted from Openclipart pursuant to Creative Commons Zero 1.0 License 16

18 Case # 2 - Please Choose A. Guilty B. Not guilty 65% 35% A. B. 17

19 Polling Slide - Which of the following are binding on an actuary? A. Code of Professional Conduct B. Actuarial Standards of Practice C. Practice Notes D. A, B, and C E. A and B 16% 80% 2% 2% 1% A. B. C. D. E. 18

20 Polling Slide - Is a proposed ASOP binding on an actuary? A. Yes B. No 97% 3% A. B. 19

21 Polling Slide - What should Mr. Smith have done? A. What he did was ok. B. He should not have used the assumptions at all. 58% C. He should have disclosed that he was using assumptions from someone else and disclaimed responsibility for the assumptions. D. He should have pushed harder for more details to support the assumption, either through the Finance Director or even higher up the food chain. 31% E. He should have done something else not mentioned here. 3% 1% 7% A. B. C. D. E. 20

22 Case #3: Conflict of Interest

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25 Jurors, have you reached a verdict? Is Mr. Green: A. GUILTY: He did NOT follow the Code of Professional Conduct concerning conflicts of interest and receiving material compensation. B. NOT GUILTY: He appropriately followed the Code of Professional Conduct concerning conflicts of interest and receiving material compensation. Image reprinted from Openclipart pursuant to Creative Commons Zero 1.0 License 24

26 Case # 3 - Please Choose A. Guilty B. Not guilty 77% 33% A. B. 25

27 Polling Slide - If you were the actuary in a conflict which repeats annually, would you: A. Decline the work B. Accept the work with an open-ended waiver C. Accept the work with a one-year waiver that would have to be renewed annually D. Don t know, it depends on the situation and the clients involved. 0% 14% 52% 34% A. B. C. D. 26

28 Polling Question: Show of Hands You are a consulting actuary. You are asked to assist Company A with the purchase of Company B. Are these situations conflicts? Raise your hand if yes, the situation is a conflict. A. You do all actuarial work for both A and B B. You do valuation work for A and you do pricing work for B C. You do pricing work for A and you do valuation work for B D. You do valuation work for A and your co-worker in another location does valuation work for B E. You do valuation work for A and you are the actuarial auditor for B F. You do valuation work for A and your co-worker is the actuarial auditor for B G. You do valuation work for A and you previously did valuation work for B, but you were replaced three years ago by another consulting firm. H. You do valuation work for A and you previously did valuation work for B, but you were replaced 3 years ago by an in-house actuary who became qualified. Image reprinted from Openclipart pursuant to Creative Commons Zero 1.0 License 27

29 Case #4: Premium Deficiency Reserves

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34 Jurors, have you reached a verdict? Is Mr. Cardinal: A. GUILTY: He did NOT follow the Actuarial Standards of Practice and the Statutory Statements of Opinions concerning the establishment of a Premium Deficiency Reserve. B. NOT GUILTY: He appropriately followed the Actuarial Standards of Practice and the Statutory Statements of Opinions concerning the establishment of a Premium Deficiency Reserve. Image reprinted from Openclipart pursuant to Creative Commons Zero 1.0 License 33

35 Case # 4 - Please Choose A. Guilty B. Not guilty 83% 17% A. B. 34

36 Polling Slide - If there is a conflict between the SSAPs and the ASOPs, what would you do at year-end regarding an actuarial estimate: A. Follow SSAPs and issue an unqualified opinion 65% B. Follow SSAPs and issue a qualified opinion C. Follow ASOPs and issue an unqualified opinion. Let company book what they want. D. Talk to company s auditors/actuaries to get their opinion first then decide. 6% 19% 10% A. B. C. D. 35

37 Polling Slide - If there is a difference between your estimate and the company s estimate, what would your preference be? A. Convince the Company you are right and issue an unqualified opinion; B. Issue a qualified opinion based on your estimate. 48% 52% A. B. 36

38 Case #5: Continuing Ed Audit

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43 Jurors, have you reached a verdict? Is Mr. Bryant: A. GUILTY: He did NOT meet the 30 hours continuing education requirement. B. NOT GUILTY: He has satisfied the requirement for 30 hours of continuing education. Image reprinted from Openclipart pursuant to Creative Commons Zero 1.0 License 42

44 Case # 5 - Please Choose A. Guilty B. Not guilty 40% 60% A. B. 43

45 Polling Slide - How do you track your CE? A. Spreadsheet B. TRACE C. The SOA s CPD Tracker D. Hard-copy records E. Saved s F. Other G. Wait, we re supposed to keep track of this stuff? 0% 0% 0% 0% 0% 0% 0% Answer Now 10 A. B. C. D. E. F. G. Countdown 44

46 Polling Slide - Have you ever gone through an audit of your CE? A. Yes B. No C. I plead the Fifth 0% 0% 0% Answer Now A. B. C. 10 Countdown 45

47 Case #6: Competitor s Report

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51 Jurors, have you reached a verdict? Is Mr. Black: A. GUILTY: He should NOT have looked at the report from ABC. B. NOT GUILTY: It is ok that he looked at the report from ABC. Image reprinted from Openclipart pursuant to Creative Commons Zero 1.0 License 50

52 Polling Slide - Does the Code of Professional Conduct apply in cases involving interaction between an actuary and a non-actuary? A. Yes B. No C. It depends 0% 0% 0% Answer Now A. B. C. 10 Countdown 51

53 Polling Slide What else should Mr. Black have done? A. Nothing - he did the right thing. B. He should have simply told his client that he couldn t help him. C. He should have discussed the situation with his competitor. D. He should have referred his client elsewhere. E. He should have done something else not listed here. 0% 0% 0% 0% 0% Answer Now 10 A. B. C. D. E. Countdown 52

54 Case #7: ASOP 50

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57 Jurors, have you reached a verdict? Is Mr. Williams: A. GUILTY: It was not appropriate to round the out-of-model adjustment to produce the final AV. B. NOT GUILTY: It was appropriate to round the out-of-model adjustment to produce the final AV. Image reprinted from Openclipart pursuant to Creative Commons Zero 1.0 License 56

58 Polling Slide What is your approach to gaining regulatory approval for something that may not be considered a slam dunk? A. Document as little as possible and make the regulator request more if necessary. B. Document as much as possible, anticipating potential regulator questions. C. Engage in a dialogue with your regulator to determine what he or she would like to see. D. Something else not listed here. 0% 0% 0% 0% Answer Now A. B. C. D. 10 Countdown 57

59 Deep Thoughts With Ben & Dave

60 Image reprinted from Openclipart pursuant to Creative Commons Zero 1.0 License 59

61 Additional Cases

62 Polling Slide Additional Case #1 A. GUILTY B. NOT GUILTY Answer Now 0% 0% A. B. 10 Countdown 61

63 Polling Slide Additional Case #2 A. GUILTY B. NOT GUILTY Answer Now 0% 0% A. B. 10 Countdown 62

64 Polling Slide Additional Case #3 A. GUILTY B. NOT GUILTY Answer Now 0% 0% A. B. 10 Countdown 63

65 Thank you! And Goodbye, Hollywood Image reprinted from Openclipart pursuant to Creative Commons Zero 1.0 License 64