Several of you wrote to me that the attached file to my recent communication
to you on this subject is indecipherable. And I couldn't do in text either.
So I have provided it as a message to you all.
Please note that the deadline for comments is August 1. You will see that my
recommendation is to lift this deadline to allow more time for comments. So
if you are inclined, this would be one thing you can do quickly.
Regards.
Stan Khury
=======================================================
To: Mr. Henry Knowlton, Chairperson, ABCD
Dear Henry:
Thanks for the opportunity to comment on the proposed revisions.
Before I give you my comments, let me first tell you that I believe that an
effective counseling and disciplinary aparatus is a critical element of what
makes the actuarial profession a profession. Nothing in what I say
hereinafter is intended to dominish this view in any way.
My single recommendation to you and the ABCD is that the August 1, 1997
deadline be lifted and a series of "exposure forums" be held at all the
actuarial meetings of the sponsoring actuarial organizations throughout 1997
and 1998 -- so that you and your colleagues may hear directly and personally
form members of the profession. I really think that the prpocess of asking
for written comments and then going into a huddle and picking and choosing
what you want, while useful, is not conducive to building a lot of trust in
the process and the ABCD.
First some general comments.
Overal, I find the proposals quite troubling. They represent a significant
expansion in the already extensive powers of the ABCD. Even though I might be
able to find a way to raionalize this expansion, I find that this is not
possible at any levlel -- as this expansion of powers comes exclusively at the
expense of those whose circumstances bring them before you, those being
investigated by the ABCD.
Alos, it would have been very helpful to me if a companion document (section?)
were provided that discussed EACH of the proposed changes, discussed the
rationale for it, the benefits that woudl derive from its implementation, and
the possible pitfalls that the ABCD will need to guard against. The material
that is in the exposure draft provides very little of this. IT is much too
smoothly and benignly stated and really does not strive to describe the true,
substantive impact of these changes.
Finally, the proposed changes are described int he introductory memorandum as
"...some 'fine-tuning' to emphasize the fact-finding nature of its
activities..." I find this statement to be untru and totally misleading. The
significant expansion of the powers of the ABCD and the diminution of the
ability of subject actuaries to defend themselves is hardly "fine-tuning."
Also, the suggestion that the ABCD is merely in the business of "fact-finding"
is a fiction that must be stopped. Whenever the ABCD recommends that pubic
discipline be administered, it is going well beyond the act of fact-finding.
More specific comments onf the proposed changes:
1. Representative Board. Whatever led to the conclusion that a broadly
representative ABCD is not a good idea? The test is silent on the rationale
for this. It would be helpful to know the motivation for this suggested
change.
2. Section 5.A. This section vastly increases the scope of the activities of
the ABCD. In this regard, no one needs to file a complaint or notice of any
kind before the ABCD can intitate an inquirey. This is dangerous. There is
no way to restrain the ABCD from harassing an actuary if it wished to. I am
not syaing that the ABCD will do so, but the opportunity to do so is there and
that must be stopped. In my opinion there must be an accuser -- even if
becomes necessary for a member of the ABCD to file a complaint based on some
stsory he or she may have read in some newspaper or heard at some meeting.
The idea of giving the ABCD this carte blance, I am sorry to say, reminds me
of the ability of certain European governments organizations stealthily moving
in the night investigation people for any and no reason at all. With bad
consequences all around.
3. Section 5.C.1 (new seciton 5C). It is strange that, under the new rules,
the ABCD may be able to use information provided by Advisors and others
without that information being introduced into evidence. Isn't an "accused"
actuary entitled to dend himself? This is really preposterous. I cannot
determine the rationale for this change from the material provided to me --
but it surely would be interesting to learn what moved the ABCD to recommend
this change.
4. Section 5.D. This is yet another expansion of the powers of ABCE and a
further diminution of the ability of a subject actuary to deal with the ABCD.
The implication of this change is that a person can be "ordered" to a hearing
without knowing if he has been charged with anything. This looks like a grand
jury proceeding except that ABCD can act based on what it has learned during
this prpoceeding, with the subject actuary not knowing what, if anything, the
charges are. This is also suggestive of a new class of modern day commissars.
An accused actuary must know the charges against him or her prio to the
commencement of the hearing. ALthough I am not a lawyer, I can tell you this
this looks like it violates all kinds of legal protections that are commonly
available to the citizens of this country.
5. Section 5.E.2. These changes give the ABCD the power to limit the
participation of a subject actuary's counsel during an ABCD hearing. This is
totally arbitrary and certainly gives essentially unlimited power to ABCD to
stifle a subject actuary's counsel.
6. Section 5.E.3. Once again the powers of the ABCD are expanded
tremendously by allowing it to be the sole and final arbiter, without any
apparent guidelines, in connection with what is and what is not admissible as
evidence. This proposal gives the ABCD total and complete power over the
proceeding.
7. Section 10. How can the ABCD prevent a subject actuary from talking about
a case in which he was investigated when he waives all confidentiality with
respect to himself? This isi a heavy burden placed on a subject actuary who
may wish to take his case into the court of public opinion. I do not believe
that secrecy, however benevolent its intentions may be, really serves the
process well.
On the basis of what I have seen, the folliwn gscenario is possible: <<Some
person, anonymously, sends a letter to the ABCD pointing to a set of facts.
The ABCD determines to look into the stituation. The ABCD begins to
investigate, appoints an investigator, who render a report, without
recommendation. The ABCD, based on what it ses in the report, decides to call
a hearing. The subject actuary is required to appear at the hearing. He
doesn't know what charges, if any, are pending or are being considered. His
counsel accompanies him but is essentially prevented fromeffectively
participating in the process by the wisdom of the ABCD. FOr good and
sufficient reason, the ABCD decides to prevent certain documents and witnesses
from appearing at the hearing -- individuals and documents that really make a
difference in the outcome of the case. The ABCD concludeds to recommend
public discipline.>> This scenario, however implausible, is well contemplated
within the new rules! I realize you do not intend to do so but the fact of
the matter is that this scenario is possible and without too much effort
either.
One final comment that does not fit wny where else: shouldn't the ABCD
consider using the rules of a court of law whever the case points toward any
form of public discipline? The reason I mention this is that membership in a
professional actuarial organization is a valuable asset and anything the ABCD
does to diminish the value of that asset (i.e., by recommending any form of
public discipline) is actionalbe if the ABCD did not follow the rule of law in
reaching its conclusions. I can just visualize a situation where theh person
about to be disciplined publicly files suit and gete a temporary restraining
order against the ABCD seking the protection of the court while the matter is
adjudicated. Thus the case will be ultimately heard in a court of law. I
have seen enough case law on this point to be convinced that you should review
this point and determine some point at which you must turn to a court setting
before going forward.
Once again, I would strongly urge the ABCD to consider lifting the August 1,
1997 deadline and to hold a serios of hearings (exposure forums) on the matter
in 1997 and 1998.
Very truly yours,
C. K. Stan Khury.