From the President: Revising the Rules

At its May meeting, the Board of Directors unanimously voted to send revised Rules of Procedure for Disciplinary Action, as well as the proposed Constitution and Bylaw changes that will be necessary to implement the new procedures, to the membership for review.

You should have received the mailing, which contains these changes from the CAS Office, in July. I hope you have taken the time to review them. These proposals were developed by a special task force of present and former board members including four past presidents of the CAS. The Board of Directors appointed the task force to review the CAS process after a discipline case revealed that the current procedures lack specific guidelines and direction in certain aspects. That is not to say, however, that our current process for disciplining CAS members who have breached provisions of the Code of Professional Conduct is not legally sufficient and defensible. Rather, it became apparent that the process could be enhanced by adding more specific details to the procedures, and by making other changes to the process for the benefit of all concerned.

The CAS Bylaws provide that complaints concerning alleged violations of the CAS Code of Professional Conduct are to be referred to the appropriate investigatory body: the Actuarial Board for Counseling and Discipline (ABCD) or, in Canada, the Canadian Institute of Actuaries (CIA). The CAS discipline process begins only when a recommendation for discipline has been received from one of these two organizations.

The new procedures, while preserving all the elements of due process (a statement of the charges, the opportunity to respond, and an impartial decision-maker), make it clear that formal legal rules of evidence will not be imposed. The role of legal counsel both to the CAS and to the actuary is defined and limited to providing advice to the client and to articulating appropriate legal principles.

Experience in both the CAS and with other actuarial organizations has shown that a professional dialogue between the actuary who is the subject of the complaint and the discipline committee members is very important to achieve a full and proper understanding of the circumstances in each case. Unfortunately, in some instances the lawyers have so dominated the proceedings that achieving final resolution has become very difficult. The proposed changes should remedy this without depriving the actuary of any of his or her legal rights.

The new procedures also make clear what should be considered by the Discipline Committee in reaching its decision; that is, the intent of the actuary, the willfulness of the conduct, the harm caused, and/or any prejudicial material errors in procedure by the investigating body.

Upon the advice of outside legal counsel and after extensive deliberation by the Board of Directors, the new procedures reflect some significant changes in the appeals process. First, rather than an appeal being heard by the entire Board of Directors, it will be heard by a subset of the Board. When an appeal is filed, the president will designate five Board members without a conflict of interest in the particular case, and the actuary who filed the appeal will select three of those members to serve on the Appeals Panel.

Second, grounds for overturning the original decision are now specifically limited to three instances: (1) where the decision was clearly erroneous, (2) a prejudicial failure to conform to the rules of procedure that led to an unwarranted result, or (3) where the disciplinary action imposed was clearly inconsistent with the violation that occurred.

Third, the appeal will be based entirely on the written record with no appearance by the actuary or legal counsel. Of course, the actuary's written submission arguing why the Discipline Committee Panel's decision should be overturned will be a part of the written record.

These changes to the appeals process are a distinct improvement. Under the current procedure an appeal to the Board of Directors has been, in effect, a new trial, permitting the actuary a third opportunity to present the same arguments but before an entirely different group of actuaries. (The first instance being the hearing before the investigatory body; the second, the hearing before the CAS Discipline Committee). Besides being cumbersome and expensive for the actuary and the profession, this may not lead to the most appropriate, nor proper decision.

I believe that the new procedures are an enormous improvement over the current process. Thankfully, the CAS has not had many disciplinary cases thus far but, as we grow larger and our practice becomes more diverse and complex, we must be prepared to deal with the possibility of more in the future.

I hope all CAS members have reviewed the proposed changes, but if not, it is still not too late to do so before the Board of Directors considers any changes based on member comments. You can send your comments to either the CAS Office or E-mail them to me. I am very interested in hearing from you on this very important subject.