Random Sampler

Taking a Hard Look: The Actuarial Disciplinary Process

by Michael J. Miller

The CAS Board recently received an oral report from the ABCD that I personally found very frightening. Let me start with the proposition that most actuaries support a meaningful disciplinary process as a means of fulfilling one of the requirements of a legitimate profession.

In my view, the failing of the U.S. actuarial profession is that it has adopted a disciplinary process that is counter to the beliefs we hold dear and the rights granted to us by the U.S. Constitution. The Sixth Amendment guarantees the accused the right to a public trial, the right to an impartial jury, the right to confront one's accuser, and the right to have a lawyer actively assist in defense.

I am no Constitutional historian, but it is my understanding that the Sixth Amendment was not intended as a means to further embarrass or persecute the accused, but rather to protect them. In fact, these rights protect each of us from what would otherwise be tyranny.

I challenge each actuary to step back and take a hard, objective look at what the U.S. actuarial profession has done with its disciplinary process. Ostensibly to "protect" the accused we have implemented a secret system of investigation, trial, sentencing, and ultimate disposition.

Without public review, there can be no assurance that our judges always render decisions that are impartial and free of personal biases. There can be no assurance our judges are enforcing the Standards of Practice and Code of Professional Conduct either as written or as intended. There can be no assurance our judges are not sometimes creating and imposing new standards of practice and conduct. Having the judges say "trust us, we will treat you right" is no substitute for public review.

If we are to have a secret process with no public review of the judges' actions, proceedings, and decisions, then it is absolutely imperative that the ABCD have in place clear and unambiguous guidelines to be followed in enforcing our standards of practice and conduct. These guidelines must be submitted for discussion and approval by the actuarial profession. It is frightening to know that no such guidelines exist. Yes, it is true that procedural rules are set forth (although it should be noted that these rules clearly limit lawyer participation in all disciplinary proceedings), but there are no guidelines for interpretation of the standards of practice and code of conduct. For example, in terms of deciding what constitutes a material violation, it was reported to the CAS Board that "no specific guidelines as to materiality exist." It is my understanding that no specific guidelines for interpreting any of our code of conduct precepts or standards of practice are in place. It is unacceptable to have a secret trial where the basis for the judges' decision is neither subject to specific guidelines nor public review.

The dangers of such a secret trial are further compounded by the fact that we are not guaranteed the right to confront, or even know, our accuser. Can you imagine the potential damage to an accused if an accuser enters a baseless complaint and the ABCD, for its own reasons, proceeds to investigate? Even if they eventually exonerate the accused, damage has been done. An accused who values confidentiality is in a "Catch-22"—unable to expose the complaint's falsity and judges' prejudices without also exposing the fact that he or she was subject to a professional investigation. I contend that this "Catch-22" situation is the definition of tyranny.

How would you feel about being tried for a crime if the police and prosecutor worked for the judge? That is exactly what happens in our disciplinary process. The investigator/prosecutor is retained by our judges. Don't you think the judges might sometimes be inclined to give their prosecutor the benefit of the doubt? Without public review, there can be no protection against these subtle but persistent procedural biases.

If I were ever accused of violating any standard of practice or any precept of our code of conduct, I would refuse to participate in this secret trial process. Due to the particulars presented here, my preference would be to be convicted in absentia by this secret tribunal and then defend myself in an open, public court. These secret, inherently unjust, trials can only survive if we professionals continue to acquiesce. It is absurd to suggest that secret trials with no guidelines are the only way to go when the opposite approach has been successfully tested for over 200 years.

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The president of the American Academy of Actuaries, Lawrence A. Johansen, responds: The issues raised in Mr. Miller's article will be addressed in several articles on the U.S. disciplinary process to be featured in the March issue of The Actuarial Update. Academy members are encouraged to read the March Update; interested actuaries who are not Academy members but wish to read the articles may request a complimentary copy by contacting the American Academy of Actuaries at (202) 223-8196.