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In My Opinion
Confidentiality of the ABCD Process
by Walter C. WrightThe Code of Professional Conduct of the American Academy of Actuaries, which has been adopted by the Casualty Actuarial Society, spells out the high standards of conduct, practice, and qualifications of the actuarial profession. The Actuarial Board for Counseling and Discipline (ABCD) is a vital arm of our profession, necessary for investigating alleged violations of this code.
Most of us have never been the subject of a complaint to the ABCD, hope that we never will be, and therefore probably do not give too much consideration to the rules and procedures of the ABCD. We should, however, because even if the ABCD never affects us directly, it is likely to affect friends and associates within the CAS, and to affect the public perception of our profession. The "Random Sampler" by Michael J. Miller, published in the last issue of The Actuarial Review, identifies a number of concerns he has about the ABCD process. One procedural area in which I am particularly interested is the confidentiality of proceedings.
An actuary who may be the subject of an ABCD inquiry (the "subject actuary") deserves, and should expect, that the initial proceedings will be confidential. The ABCD may decide to either dismiss the matter or offer counseling to the actuary. If the ABCD conducts a hearing, the hearing might lead to dismissal, counseling, or a recommendation (to the subject actuary's membership organizations) for disciplinary action: private reprimand, public reprimand, suspension, or expulsion. As a result, the subject actuary can expect the proceedings to be confidential unless the membership organizations decide on public reprimand, suspension, or expulsion.
Generally, this confidentiality is a very good thing and protects the rights of the subject actuary. But in some cases the rule of confidentiality may be abused. Two such cases are identified below.
First, an actuary who is the subject to an ABCD inquiry might actually want the matter to be made public. Article 10, Section 9(C) of Academy By-laws permits the ABCD to accept a waiver of confidentiality from a subject actuary and then disclose what would otherwise be confidential information, "subject to such terms and conditions as the ABCD deems necessary to protect the confidentiality rights of other parties and the integrity of the ABCD process. " This clause was added effective January 1, 1999 and gives the subject actuary an important option. Six years ago a subject actuary who thought he was being treated unfairly by the ABCD signed a waiver of confidentiality and requested that a representative of The Actuarial Review attend his hearing to witness the events, but this was disallowed under the rules then in place. The primary reason to maintain confidentiality of the ABCD process is to protect the subject actuary. One hopes the ABCD will make every effort to open the process to the public if requested by a subject actuary, and will not adhere to confidentiality in order to protect the ABCD process from public scrutiny.
Second, some violations of the Code of Professional Conduct may be made in such a way that the only proper response from the profession is a public announcement of the ABCD's decision, even if the decision is limited to counseling. For example, consider the case of an actuary who makes a public statement, quoted in the national press, that violates professional conduct and embarrasses the actuarial profession. Although such cases may be rare, they have happened at least once and will probably happen again. In these cases, where the offending conduct is made in a broad public forum, the action of the ABCD should likewise be made public. This is the only way to ensure our members and the public that the profession is serious about our Code of Professional Conduct.
Confidentiality should be an important element of the ABCD process, but it is not sacred. There are times when its value is overshadowed by the need to open the ABCD process to the public.