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Effective January 1, 2001, the five U.S.-based
actuarial organizations adopted this Code of Professional Conduct. It was
adopted by the Board of Directors of the Conference of Consulting Actuaries on
October 29, 2000 and applies to all Fellows and Associates.
The Code of Professional Conduct sets forth what
it means for an actuary to act as a professional. It identifies the
responsibilities that actuaries have to the public, to their clients and
employers, and to the actuarial profession.
The Board of the Conference of Consulting
Actuaries thanks the Joint Committee on the Code of Professional Conduct for
their hard work and perseverance in drafting the Code and obtaining the approval
of all five organizations' boards.
Code of Professional Conduct (Effective January 1, 2001)
The purpose of this Code of Professional Conduct
("Code") is to require Actuaries to adhere to the high standards of
conduct, practice, and qualifications of the actuarial profession, thereby
supporting the actuarial profession in fulfilling its responsibility to the
public. An Actuary shall comply with the Code. An Actuary who commits a material
violation of the provisions of the Code shall be subject to the profession's
counseling and discipline procedures.
The Precepts of the Code identify the professional and ethical
standards with which an Actuary must comply in order to fulfill the Actuary's
responsibility to the public and to the actuarial profession. The Annotations
provide additional explanatory, educational, and advisory material on how the
Precepts are to be interpreted and applied.
In addition to this Code, an Actuary is subject to applicable
rules of professional conduct or ethical standards that have been promulgated by
a Recognized Actuarial Organization for the jurisdictions in which the Actuary
renders Actuarial Services. Actuarial Services are considered to be rendered in
the jurisdictions in which the Actuary intends them to be used unless specified
otherwise by an agreement between a Recognized Actuarial Organization for any
such jurisdiction and the organizations that have adopted the Code.
Laws may also impose obligations upon an Actuary. Where
requirements of Law conflict with the Code, the requirements of Law shall take
precedence.
An Actuary must be familiar with, and keep current with, not
only the Code, but also applicable Law and rules of professional conduct for the
jurisdictions in which the Actuary renders Actuarial Services. An Actuary is
responsible for securing translations of such Laws or rules of conduct as may be
necessary.
Definitions:
As used throughout the Code, the following terms are
capitalized and have the meanings indicated:
Actuarial Communication: A
written, electronic, or oral communication issued by an Actuary with respect
to Actuarial Services.
Actuarial Services: Professional
services provided to a Principal by an individual acting in the capacity of an
actuary. Such services include the rendering of advice, recommendations,
findings, or opinions based upon actuarial considerations.
Actuary: An individual who has
been admitted to a class of membership to which the Code applies by action of
any organization having adopted the Code. When the term "actuary" is
used without being capitalized, it refers to any individual practicing as an
actuary, regardless of organizational membership or classification.
Confidential Information:
Information not in the public domain of which an Actuary becomes aware as a
result of providing Actuarial Services to a Principal. It includes information
of a proprietary nature and information that is legally restricted from
circulation.
Law: Statutes, regulations,
judicial decisions, and other statements having legally binding authority.
Principal: A client or employer
of the Actuary.
Recognized Actuarial Organization:
An organization that has been accepted for full membership in the
International Actuarial Association or a standards setting, counseling, or
discipline body to which authority has been delegated by such an organization.
Professional
Integrity
PRECEPT 1. An Actuary shall act honestly, with integrity and
competence, and in a manner to fulfill the profession's responsibility to the
public and to uphold the reputation of the actuarial profession.
ANNOTATION 1-1. An Actuary shall perform Actuarial Services
with skill and care.
ANNOTATION 1-2. An Actuary shall not provide Actuarial
Services for any Principal if the Actuary has reason to believe that such
services may be used to violate or evade the Law or in a manner that would be
detrimental to the reputation of the actuarial profession.
ANNOTATION 1-3. An Actuary shall not use a relationship with
a third party or with a present or prospective Principal to attempt to obtain
illegal or materially improper treatment from one such party on behalf of the
other party.
ANNOTATION 1-4. An Actuary shall not engage in any
professional conduct involving dishonesty, fraud, deceit, or misrepresentation
or commit any act that reflects adversely on the actuarial profession.
Qualification
Standards
PRECEPT 2. An Actuary shall perform Actuarial Services only
when the Actuary is qualified to do so on the basis of basic and continuing
education and experience and only when the Actuary satisfies applicable
qualification standards.
ANNOTATION 2-1. It is the professional responsibility of an
Actuary to observe applicable qualification standards that have been
promulgated by a Recognized Actuarial Organization for the jurisdictions in
which the Actuary renders Actuarial Services and to keep current regarding
changes in these standards.
ANNOTATION 2-2. The absence of applicable qualification
standards for a particular type of assignment or for the jurisdictions in
which an Actuary renders Actuarial Services does not relieve the Actuary of
the responsibility to perform such Actuarial Services only when qualified to
do so in accordance with this Precept.
Standards of
Practice
PRECEPT 3. An Actuary shall ensure that Actuarial Services
performed by or under the direction of the Actuary satisfy applicable standards
of practice.
ANNOTATION 3-1. It is the professional responsibility of an
Actuary to observe applicable standards of practice that have been promulgated
by a Recognized Actuarial Organization for the jurisdictions in which the
Actuary renders Actuarial Services, and to keep current regarding changes in
these standards.
ANNOTATION 3-2. Where a question arises with regard to the
applicability of a standard of practice, or where no applicable standard
exists, an Actuary shall utilize professional judgment, taking into account
generally accepted actuarial principles and practices.
ANNOTATION 3-3. When an Actuary uses procedures that depart
materially from those set forth in an applicable standard of practice, the
Actuary must be prepared to justify the use of such procedures.
Communications and
Disclosure
PRECEPT 4. An Actuary who issues an Actuarial Communication
shall take appropriate steps to ensure that the Actuarial Communication is clear
and appropriate to the circumstances and its intended audience and satisfies
applicable standards of practice.
ANNOTATION 4-1. An Actuary who issues an Actuarial
Communication shall ensure that the Actuarial Communication clearly identifies
the Actuary as being responsible for it.
ANNOTATION 4-2. An Actuary who issues an Actuarial
Communication should indicate the extent to which the Actuary or other sources
are available to provide supplementary information and explanation.
PRECEPT 5. An Actuary who issues an Actuarial Communication
shall, as appropriate, identify the Principal(s) for whom the Actuarial
Communication is issued and describe the capacity in which the Actuary serves.
PRECEPT 6. An Actuary shall make appropriate and timely
disclosure to a present or prospective Principal of the sources of all direct
and indirect material compensation that the Actuary or the Actuary's firm has
received, or may receive, from another party in relation to an assignment for
which the Actuary has provided, or will provide, Actuarial Services for that
Principal. The disclosure of sources of material compensation that the Actuary's
firm has received, or may receive, is limited to those sources known to, or
reasonably ascertainable by, the Actuary.
ANNOTATION 6-1. An Actuary who is not financially and
organizationally independent concerning any matter related to the performance
of Actuarial Services should disclose to the Principal any pertinent
relationship that is not apparent.
ANNOTATION 6-2. An Actuary employed by a firm that operates
in multiple locations is subject to the requirement of disclosure of sources
of compensation that the Actuary's firm may receive in relation to Actuarial
Services with respect to a specific assignment for that Principal, regardless
of the location in which such compensation is received.
Conflict of
Interest
PRECEPT 7. An Actuary shall not knowingly perform Actuarial
Services involving an actual or potential conflict of interest unless:
(a) the Actuary's ability to act fairly is unimpaired;
(b) there has been disclosure of the conflict to all present
and known prospective Principals whose interests would be affected by the
conflict; and
(c) all such Principals have expressly agreed to the
performance of the Actuarial Services by the Actuary.
Control of Work
Product
PRECEPT 8. An Actuary who performs Actuarial Services shall
take reasonable steps to ensure that such services are not used to mislead other
parties.
ANNOTATION 8-1. An Actuarial Communication prepared by an
Actuary may be used by another party in a way that may influence the actions
of a third party. The Actuary should recognize the risks of misquotation,
misinterpretation, or other misuse of the Actuarial Communication and should
therefore take reasonable steps to present the Actuarial Communication clearly
and fairly and to include, as appropriate, limitations on the distribution and
utilization of the Actuarial Communication.
Confidentiality
PRECEPT 9. An Actuary shall not disclose to another party any
Confidential Information unless authorized to do so by the Principal or required
to do so by Law.
Courtesy and
Cooperation
PRECEPT 10. An Actuary shall perform Actuarial Services with
courtesy and professional respect and shall cooperate with others in the
Principal's interest.
ANNOTATION 10-1. Differences of opinion among actuaries may
arise, particularly in choices of assumptions and methods. Discussions of such
differences between an Actuary and another actuary, or in observations made by
an Actuary to a Principal on the work of another actuary, should be conducted
objectively and with courtesy and respect.
ANNOTATION 10-2. A Principal has an indisputable right to
choose a professional advisor. An Actuary may provide service to any Principal
who requests it, even though such Principal is being or has been served by
another actuary in the same matter.
ANNOTATION 10-3. An Actuary in the course of an engagement
or employment may encounter a situation such that the best interest of the
Principal would be served by the Actuary's setting out an alternative opinion
to one expressed by another actuary, together with an explanation of the
factors that lend support to the alternative opinion. Nothing in the Code
should be construed as preventing the Actuary from expressing such an
alternative opinion to the Principal.
ANNOTATION 10-4. An Actuary may be requested to advise a
Principal for whom the Actuary knows or has reasonable grounds to believe that
another actuary has provided, or is providing, Actuarial Services with respect
to the same matter. In such event, the Actuary may choose to consult with such
other actuary both to prepare adequately for the assignment and to make an
informed judgment as to whether there are circumstances involving a potential
violation of the Code that might affect acceptance of the assignment. The
Actuary should request the Principal's consent prior to such consultation.
ANNOTATION 10-5. When a Principal has given consent for a
new or additional actuary to consult with an Actuary with respect to a matter
for which the Actuary is providing or has provided Actuarial Services, the
Actuary shall cooperate in furnishing relevant information, subject to
receiving reasonable compensation for the work required to assemble and
transmit pertinent data and documents. The Actuary shall not refuse to consult
or cooperate with the prospective new or additional actuary based upon
unresolved compensation issues with the Principal unless such refusal is in
accordance with a pre-existing agreement with the Principal. The Actuary need
not provide any items of a proprietary nature, such as internal communications
or computer programs.
Advertising
PRECEPT 11. An Actuary shall not engage in any advertising or
business solicitation activities with respect to Actuarial Services that the
Actuary knows or should know are false or misleading.
ANNOTATION 11-1. Advertising and business solicitation
activities encompass all communications by whatever medium, including oral
communications, that may directly or indirectly influence any person or
organization in deciding whether there is a need for Actuarial Services or in
selecting a specific Actuary or firm to perform Actuarial Services.
Titles and
Designations
PRECEPT 12. An Actuary shall make use of membership titles and
designations of a Recognized Actuarial Organization only in a manner that
conforms to the practices authorized by that organization.
ANNOTATION 12-1. "Title" refers to any title
conferred by a Recognized Actuarial Organization related to a specific
position within that organization. "Designation" refers to a
specific reference to membership status within such organization.
Violations of the
Code of Professional Conduct
PRECEPT 13. An Actuary with knowledge of an apparent,
unresolved, material violation of the Code by another Actuary should consider
discussing the situation with the other Actuary and attempt to resolve the
apparent violation. If such discussion is not attempted or is not successful,
the Actuary shall disclose such violation to the appropriate counseling and
discipline body of the profession, except where the disclosure would be contrary
to Law or would divulge Confidential Information.
ANNOTATION 13-1. A violation of the Code is deemed to be
material if it is important or affects the outcome of a situation, as opposed
to a violation that is trivial, does not affect an outcome, or is one merely
of form.
ANNOTATION 13-2. An Actuary is not expected to discuss an
apparent, unresolved material violation of the Code with the other Actuary if
either Actuary is prohibited by Law from doing so or is acting in an
adversarial environment involving the other Actuary.
PRECEPT 14. An Actuary shall respond promptly, truthfully, and
fully to any request for information by, and cooperate fully with, an
appropriate counseling and disciplinary body of the profession in connection
with any disciplinary, counseling or other proceeding of such body relating to
the Code. The Actuary's responsibility to respond shall be subject to applicable
restrictions on Confidential Information and those imposed by Law.
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