Communications Regarding the Selection Committee - Sept. 21, 2018 - Email from CCA to AAA

 

CCA's Response to the Academy’s Letter to the CCA Dated Friday, September 14, 2018

CCA Members,

On Thursday, September 21, the CCA issued the following letter to the Board of Directors of the American Academy of Actuaries in response to their recent decision to exclude representation by the Conference of Consulting Actuaries and ACOPA from the Selection Committee for members of the Actuarial Board of Counseling and Discipline (ABCD) and the Actuarial Standards Board (ASB). Our Board is exploring other options and we will keep you informed of actions we take or any response we receive from the Academy. We welcome your comments at conference@ccactuaries.org. You may also contact CCA President John Lowell at jlowell@octoberthree.com or 770-235-8566.


Board Members of the American Academy of Actuaries

The leadership of the CCA is both dismayed and disappointed by the Academy's unilateral action to exclude representation by the Conference of Consulting Actuaries and ACOPA from the Selection Committee for members of the Actuarial Board of Counseling and Discipline (ABCD) and the Actuarial Standards Board (ASB). We would have preferred an opportunity to discuss the Academy's concerns before taking any action so that we could more fully express our position on matters and to address many of the mischaracterization of the CCA by the Academy in the communication to your members issued Friday, September 7, 2018.

We are concerned that the action by the Academy is related to the CCA's expression of concern for the nominating process of the Selection Committee that has been communicated to the Academy over the past two years and our recent decision to allow for a sub-group of our members to express their actuarial perspective on a controversial issue recently addressed by the ASB through release of a proposed Actuarial Standards of Practice and requests for comment letter. In addition, it is our view that your messages both to CCA leadership and to members of the Academy both mischaracterizes the CCA and does harm to the reputation of the profession. To wit,

  • You characterize the CCA as "active in 'supporting ... the career success of consulting actuaries'" as if this is somehow inconsistent with professionalism. To our minds, high standards of professionalism and ethics are fundamental to the career success of actuaries and our continuing education offerings play a key role in demonstrating that.
  • Does the SOA not also support the career success of actuaries? Quoting from the SOA's website: "The Society of Actuaries provides training and education that focus on technical excellence and business acumen [emphasis added]. SOA professional development programs support the full progression of an actuary's career - from student to senior actuary." Surely, if the Academy's words are intended to mean what it says, we question why the Academy would take action against the CCA and not the SOA.
  • You note that "those two" (CCA and ACOPA) take a different role from the Academy with respect to lobbying and advocacy. Surely, the Academy whose own lobbying disclosure indicates that it spent upwards of $3 million in a 10-year period (according to publicly available information) cannot claim that it neither lobbies nor advocates. That the CCA supports that its members advocate on behalf of, for example, stronger retirement systems, more innovative healthcare systems, and more useful disclosures to the public can only enhance the reputation of the US actuarial profession.
  • You castigate the CCA for supporting the commercial interests of actuaries. Other than a very limited number of actuaries who are primarily involved in research and those who are fully retired, aren't we all involved in commercial interests? That the CCA's mission allows our members to better serve their Principals and the public should be lauded not condemned. That our Communities, before issuing comment letters require input from all attendees on their conference calls speaks to the breadth and diversity of their messages not to commercial interests.
  • You note that some, in recent years have tried to advance candidates for the ABCD and ASB other than the Academy's chosen candidates. Why have the Selection Committee even bother to convene if its purpose is merely to approve the recommendations that the Academy finds appropriate? Did the Board find it inappropriate that the Selection Committee might, for example, have the opportunity to select three appointees from, perhaps, a list of six candidates rather than simply approving the three without discussion? Did the Board view it as not possible that someone on the Selection Committee might have a valid reason to not select one of the slate of nominees?
  • In fact, despite a spate of recent communications to its members trumpeting the Academy's transparency, we would view that the Academy has become increasingly less transparent over time. How can an organization whose voting process allows members to either vote for the slate of Board candidates proposed by the Nominating Committee or not vote be considered transparent? How can an organization that has made its meetings less open to members rather than more be considered transparent? How can an organization that takes steps to exclude other professionals from productive discussions be considered transparent?

In 2004, in the United Kingdom, the report from the Morris Review of the UK Actuarial Foundation was published. It was broadly considered to have determined that the actuarial profession in the UK was not capable of self-regulating. As a result, the leadership of the five major US-based actuarial organizations commissioned CRUSAP, a Critical Review of the US Actuarial Profession. Leaders of the CCA and the Academy, as well as other organizations, participated in CRUSAP. Sadly, many of the recommendations of CRUSAP were not adopted, but among those that were, with the withdrawal from the Joint Discipline Agreement last fall, the Academy signaled the end of the final remnant of CRUSAP's recommendations and successes. It was the Academy, not CCA or ACOPA, that brought an end to the professionalism-based hallmark of CRUSAP that leaders of the five actuarial organizations had spent years putting into place.

It is not the CCA that fails to have a focus on professionalism. CCA embraces every aspect of professionalism for and by our members. That some of our leaders have sought to have a more transparent and better functioning process for the Selection Committee is a poor excuse to create a charade as to why the Academy has chosen to exclude CCA from this important process.

The message that the Academy sent to its members and your letters to CCA and ACOPA became part of the public domain as soon as you put them on your website. They present our wonderful profession in a very poor light of not being able to self-police in a fair, honest, and open way. In doing so, they carelessly and recklessly present the actuarial profession in a similarly poor light to the public and demean, rather than uphold, the reputation of the actuarial profession.

Let's think about why the Academy was founded. Back in 1965, CAPP (later renamed CCA) and the SOA founded the Academy to act as a lobbying organization for those two organizations because they could not lobby.

The actuarial organizations worked separately but cooperatively for the benefit of the profession and its members for an extended period of time after that. In recent years, however, a series of unilateral decisions by the Academy through its Board of Directors have undermined that cooperation.

  • Removal of Special Directors;
  • Rendering worthless the positions of liaisons to Academy Committees;
  • Creating barriers to participation in meetings of the ASB;
  • Withdrawal from the Joint Discipline Agreement, and now;
  • Removal of CCA and ACOPA from representation on the Selection Committee.

We would encourage the Academy's Board to reconsider its decision. We would also request an opportunity to discuss the decision with representatives from the Boards of the Academy and the CCA so that we can gain a better understanding of each others concerns and offer perspectives on these issues.

Regardless of the Academy's decision to reconsider our exclusion from the Selection Committee or our offer to address your concerns in a cordial and professional manner, the CCA looks forward to working collaboratively with the Academy on issues affecting the actuarial profession. How we operate together as professional organizations, with integrity in our actions and transparency in our operations, is paramount to our ability to maintain credibility with the public and self-regulate the profession.

We look forward to your response in the coming week.

Released at the Direction of:

John Lowell, FCA
President

Ed Pudlowski, FCA
President-Elect

 

Return to Previous Page