A new approach to professional ethics

In last month's guest editorial I updated readers on progress with the Actuaries' Code and attendant Actuarial Profession Standards. As I noted in that editorial, we shared our thoughts on an early draft of the Actuaries' Code and invited feedback from the membership. We were delighted not only with the quality of the feedback but also the widespread support for much of the initial draft. In finalising the Code for formal exposure we took on board a lot of the suggestions, but just as importantly we drew on the feedback on the eight principles to help create the eight supporting Actuarial Profession Standards. These have now been exposed alongside the Actuaries' Code on the professions website. As with the proposed code, the supporting standards seek to be principles -based and are drafted to be concise and easily comprehensible.

A new framework

As we explained in the earlier consultation on the Code, we propose a new Actuarial Profession Standards framework comprising:

• The Actuaries' Code (the Code)
• Actuarial Profession Standards (AP Standards)
• Information and Assistance Notes (IANs)

The Code and the eight AP Standards are intended to replace the current PCS and do not impose significant additional requirements on members. In due course, other related standards will come forward to complement these initial standards, the first of which is a standard dealing with specific conflicts-of-interest issues for pensions actuaries. The chairman of the Pensions Board will issue a communication about this in the near future. Where required, standards will be further supported by IANs which will not be mandatory. We intend out framework to complement the conceptual framework for technical actuarial standards being developed by the Board for Actuarial Standards and will work co-operatively with it to achieve this.

The Actuaries' Code

The Code has been drafted as a high-level principles-based document which we hope captures the core principles of what guides us as profesionals. We have identified eight core principles, each supported by a standard.
In the feedback received there has been a broad consensus on the eight principles, although a small number suggested that we might merge one or other of the proposed principles. In particular, some people believed that Commencing Appointments was not useful of itself and might be 'distributed' between Conflicts and Conduct, while others suggested that Confidentiality afforded too much leeway for actuaries to obviate their whistleblowing responsibilities and could be dispensed with altogether. We would particularly welcome views on these two issues, both for and against.
A small number of respondents commented that they didn't like what they saw as an artifice to make all of the principles begin with C, but probably more people welcomed it as an attempt to make the principles and the Code more memorable. In fact, the Cs only emerged late in the process, and were not the basis for arriving at the Code.
A number of people questioned the move towards principles rather than rules, in part because of the lack pf prescription in principles-based regulation, but in number they were overwhelmed by those thatsupported the move. We have, however, taken on board a number of material and drafting changes to the Code and we hope that this revised version will find wide-spread favour. The Actuaries' Code can be accessed here:
ED1 The Actuaries’ Code

Actuarial Profession Standards

The 8 Standards to support the Code are now exposed for the first time. We have recognised that it is useful to have some interpretation assistance within the Standard which, although useful, will not be mandatory. Therefore we have drafted the Standards using a format where those sections in bold are mandatory whilst those sections not in bold are not. To reinforce this each of the non-mandatory sections is prefaced with For amplification. Again we hope that the membership will find this useful.

As with the Code, we have attempted to pare these Standards right back to the essential elements. This does not prevent the issuing of an IAN in the future should further assistance prove necessary. The 8 Standards can be accessed below:

• ED2 AP Standard Conduct
• ED3 AP Standard Common Good
• ED4 AP Standard Competence
• ED5 AP Standard Compliance
• ED6 AP Standard Conflicts
• ED7 AP Standard Confidentiality
• ED8 AP Standard Commencing Appointments
• ED9 AP Standard Communication

and can likewise be accessed from the homepage on the profession’s website.

Alterantively, download EXDs 1-9 in a single file below:

• EXDs 1-9 in a single file

Consultation Meetings

We hope that the Code and the Standards will be seen as a bold innovative step in the regulation of our Profession and we are keen to have a debate on these and the future shape of our regulation. As part of this exposure and debate process we have arranged consultation meetings for;

• 20 November 2007 commencing at 1700hrs at Staple Inn, High Holborn, and
• 17 December 2007 commencing at 1700hrs at Maclaurin House 18 Dublin Street, Edinburgh.

Your views

Any comments on The Actuaries’ Code or the proposed Standards should be addressed to code@actuaries.org.uk. The deadline for feedback is Friday 4th January 2008.

What will happen next?

The intention is to publish the finalised Code and the 8 Standards to be effective from 1st April 2008.

Andrew Chamberlain
Chairman Professional Affairs Board

Professional Affairs Board news, November 2007