- Information contained in the Guidance
- Who should use the Guidance
- The public interest
- The structure of the Code
- Departures from the Code
1.1 The Institute and Faculty of Actuaries (IFoA) is responsible for the regulation of the actuarial profession in the public interest. As part of its regulatory function, it also sets and maintains a framework of standards for its Members. Members of the IFoA must comply with those standards as a condition of membership.
1.2 Central to the IFoA’s framework of standards is its overarching ethical code, known as the Actuaries’ Code (the Code), which was first published in 2009. The framework also contains Actuarial Profession Standards (APSs), which apply specific requirements to Members, building on the principles of the Code, as well as non-mandatory guidance and resource material designed to assist Members in meeting their professional obligations. For Members carrying out UK work, there are also Technical Actuarial Standards (TASs) set by the UK’s Financial Reporting Council (FRC) and enforced by the IFoA.
1.3 This Guidance has been prepared by the Actuaries’ Code Working Party, and is issued by the Regulation Board of the IFoA. Its purpose is to aid Members’ understanding of the requirements of the Code and help them meet their ethical and professional responsibilities under it.
Information contained in the Guidance
1.4 The Guidance contains information about each of the six principles contained within the Code, as well as its application, scope and status and purpose. Separate, more detailed guidance also exists on a number of specific topics that are strongly connected with the requirements of the Code, for example on conflicts of interest. The IFoA’s full suite of non-mandatory guidance can be found on the IFoA’s website.1
1.5 Each of the principles contained within the Code is accorded equal importance. The length and/or level of detail of the guidance provided for each of the principles does not, therefore, mean that any one principle is more or less important than another.
1.6 It is hoped that this Guidance will be a useful tool for Members who find themselves facing ethical issues and are considering how to handle them appropriately and professionally. It is not prescriptive in relation to how Members should apply the Code, but rather aims to help Members to use their own judgement in determining how to comply with its provisions. The Guidance is only an indicator of relevant considerations and therefore a departure from the approach suggested may in some circumstances be appropriate, provided the conduct is reasonable and the Member is able to explain and justify the approach they have taken.
Who should use the Guidance?
1.7 It is anticipated that this Guidance will be used mainly by Members. However, it also contains information that may be useful for people who work with actuaries (including employers of Members). Separate guides also exist for employers of Members on particular topics, including Conflicts of Interest.2
1.8 Given the variety of matters which are covered in this Guidance, and given that it is designed to be useful for Members in all practice areas, the Guidance is, of necessity, intentionally broad and is not restricted to any one practice area. Members are encouraged to consider how the general principles discussed in this Guidance might be applied to issues arising in their particular area of practice since the issues and application will vary between areas.
1.11 This Guidance does not constitute legal advice. While care has been taken to ensure that it is accurate, up to date and useful, the IFoA will not accept any legal liability in relation to its content.
1.12. Non-compliance with the Code may lead to Members becoming liable to disciplinary action. While this Guidance may be referred to and considered in the course of disciplinary proceedings, it will not necessarily provide a defence to allegations of misconduct.
2. The Code – application, scope and status and purpose
2.1 The Code applies to all categories of Members without exception (i.e. it applies to Students, Student Actuarial Analysts, Certified Actuarial Analysts, Affiliates, Associates, Fellows and Honorary Fellows).
2.2 The Code has no geographic restrictions and applies to Members in all locations and in relation to work carried out in respect of any part of the world.
2.3 The Code applies regardless of the nature of a Member’s client or employer or of their employment status. This means that the Code would apply to an unemployed or retired Member, as well as those on maternity or other parental leave.
2.4 The Code applies at all times to all Members’ conduct in relation to an actuarial role. The Code does not define an ‘actuarial role’ so it is for an individual Member to determine if they are carrying out an actuarial role for these purposes.
2.5 The sort of circumstances that point to a role being an ‘actuarial role’ might include whether Members, users or the general public could reasonably perceive the role as being actuarial. This is likely to include work for a traditional employer of actuaries (such as a pension scheme or an insurance company) but would also include other instances, including honorary and business roles, where:
- a Member is performing a role that requires, or benefits from, specific actuarial skills, for example, a Member employed (either directly or as an external adviser) by the trustees or sponsor of a pension scheme to assist in the management of the pension scheme, or where a Member is appointed to an honorary role in light of their numerical, analytical and other professional skills;
- a Member is performing a role in which they have presented themselves as an actuary, for example, by signing off correspondence with the letters ‘FIA’ or ‘FFA’ after their name or having been appointed or elected as a result of their IFoA membership; or
- reliance is placed on a Member’s actuarial judgement due to their membership of the IFoA, for example, where a Member is appointed to a governing body by reason of their actuarial experience and expertise and where the use of that experience and actuarial expertise is explicitly relied upon.
2.6 The Code also applies to all Members’ other conduct if that conduct could reasonably be considered to reflect upon the profession. This means conduct by a Member that may have an impact upon the reputation of the actuarial profession as a whole, even if that conduct occurs outside of a Member’s actuarial professional life.
2.7 In most cases, it will be clear whether or not a course of conduct is likely to be considered to reflect on the profession. An example of this could be where a Member commits a serious criminal offence.3
2.8 Examples of ‘other’ conduct might include conduct where a Member is:
- discussing matters outside of a professional context, but where their opinion might be given more weight because of their membership of the IFoA or their qualifications;
- carrying out an honorary, volunteer or business role such as acting as a trustee or the treasurer or board member of a charitable foundation or acting as a Non-Executive Director to the board of an insurance company (Members ought to ensure however that the precise terms of their engagement are clearly set out for these types of roles, as being asked to provide actuarial advice in the course of their appointment may subsequently bring their work into the scope of an ‘actuarial role’); or
- doing something else that has nothing to do with actuarial work as such, but where they are clearly identifiable, or are subsequently identified, as actuaries and an observer might be inclined to take their behaviour as representative of actuaries more generally (for example where a Member is posting comments on social media that are bullying or threatening in circumstances where they have identified themselves as an actuary, or could easily be identified as an actuary).
2.9 The IFoA is incorporated by Royal Charter. Amongst other things, the Charter defines the IFoA’s purpose as the regulation of the actuarial profession in the public interest. The IFoA sets appropriate standards, and requires Members to comply with them, in order to promote high quality actuarial work and ensure that Members maintain a high standard of professionalism and ethics.
2.10 There is no specific obligation imposed upon Members to consider the public interest impact in respect of the work that they carry out, or in their day-to-day conduct. Rather, by acting in accordance with the standards set by the IFoA, including the Code, Members will be helping the IFoA to ensure that it succeeds in meeting its wider public interest aims.
The structure of the Code
2.11 The Code contains six principles which are shown in italics. Those six principles are supported by ‘amplifications’ that clarify specific requirements of the principles for some particular issues. Members must comply with both the principles and the amplifications. The amplifications are not intended to be read as exhaustive lists of types of behaviours that fall under the principles themselves; the principles go further than the amplifications that support them. Rather, they are intended to highlight some specific requirements that the IFoA considers particularly important for Members to follow.
2.12 The Code uses the words ‘must’ and ‘should’ to clarify the level of obligation in relation to each of the provisions in the Code. The word “must” denotes a mandatory requirement, whereas the word “should” is used in the Code to indicate that, while there is a general presumption that Members will comply with the provision in question, there will be situations in which non-compliance with one or more of the requirements within the Code may be justified; for example, situations in which a Member is complying with a legal requirement to report which is at odds with amplification 1.2 of the Code which deals with confidentiality.
2.13 The term ‘user’ is not defined within the Code and is used in a range of different contexts. Members are therefore expected to exercise professional judgement in determining the relevant user for each piece of work, depending on the particular circumstances in which it has been instructed. Members have to take into account the relevant user in considering how each requirement under the Code should be interpreted for that piece of work.. The appropriate interpretation of references to “user” in this Guidance and the Code may differ depending on (i) the particular principle or amplification to which is being referred; and (ii) the particular circumstances to which it is being applied.
2.14 In determining the user of a piece of work, relevant factors to consider might include (but are not limited to):
- who it is that has instructed the Member to carry out the piece of work and the nature of the instruction;
- who it is the piece of information or advice is being produced for (recognising that this may not always be the same as the party instructing the work);
- the scope and purpose of the proposed work; and
- who is likely to be relying on the piece of work in order to make decisions.
2.15 Members are reminded that the use of and reliance on actuarial information or advice is not always confined to those commissioning its preparation; the users of a piece of work may therefore potentially extend to a wide range of groups, for example, insurance policyholders or pension scheme members who are not a Member’s direct clients, but are stakeholders in the Member’s work.
2.16 Often, the ultimate user of a piece of work will be someone other than the person who has instructed the Member to carry it out. Where Members are contributing to a larger piece of work involving other Members or other professionals, they are encouraged, where appropriate, to discuss at an early stage who the user of their work is likely to be.
2.17 Members may note that the word ‘user’ is also used in certain APSs produced by the IFoA, as well as in standards and guidance developed by other actuarial organisations or regulators, for example the FRC in its TASs. Where this is the case and the word ‘user’ has been given a specific definition within a particular standard, Members are reminded that this will not necessarily carry the same meaning as ‘user’ within the context of the Code, where the word is given its natural meaning and is intended to be used broadly.
2.18 Failure by a Member to comply with the ethical requirements set out in the Code may lead to disciplinary proceedings under the IFoA’s Disciplinary and Capacity for Membership Schemes.4
2.19 The IFoA considers allegations that an individual Member (or former Member) is guilty of Misconduct or that their capacity to be a Member is impaired. The question of whether a Member’s conduct amounts to ‘Misconduct’ for the purposes of the Disciplinary Scheme will be one for an Adjudication Panel or Disciplinary Tribunal Panel to determine, taking into account the particular facts and circumstances of each case.5 The question of whether a Member’s capacity to be a member of the IFoA is impaired for the purposes of the Capacity for Membership Scheme will be a matter for a Capacity for Membership Panel to determine.
2.20 The final paragraph within the ‘Status and Purpose’ section of the Code reminds Members that nothing in the Code is intended to require them to act in breach of legal requirements. This means that a Member will not be treated as having breached the Code if they are complying with a legal obligation, even where there is an apparent conflict between that legal obligation and any requirement(s) set out in the Code. Section 7 of this Guidance, which provides guidance on the ‘Speaking Up’ Principle, contains some specific examples of when such a conflict might occur.
2.21 The reference to ‘legal requirements’ in the ‘Status and Purpose’ section of the Code is intended to cover requirements imposed by legislation, regulation or the common law. It does not extend to contractual provisions agreed with a user or provisions imposed by a Member’s employer, which seek to prevent the Member from complying with the Code or other legal or regulatory requirements. It is not possible to contract out of complying with the Code and Members will need to bear this in mind when entering into contracts that have provisions relating to confidentiality.
 There are specific requirements imposed upon Members in Principle 4 of the Code (Compliance) and through the Disciplinary and Capacity for Membership Schemes, both of which require notification to the IFoA of criminal convictions.
The FRC also operates a disciplinary scheme for the actuarial profession. The FRC’s Actuarial Scheme undertakes the investigation and prosecution of cases which raise or appear to raise important issues affecting the public interest in the UK. You can find out more about the FRC’s Actuarial Scheme here - https://www.frc.org.uk/auditors/enforcement-division/actuarial-scheme
 There is further information available on the IFoA’s website which provides practical information about the meaning of Misconduct in the context of the Disciplinary and Capacity for Membership Schemes: https://www.actuaries.org.uk/documents/safeguarding-public-interest-faqs
Filter or search events
CILA is one of the pre-eminent events in the annual 'Life' calendar. Due to COVID-19 we are running the programme as a series of webinars covering topics aimed at practicing life actuaries from life offices, consulting firms and other employers of actuaries and those who work in or advise on, the life assurance market in the UK and Europe.
Current Issues in Life Assurance - For annuity writers, a key challenge is the need to fund capital-consumptive new business strain (NBS) as a consequence of writing the business intended to fund future distributions. Reinsurance, investment strategy and capital provision all have roles to play which we will investigate in this webinar
Current Issues in Life Assurance – Mortality in 2020 is now dominated by one thing, although – in our future-focused world – the pandemic is just one of many mortality considerations. In this session, three well-regarded mortality/longevity specialists provide an overview of implications and impacts of COVID-19, recent and imminent CMI developments and more 'future focused' work in the MRSC
Because of Covid-19, forecasters predict a severe recession in 2020, followed by a V or U-shaped recovery. This impacts both individuals and companies. However, compared to previous recessions, the impact on banks of higher credit losses should be mitigated to some extent by government actions.
Part of the Protection, Health and Care Conference 2020 webinar series
This session will provide an overview of the Population Health Management Working Party's research including defining impactability and impactability modelling, discussing some examples of specific modelling approaches, considering the practical challenges across the NHS as well as wider public perception and ethical issues.
Many actuaries consider career opportunities in the Finance and Investment practice area after having started off in more traditional actuarial roles such as valuations, capital management or pricing. This session is aimed at helping actuaries to better understand roles in Finance and Investment and how they can fine tune their skills to pursue such careers.
Due to COVID-19, we are running this programme via a series of webinars commencing 22nd July.
This webinar series will provide topical and practical updates and discussion on the latest thinking and innovations in mortality and longevity, and is designed to be very accessible to a broad range of experience.
Insurers are making increasing use of medical research to help with assumption, models and underwriting. Experienced mortality/ longevity specialists discuss the issues in the interpretation of medical research papers, using a range of case studies. The case studies will include COVID-19 points of current importance. Many of the concepts discussed (data bias, inference of causation) are also applicable to equivalent questions in 'big data' and advanced analytics.
Members of the Mortality Working Group of the IAA have analysed changes in mortality for about 30 causes of death and will discuss how causes of death are classified, and the problems of long-term data, appropriate metrics, including "years of life lost" (YLL), causes of death - a "measure of cohortness", the changes in dominant causes of death at older ages, and how can these types of studies enhance mortality forecasting.
Predictive risk assessment and risk stratification models based on postcode-level consumer classification are widely used for life insurance underwriting. However, these are socio-economic models not directly related to health information. Similar to precision medicine, precision life insurance should aim to tailor policy pricing/reserving to the individual health characteristics of each client.
The aim of this webinar is to provide an overview of research undertaken within the Data Science Working Party on applying machine learning methods for sentiment analysis and opinion mining of UK Twitter data relating to COVID-19.
This discussion, the fourth in the Extreme Mortality Events webinar series, will look at what poor model selection and calibration could look like – using inappropriate historical data; using incorrect 2020 mortality data; and inappropriate stochastic model recalibration (or lack thereof). Presented by Chair of the Life Board of the Institute and Faculty of Actuaries, Colin Dutkiewicz.
This webinar has been re-scheduled from its original date of the 1st July. Although ESG has many buyers across the asset allocation community, from pension funds to sovereign wealth funds, it still hasn’t found its place within the core asset management strategy desks where the money is actually invested. The problem as well as the opportunity is Fixed Income. Plenty of strategies exist for incorporating ESG within Equities, from screening, integration to a combination. ESG has picked up relatively quickly within Equities with rating,indices created using ESG factors. This talk will discuss how we price a quantifiable ESG credit risk premium and make it alpha worthy in a strategy.
Over the past decades, many countries have exhibited mortality rates approximately following a piecewise linear law. This is visible in the form of steady improvements over multiple years, followed by a rather abrupt trend change, and then again stable improvements according to the new trend.
Part of the Protection, Health and Care Conference 2020 webinar series
With the rising prevalence of dementia, how can we manage this risk effectively and can insurance do more? Matt Singleton, Ageing Lead at Swiss Re, will cover these topics and demonstrate how insurance could help people address their concerns.
Current Issues in Life Assurance – Join us for an exploration session on the use of data science in insurance companies today including how insurers are making sense of and using new data sources and technologies, exploration of practical applications of data science within actuarial work, benefits of data-driven decisions to solve business problems using the power of data and technology, and the role that actuaries can play to harness the benefits of data science.
Current Issues in Life Assurance
This talk will look at a range of such techniques (e.g. mass lapse risk transfer, contract boundaries, risk margin relief, non-standard longevity risk transfer) that have been applied or considered by UK and EU insurers, and the pros and cons of each.
Current Issues in Life Assurance.
The International Association of Insurance Supervisors announced on 14 November 2019 the adoption of v2.0 of the global Insurance Capital Standard (ICS) which will undergo confidential reporting for 5 years starting from 2020. This session will include specific experiences from Legal and General (L&G) as well as global industry perspectives from EY.
Current Issues in Life Assurance
This session will cover the PRA supervisory statement on financial impacts related to climate change, industry insights into PRA climate risk business plans, examples climate risk strategy setting out key workstreams and activity steps for successful execution, an overview of a climate risk strategy execution timeline and the future.
On 25 June the International Accounting Standards Board published Amendments to IFRS 17, the Insurance Contracts global accounting standard effective 1 January 2023.
Part of the Protection, Health and Care Conference 2020 webinar series
This session will cover how we have challenged conventional approaches to underwriting and risk selection in order to develop an approach that aligns current practices, customer and broader interests with robust risk assessment.
Part of the Protection, Health and Care Conference 2020 webinar series. Using new and unique research and data from the UK, US, Sweden and China, this presentation investigates how consumers use the internet through their insurance journey and analyzes the role culture and generation plays in their online behaviour. We use this research to show the online landscape for insurance sales in the UK and suggest ways to shape new products and effectively engage with the consumer who is buying them.
Chief Medical Officer (CMO) for Gen Re Life/Health Research and Development, Dr John O'Brien, will discuss the impacts of Gene Modification for life/health insurance.
Our presentation will examine the challenges arising in setting mortality improvement assumptions, exposing known but under-explored vulnerabilities of current practices.
As an industry, it has been important to be able to look to the future to identify the next quantifiable risk. In this session, I will explore some of the less tangible, but none-the-less concerning risks to future health, such as the health risks associated with exposure to pesticides, ingestion of plastic in the food chain, and the hazards of indoor air pollution through exposure to volatile organic compounds.
The working party will help the industry to update and enhance how potential risk from diabetes and excess mortality is considered, including the need to understand the underwriting implications as treatments improve, and potentially to develop new products that are tailored to those with diabetes.
This event is now fully booked. To join the wait list, please register here.
A Trusted Profession
Part of the Protection, Health and Care Conference 2020 webinar series. Modelling the structure and trends of cancer morbidity risk is important for pricing and reserving in related health insurance fields such as critical illness insurance and care provision. We model the dynamics of cancer incidence over time in different regions in England, using 1981-2016 ONS data. The modelling allows estimation of cancer rates at various age, year, gender and region levels, following a Bayesian setting to account for statistical uncertainty. Our analysis indicates significant regional variation in cancer incidence rates.
Part of the Protection, Health and Care Conference 2020 webinar series. In this talk we will outline the steps Aviva took in pulling together our first large-scale disclosures on the exposure of our business to climate change published in March 2019; in line with the recommendations of the Taskforce on Climate-related Financial Disclosures. After touching on why insurers have such an important role in climate change, we'll cover a brief “how-to” guide for those who have not yet embarked on thinking about these topics before giving a case study of how the learnings from a TCFD disclosure exercise can be applied to investment portfolios.
Part of the Protection, Health and Care Conference 2020 webinar series.
The insurance industry currently underwrites customers with diabetes based on a range of factors, medical expertise and various medical studies. The work undertaken by the Diabetes Working Party would help the industry to approach this using current research findings to update and enhance how potential risk from diabetes is considered. This includes the need to understand the underwriting implications as treatments improve, and potentially to develop new products that are tailored to those with diabetes. This webinar will present our latest findings in the management of this important chronic condition which will include research in collaboration with the ARC.