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The Actuary The magazine of the Institute & Faculty of Actuaries
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Institute of Actuaries: Disciplinary proceedings

The 1995 disciplinary scheme of the Institute requires the Institute to publish the fact of a referral by an investigating committee to the disciplinary tribunal and the nature of the complaint made. The Institute publishes such referrals in The Actuary magazine and therefore also on the magazine’s website. All cases which arose before 1 January 2004 continue to be considered under the 1995 scheme.

The material published is a summary of the charges brought against an actuary. At the referral stage all the matters included are allegations, not verdicts; nothing has yet been tested before the tribunal or found proved. Full details of any actual charges which may be found proved would be published by the tribunal or the Appeal Board as part of the final decision in the case. A ‘not guilty of misconduct’ verdict would also be published.

The Institute will not comment on individual disciplinary proceedings.

Information about the 1995 disciplinary scheme is on the actuarial profession’s website: see top of page for the address (URL).

Information about the disciplinary scheme which came into effect on 1 January 2004 can be found in the Professional Conduct section of the website under rules, regulations, and procedures.

The results of the final hearing and the decision reached will be published in The Actuary as soon as reasonably practicable. The tribunal meets in private and the hearing is not expected to take place for some months; the date has not yet been settled.

Separate charges of misconduct have been referred to a disciplinary tribunal by an investigating committee against the following members of the Institute:

  • Mr Christopher Headdon FIA
  • Mr Alan Nash FIA
  • Mr Roy Ranson FIA
  • Mr Barry Sherlock FIA

in regard to their conduct of the affairs of the Equitable Life Assurance Society [the Society” over part or all of the period 1988–2000.

It is alleged against Mr Headdon that his conduct:as the senior assistant actuary, in regard to

  • his alleged failure, on becoming aware of what appeared to be a breach by another member of the Memorandum on Professional Conduct and/or guidance notes, to take appropriate action, and alleged causing and/or contributing to the breaches by the other member; and

as the appointed actuary of the Society, in regard to

  • his alleged failure to provide full information to the board on the financial position of the Society and alleged failure to advise the board accurately on its policyholders’ reasonable expectations; and
  • the submission of an allegedly misleading and imprudent valuation report to the relevant regulator under the Insurance Companies Act 1982 in respect of the year 1997; and
  • the signing, in April 1999, of a side letter to the Society’s reinsurance agreement with ERC Frankona, which was relevant to the value attributed to such agreement in the regulatory returns, without disclosing such side letter to the regulator;

– failed to comply with guidance issued to members of the profession, and/or fell short of the standards of behaviour and/or competence and/or professional judgement and/or integrity which other actuaries or members of the public might reasonably expect of an actuary, and/or constituted a breach of the Memorandum on Professional Conduct.

It is alleged against Mr Nash that his conduct as the managing director and actuary, in regard to his

  • alleged failure to ensure that the board was properly informed and advised in circumstances where the aggregate value of the Society’s policies as reported to policyholders consistently exceeded the value of its assets; and
  • authorising and signing a letter to policyholders dated 1 February 2000, upon which policyholders were likely to rely, that allegedly misrepresented the Society’s position in the event of its appeal to the House of Lords failing;

– failed to comply with guidance issued to members of the profession, and/or fell short of the standards of behaviour and/or competence and/or professional judgement which other actuaries or members of the public might reasonably expect of an actuary, and/or constituted a breach of the Memorandum on Professional Conduct.

It is alleged against Mr Ranson that his conduct as the appointed actuary, and as the managing director and actuary, in regard to

  • his alleged failure to identify and/or monitor and/or manage the risks that the Society was running which cumulatively led to the Society being weakened and unable to meet the reasonable expectations of policyholders and alleged failure adequately to notify the Society’s board of such risks; and
  • his alleged failure to act appropriately with regard to the actuarial practices of the Society generally and the advice to the board in particular in circumstances where the value of the Society’s policies as reported to policyholders consistently exceeded the value of its assets; and
  • his alleged failure to take proper steps to ensure that the reasonable expectations of the Society’s pension policyholders as to the value of their policies were consistent with their actual value; to ensure that the board was properly advised and policyholders were properly informed in relation to the differential terminal bonus practice; and to ensure that the reasonable expectations of both GAR and non-GAR policyholders were not allowed to develop in a way which could not be met in the aggregate; and
  • the submission of allegedly misleading and imprudent valuation reports to the relevant regulator under the Insurance Companies Act 1982 in respect of the years 1994, 1995, and 1996;

– failed to comply with guidance issued to members of the profession, and/or fell short of the standards of competence and/or professional judgement and/or integrity which other actuaries or members of the public might reasonably expect of an actuary, and/or constituted a breach of the Memorandum on Professional Conduct.

It is alleged against Mr Sherlock that his conduct as the general manager and actuary, as a member of the board, and as a non-executive director, having previously been the appointed actuary of the Society, in regard to his

  • alleged failure to identify and/or monitor and/or manage the risks that the Society was running which cumulatively led to the Society being weakened and unable to meet the reasonable expectations of policyholders and alleged failure adequately to notify the Society’s board of such risks; and
  • alleged failure to act appropriately with regard to the actuarial practices of the Society generally and the advice to the board in particular, in circumstances where the aggregate value of the Society’s policies as reported to policyholders consistently exceeded the value of its assets;

– failed to comply with guidance issued to members of the profession, and/or fell short of the standards of competence and/or professional judgement which other actuaries or members of the public might reasonably expect of an actuary, and/or constituted a breach of the Memorandum on Professional Conduct.