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The Actuary The magazine of the Institute & Faculty of Actuaries
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New discipline arrangements

The new disciplinary schemes of the Faculty and the Institute came into effect on 1 January 2004. Since then we have been busy setting up the joint infrastructure and developing new operating procedures. Arrangements are different from the past. All members of the profession should be aware of the schemes and their responsibilities under them. Even if you hope that your conduct will never be the subject of an investigation you need to know what to do if the conduct of others gives you cause for concern. In order to maintain public confidence in the profession we need to be seen to have robust processes, which deal appropriately with allegations of wrongdoing in a timely manner. More information about the schemes is given on the public part of the profession’s website, www.actuaries.org.uk, using the button on the home page for ‘Professional Conduct’.

Independence

To introduce more independence, the monitoring of our disciplinary arrangements has moved from Councils to be under the control of a Disciplinary Board. This is chaired by John Hayes, who is a lawyer with a background which includes pension regulation and the running of the Law Society. On professional disciplinary matters, as chief executive, I report to the Disciplinary Board. The Disciplinary Board has published its arrangements for publicity about cases and any guidance it has given about the operation of the scheme on the website.

The Disciplinary Appointments Committee (DAC), chaired by Leeona Dorrian, a Scottish barrister and temporary judge, is responsible for the appointment of individuals to all roles needed for the operation of the scheme, except the staff, for which I am responsible. I am secretary to the DAC. When it comes to determining cases all the panels which make the judgements will include a lay member. Following an excellent response to advertisements we ran in January we have appointed over 20 people from a variety of eminent professional backgrounds, selected by open competition, to join our disciplinary pool as lay members. On the Appeal Tribunal Panel the majority of members are not actuaries and the non-actuary members of the Appeal Tribunal Panel are appointed by other professional bodies.

Complaints

The schemes had been designed to deal with complaints, the majority of which we expect to come from other members, who are best placed to know what is going on and understand an actuary’s responsibilities under our guidance notes and professional conduct standards (PCS). All members have a duty under the PCS to tell the profession if they believe that another actuary has failed to meet our standards, and it is potentially misconduct not to do so. Any written statement making allegations about a named actuary falls under the definition of complaint even if the ‘c’ word is not used! Members cannot say ‘I am telling you about this but I don’t want to make a complaint’ – it will be treated as a complaint under the disciplinary scheme whether they like it or not. Such reports should now be sent to the disciplinary investigation team in Edinburgh and not the Professional Guidance Committee.

Proactive initiation of an investigation

The new disciplinary schemes include a process that allows an honorary secretary of the Faculty or the Institute to start an investigation where there has been no complaint, if it is considered appropriate in the public and the profession’s interests. We have been developing operating procedures for this process and these will be published on the website shortly. It is now generally recognised that we can no longer just wait for complaints but need to be proactive in making enquires into an issue where an actuary has been criticised. I expect this procedure to be used for example: where a member of the profession is convicted of an indictable offence; is the subject of proceedings by another regulator or the civil courts; or becomes implicated in misconduct by another member which is being investigated by an investigating actuary. This is, however, by no means an exhaustive list.

Response to complaints

Between 1 January and nearly the end of May no complaints were received. By the beginning of August there were six investigations under way.

The investigation on each case is carried out, confidentially, by trained staff of the profession under the direction of an investigating actuary. The member under investigation is told about the investigation as soon as it starts. The investigation establishes the facts. A case report on each complaint is passed for determination by a separate adjudication panel. If an investigation finds no evidence of misconduct and an adjudication panel determines not to proceed with any disciplinary action, there will be no disciplinary record held about the member.

The adjudication panel meets in private, but if its consideration of a case report leads to a sanction, that is published. We expect most complaints to be concluded at this stage, but as yet no adjudication panel meeting has been held. The most serious cases will be referred to a disciplinary tribunal panel for determination at a public hearing, and this panel has also not yet met.

If a matter is so serious that the investigating actuary feels that the general public need to be protected during the course of the investigation an application can be made to an interim orders panel for temporary suspension of membership.

Co-operation with an inquiry

In terms of the disciplinary schemes any member who is asked for information or documents in relation to a disciplinary investigation is required to co-operate. In fact not doing so could be ground for misconduct. They will also be expected to keep the nature of the investigation confidential to protect the member’s interests. It is a central aspect of common law that everyone is considered innocent until a determination is made against them. In our schemes this will either be by an adjudication or tribunal panel.

What you can do to help

We would still like more members to come forward to be part of the pools of investigating actuaries or the disciplinary pool. This is to ensure we always have individuals with an appropriate practice background and to ensure we can avoid conflicts of interest. Actuaries are chosen from the disciplinary pool to determine cases, as members of an adjudication, disciplinary tribunal, or interim orders panel. The panels normally comprise two actuaries and one lay member. The lay persons are all experienced in the regulation of other professions or in similar adjudication, for example, as magistrates. One actuary normally chairs each panel.

The time commitment will be indicated on a case-by-case basis and need only be a few days a year. More information about applying for these roles is given on the website at www.actuaries.org.uk/link/professional_affairs/discipline/vacancies.html.