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The Actuary The magazine of the Institute & Faculty of Actuaries
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Ethics and actuaries

I assume that ‘legal justice’ was deliberately omitted from your list of oxymorons (Editorial, April 2004) to encourage a response. I followed your recommendation and read the article at www.thesoulgym.org, but was rather disappointed that it failed to identify a simple theme for ethical behaviour, such as whether the intention were for good or for harm.

It is strange or clever that you choose this time to air the subject of ethical behaviour. My perception is that the actuaries at the Equitable, thanks to their sense of actuarial fairness, sent a letter to the GAR policyholders saying that if they didn’t opt for the guaranteed annuity they would be entitled to a higher bonus. That caring action, an excellent example of ethical business practice, proved to be the gentle butterfly whose wing-flap changed the whole weather pattern for the Equitable. Some of the recipients didn’t see the noble intention but saw people trying to cheat them. Then the matter entered the dog-eat-dog of the real world and once the Rottweilers in the legal profession got their teeth into it, wow! how matters escalated. The storm brewed, new business confidence was eroded, and finally a lightning strike from the gods at the House of Lords saw the happy community known as the Equitable truly gutted. Then along comes a report that strangely avoids the ‘whole truth’ by ignoring the controversy and contradictions in the court’s final verdict. Isn’t it amazing that the only participants that behaved with unselfish good intentions, and that met TheSoulGym’s criteria for behaving ethically, are the ones receiving all the flak. So much for recommending ethical behaviour.

I’ve always had a warm feeling about our profession, actually created for the ethical reason of ensuring fair play to life assurance participants. I agree we are not on a par with the clergy or the medical profession in the importance of our ethical purpose, but we seem ahead of the rest. The profession that has been going for centuries and still puts innocent people in jail with surprising regularity – as highlighted in my previous letter – certainly can’t claim to be motivated by ethics. I think ‘complacency’ can be added to that motley list of vices in TheSoulGym.

While our political leaders and our judges follow the precept that you never admit to a mistake, presumably well learnt from long experience, what encouragement is there for lesser mortals to address ethics and honesty?

I must say I think an investigation into the actuarial profession is an excellent move. The profession is often complaining about its low profile and, as they say, any publicity is good publicity. If Sir Derek Morris is a scientist or a businessman, then the outlook is even more promising. If he is only another lawyer, then it might be just another bookcase filler. We know the virtues of independent questioning and nothing needs it more than a judicial system that is designed to dramatise evidence rather than analyse evidence and then ignores the inevitable errors with callous detachment. A nation that lacks the political will to stop that, is hardly ready to be concerned about ethics in business.