Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • December 2012
12

Raising awareness of conflicts of interest

Open-access content Tuesday 22nd January 2013 — updated 5.13pm, Wednesday 29th April 2020

The Institute and Faculty of Actuaries has recently published new guidance on conflicts of interest1 for all members and included new provisions on the subject in the Actuarial Profession Standards for life and pensions2.

Along with the Actuaries' Code, this guidance is intended to help actuaries manage any conflicts that may arise. Two potential scenarios are outlined below.

l Anthony engaged you to advise on a pensions mis-selling claim and to liaise with Cleopatra Insurers Ltd to obtain compensation. You ran a very busy practice at the time and did not have time to undertake proper conflict checks within your firm before accepting the engagement. When the time came for you to claim compensation, you discovered that Marcus, another actuary in your firm, had previously advised Cleopatra Insurers Ltd on their approach to determining mis-selling compensation.

l You are a scheme actuary and act for both the trustees and the employer of the Octavian Pension Scheme. As yet, you have not provided any advice that relates to the funding of, or has a direct bearing on, the benefits payable under that scheme3, but you have provided both parties with other advice and information about the scheme over the past six months. Last month, you were asked by the employer to provide detailed advice on a particular issue that affected both parties and that enabled the employer to make an informed choice. However, the employer asked you not to provide that information to the trustees, so you didn't - after all, they're not paying your fees.

What do these two scenarios have in common? It's not just that there's an actuary involved - clearly, conflicts of interest have arisen in both cases. Using the conflicts guide, you can analyse both cases to:

l Identify (potential) conflicts correctly: whether arising from your own interests or those of different clients.

l Assess whether that conflict could prevent you from acting, or is capable of being reconciled with careful management and planning.

l If it is capable of being reconciled, identify the steps required to manage (potential) conflicts appropriately. These are likely to include the early disclosure of the (potential) conflict to the clients concerned and the agreement of an appropriately worded plan for conflict management.

Remember, conflicts do matter and they can arise at any time. Moreover, it is your professional responsibility to ensure they are identified and acted upon appropriately. This will be in the interests of both yourself and your clients.

 Read our analysis of the two cases used here as illustration and see the guidance and new provisions at bit.ly/NlVH8z


Notes

1 www.actuaries.org.uk/regulation/pages/conflicts_of_interest

2 see APS P1 'Duties and responsibilities of members undertaking work in relation to pension schemes' and APS L1 'Duties and responsibilities of life assurance actuaries'

3 see APS P1 'Duties and responsibilities of members undertaking work in relation to pension schemes' v2.0, paragraph 5.3

This article appeared in our December 2012 issue of The Actuary .
Click here to view this issue

You may also be interested in...

Actuarial Teachers' and Researchers' event boosts link between industry and academia

The University of Leicester recently hosted this year’s Actuarial Teachers’ and Researchers’ Conference. The conference was characterised by a broad range of topics and lively audience participation
Tuesday 22nd January 2013
Open-access content

Delegates get a taste for Brussels Life Conference

Paul Shelley, policy manager for the Institute and Faculty of Actuaries reports from the 2012 Life Conference in Brussels
Tuesday 22nd January 2013
Open-access content

Mortality and morbidity: tell us your views

Last year, Council identified the growing importance of longevity risk to many financial entities and the increased number of providers of demographic experience analysis. In May 2012, a working group was set up to make recommendations on how the Institute and Faculty of Actuaries should respond to the challenges and opportunities in this area.
Tuesday 22nd January 2013
Open-access content

Director of David Hume Institute addresses sell-out Autumn Lecture

Paul Shelley, policy manager for the Institute and Faculty of Actuaries reports from the 2012 Life Conference in Brussels
Tuesday 22nd January 2013
Open-access content

Longevity update: longer lived, but do we have quality and quantity of life?

Issue four of the Longevity Bulletin is now available for members to download
Tuesday 22nd January 2013
Open-access content

2012 Finlaison Medal winner

On the evening of 22 October, David Hare, presented Professor Mary Hardy with the Finlaison Medal at a sessional research meeting at London’s Staple Inn Hall.
Tuesday 22nd January 2013
Open-access content
Filed in
12
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Reserving Analyst

London (City of)
Negotiable
Reference
149485

Senior GI Modeler - Capital and Planning

London (Central)
£ excellent
Reference
149436

Risk Oversight Manager

Flexible / hybrid with a minimum of 2 days per week office-based
£ excellent
Reference
149435
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ