Professionalism Counts, March 2025
ASB, ABCD Report on Their Work for You
The Actuarial Standards Board (ASB) and the Actuarial Board for Counseling and Discipline (ABCD) play vital roles in helping actuaries adhere to high standards of conduct, qualification, and practice. By doing so, they support actuaries in meeting their responsibility to the public and the profession’s ability to maintain self-regulation.
Both bodies publish annual reports to provide transparency into their work and offer important insight into key developments and trends in U.S. actuarial standards, disciplinary activity, and professional guidance. The 2024 annual reports, to be published next month, will give actuaries a clear view of their work over the past year. Here’s a recap of what they did in 2024.
ASB
The ASB sets appropriate actuarial standards of practice (ASOPs) for actuarial work in the United States. ASB committees and task forces draft new standards and revise existing ASOPs. These drafts are then reviewed by the ASB and either approved for exposure, adopted, or occasionally sent back to the task force or committee for more work.
In 2024, the ASB adopted five revised ASOPs:
▶ ERM: ASOP No. 58, Enterprise Risk Management, was adopted in December and will take effect May 1, 2025. (Several ASB members and volunteers involved in drafting ASOP No. 58 will present a webinar on the new standard on April 25. Register today.)
▶ Casualty: ASOP No. 36, Statements of Actuarial Opinion Regarding Property/Casualty Loss, Loss Adjustment Expense, or Other Reserves, was adopted in March and took effect Oct. 1.
▶ Health: ASOP No. 28, Statements of Actuarial Opinion Regarding Health Insurance Assets and Liabilities, was adopted in April and also took effect Oct. 1.
▶ Life: ASOP No. 24, Compliance with NAIC Life Insurance Illustrations Model Regulation, was adopted in September and took effect Dec. 1. ASOP No. 40, Compliance with NAIC Valuation of Life Insurance Policies Model Regulation with Respect to X Factors, was adopted in March and took effect Sept. 15.
The ASB also approved four exposure drafts. The exposure draft of ASOP No. 39, with a proposed title of Treatment of Catastrophe or Extreme Event Losses in Future Cost Estimates for Property/Casualty Risk Transfer and Risk Retention, is open for comment until June 1. Other exposure drafts approved in 2024 include ASOP No. 30, Profit Margins and Contingency Provisions in Property/Casualty Risk Transfer and Risk Retention, ASOP No. 41, Actuarial Communications, and a proposed new ASOP, Pricing Reinsurance or Similar Risk Transfer Transactions Involving Life Insurance, Annuities, or Long-Duration Health Benefit Plans. Task forces for those ASOPs are now addressing comments received.
You can find more information on other ASOPs currently being revised in the ASB’s newsletter, Boxscore.
ABCD
The ABCD has two roles: 1.) To help actuaries meet professionalism standards through the request for guidance (RFG) process, and 2.) To investigate possible violations of the Code of Professional Conduct. In 2024, the ABCD fielded 96 requests for guidance (RFGs). Half of these concerned Precept 1 (Professional Integrity). About a third of the questions involved Precept 2 (Qualifications) and Precept 3 (Standards of Practice), while a quarter involved Precept 13 (Violations of the Code).
The ABCD also handled 12 inquiries in 2024, based on either complaints or adverse information. Of those, seven were resolved. All seven involved Precept 1, notably failure to perform services with competence and failure to uphold the reputation of the actuarial profession. Four inquiries involved failure to act with integrity and work failing to satisfy an ASOP. Two involved performing work when not qualified, and one involved inadequate or inappropriate actuarial communication. Regarding the outcome of these inquiries, two were dismissed, two were dismissed with guidance, two were counseled, and one resulted in a recommendation of discipline.
A single RFG or inquiry often involves more than one precept of the Code. The most interesting sections of the ABCD annual report will provide examples of the professionalism topics raised in RFGs and inquiries, covering issues ranging from integrity, skill, and care to filing complaints with the ABCD.
Actuaries are strongly encouraged to contact the ABCD with a request for guidance when faced with an unresolved professionalism question—and required to report suspected violations. After all, it’s better to see your concern addressed through guidance than listed in next year’s inquiries!
