American Academy of Actuaries Issues Discipline Notice
WASHINGTON—The American Academy of Actuaries announced that the following discipline action became effective on June 13, 2025.
Notice of Public Discipline
(Effective Date June 13, 2025)
A Disciplinary Committee of the American Academy of Actuaries (“Academy”), acting in accordance with the Academy’s Bylaws, has reviewed the findings and a recommendation from the Actuarial Board for Counseling and Discipline (“ABCD”) regarding Mr. Jeffrey L. Smith, FCA, MAAA.
Based on the decision of the Disciplinary Committee, the Academy hereby reprimands Mr. Smith for materially failing to comply with Precepts 1, 2, 3, and 4 of the Code of Professional Conduct in connection with his preparation of actuarial opinions for a client company’s financial statement filings with a state insurance department, specifically related to the company’s issue-age, long duration Short Term Care (STC) product.
Precept 1 requires that an actuary “act honestly, with integrity and competence, and in a manner to fulfill the profession’s responsibility to the public and to uphold the reputation of the actuarial profession.” Annotation 1-1 amplifies that basic requirement, requiring actuaries to perform actuarial services “with skill and care.” Mr. Smith materially violated Precept 1 by failing to use appropriate actuarial assumptions and methodology, apply appropriate tests for reasonableness, document his work, state relevant actuarial assumptions, disclose the limitations of his analysis, and otherwise exercise appropriate skill and care when calculating statutory policy reserves and performing a gross premium valuation for his client’s STC product.
Precept 2 provides that an Actuary shall perform Actuarial Services only when the Actuary is qualified to do on the basis of basic and continuing education and experience, and only when the Actuary satisfies applicable qualifications standards. Mr. Smith materially violated Precept 2 because he did not have the appropriate level of education, experience, and knowledge necessary to appropriately calculate STC contract reserves, perform an asset adequacy analysis and render the company’s actuarial opinion on reserves.
Precept 3 requires that actuarial services “satisfy applicable standards of practice.” Precept 4 requires that actuarial communications be “clear and appropriate to the circumstances and its intended audience, and satisfy applicable standards of practice.” Mr. Smith’s actuarial work product did not satisfy applicable standards of practice relating to asset adequacy analysis, documentation, and communications of the STC actuarial analysis, thereby violating Precept 3. Further, because his actuarial communications and documentation were not produced in a manner sufficient enough for another actuary qualified in the same practice area to objectively appraise their reasonableness, they were not clear and appropriate to the circumstances and intended audience, in violation of Precept 4.
Based on the foregoing violations of the Code of Conduct, Mr. Smith is hereby reprimanded.
For more information, please contact David Mendes, director of communication and public affairs at the American Academy of Actuaries, at 202.785.7872. For more information on the American Academy of Actuaries, please visit www.actuary.org.
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The American Academy of Actuaries is a 20,000-member professional association whose mission is to serve the public and the U.S. actuarial profession. For 60 years, the Academy has assisted public policymakers on all levels by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets qualification, practice, and professionalism standards for actuaries in the United States.