Understanding the ABCD Inquiry Process
Professionalism Counts, October 2024
“Standards, and all the credibility they imply, have to be meaningful. Discipline will play a role, as it must; an incompetent actuary can adversely reflect on the profession as a whole. Discipline is not intended to terrorize actuaries, but to provide them with a means of filtering out the poor work that will hurt professional credibility.”[1]
The above quote is from a time when our current professionalism framework was just beginning to be established. As the architects of actuarial professionalism knew, discipline-that is, consequences for violating the profession’s standards-is essential to successful self-regulation. Thus, the Actuarial Board for Counseling and Discipline (ABCD) was established soon after the Actuarial Standards Board began issuing actuarial standards of practice (ASOPs).
The ABCD, like the ASB, resides within the Academy’s structure, but operates independently of the Academy’s Board of Directors. It serves several functions on behalf of the actuarial profession in the U.S. First, it provides counseling, answering questions from actuaries related to the profession’s standards of conduct, qualifications, and practice in an effort to prevent poor practice before it occurs. Second, it investigates complaints concerning potential violations of those standards and recommends discipline to the various actuarial member organizations, including the Academy, when appropriate.
What if you find yourself on the receiving end of a call from the ABCD, informing you that someone has lodged a complaint against you? No doubt you will experience a range of negative emotions-anger, fear, disappointment, humiliation. Take a deep breath and remember that the process is designed to be confidential and fair to actuaries who are the subject of an ABCD complaint. As a subject actuary, you will have several opportunities to explain your actions so that the ABCD can determine whether there was a material violation of the Code or simply a misunderstanding between the complainant and the actuary.
First, you will receive a copy of the complaint and an invitation to respond. This is your first opportunity to tell your side of the story, explain what you did and why, and show good faith and willingness to cooperate with the ABCD, thereby complying with Precept 14, which requires you to “respond promptly, truthfully, and fully” to requests for information from the ABCD. The ABCD will consider the complaint and your response and decide whether to dismiss the matter, investigate further, or offer mediation.
If the ABCD decides further investigation is warranted, an independent investigator will be appointed to gather information and prepare a report documenting the facts supported by evidence. This is another chance for you to cooperate and demonstrate your commitment to professionalism.
After reviewing the investigator’s report, the ABCD may decide to dismiss the complaint, offer mediation, provide counseling, or hold a fact-finding hearing. If a hearing is held, you may attend the meeting, along with counsel if desired, to provide more information and give testimony.
After the hearing, the ABCD will decide whether to dismiss the matter, provide counseling, or recommend discipline to the actuarial organizations to which you belong. Discipline may take one of four forms: private reprimand, public reprimand, suspension, or expulsion. Counseling is not considered discipline, and the ABCD may provide counseling in addition to recommending discipline. It is important to note that the ABCD does not discipline actuaries; it only recommends discipline. It is the organizations to which the actuary belongs that ultimately decide whether to discipline an actuary and what form that discipline should take.
As we have seen, the process provides subject actuaries with multiple opportunities to participate and present their side of the story. By cooperating fully with the ABCD and responding to their and the investigator’s inquiries in a timely manner, a subject actuary can make the process go more smoothly for all concerned. On the flip side, failing to cooperate in a timely manner or being combative or obstructionist can backfire on the subject actuary. The ABCD has found such actuaries to have violated Precept 14, in addition to the possible violations that sparked the investigation in the first place.
The architects of our professionalism framework knew that a disciplinary process would be necessary to discourage bad practice, uphold the standards, and preserve the reputation of the profession. They were also wise enough to create a body that provides counseling to help prevent bad practice before it occurs and that investigates potential violations of the Code in a manner that is fair to the subject actuary.
If you have questions about your practice, we encourage you to contact the ABCD with a request for guidance to reduce the possibility of inadvertently violating the Code. If the ABCD has questions about your practice, we encourage you to respond promptly, truthfully, and fully to their inquiries.
[1] Walter Rugland, Academy Vice President, in Special Supplement to the Actuarial Update, March 1984