Course on Professionalism

1
Course on Professionalism

• ASOP - Introduction

2
Outline

• Perspectives on Professions
• History of Standards
• Standards of Practice

3
Perspectives on Professions

• Essential Characteristic of a Profession
• Expertise in area where professional services are
  performed
• Requirements
• Setting selective standards for admission
• Training for the attainment of professional
  competence
• An organization to test such competence
• Standards of conduct and practice

4
Why Professions Exist

• One person cant know everything
• Need to spend years acquiring expertise in a
  given field
• Society must rely on professionals
• Since only experts in field understand the
  profession, professions must self-regulate
• Need to establish standards of practice and
  conduct in order to ensure that work products
  produced by different professionals are of a
  similarly high quality

5
History of Standards

• 1954 SOA update of Guides to Professional
  Conduct (covered only general principles
  precepts)
• 1956 Conference of Actuaries in Public
  Practice Code of Professional Conduct

6
History of Standards

• 1965 AAA formed issued its own Code
• Professional Duty
• Members responsibility to his/her principal
• Relationship with principal
• Impartiality independence
• Advertising, publicity, relations with other
  members
• Remuneration
• Use of titles
• Little direction in standards of practice

7
History of Standards

• 1970s Standards start to be developed in
  response to guides/laws issued by AICPA, NAIC,
  Federal Government, et al.
• Late 70s Emergence of the Valuation Actuary
• 1985 Interim Actuarial Standards Board (IASB)
  formed
• 1988 ASB formed given sole discretion to
  promulgate actuarial standards of practice
• Charge develop, promulgate standards
  continually review them for update needs

8
Standards of Practice

• Standards of professional performance and
  behavior
• Developed to meet the expectations of users of
  the professional services
• Provide guidance for
• Dealing with commonly encountered problems
• Handling new problems non-routine situations
• Ensure the high quality of professional services

9
Role of ASB

• Actuarial Standards Board (ASB) responsible for
  promulgating ASOPs
• ASB has exclusive authority to determine ASOP
  needs and content
• All actuaries required to observe ASOPs

10
Purpose of ASOPs

• Provide actuaries with framework for performing
  actuarial assignments
• ASOPs are principles-based do not dictate every
  step of a project
• ASOPs do not mandate a single approach, but
  rather provide guidance
• Emphasize process over outcome actuaries can
  reasonably disagree

11
Practice Areas

• Five Areas of Practice within ASB, each with
  its own operating sub-committee, charged with
  developing reviewing appropriate ASOPs
• Casualty
• Health
• Life
• Pension
• General

12
Format of Standards

• Preamble
• Purpose, scope, effective date of Standard
• Definitions of special terms
• Background historical issues
• Review of current alternate practices
• Analysis of Issues Recommended Practices
• Communications Disclosures

13
Question 1

• Which entity has discretion to promulgate
  actuarial standards of practice?
• A. CAS
• B. ASB
• C. AAA
• D. ABCD

14
Answer 1

• The correct answer is B

15
CONGRATULATIONS

• You have successfully completed this session on
  the Introduction to the ASOPs