Professionalism Course

1. Professionalism Course For students Tel Aviv, 29 June 2010

2. Welcome and Introductions • Israeli Association of Actuaries (Ofer Brandt) • UK Actuarial Profession (Chris Daykin)

3. Overview • Professional behaviour during the course • timely attendance expected • active participation required • please turn off mobile phones • no office business • Expectations about the course • raises questions rather than provides all the answers • a step on the road to practising as a professional

4. Aims of Course • To enable attendees to understand what is meant by professionalism in the current business climate • To understand what actions must be taken to meet the profession’s requirements • To give attendees an opportunity to reflect on issues of professionalism and discuss these with their peer group

5. Timetable 14.00 Introduction to Course objectives 14.15 Introduction to Professionalism and Corporate Governance 15.00 Code of Professional Conduct 15.45 Tea/coffee break 16.15 Professional roles for Israeli actuaries 16.45 Generic Case Studies (1) – group work 17.30 Generic Case Studies (1) – report back 18.15 Presentation of attendance certificates 18.30 Close

6. Professionalism Introduction to professionalism and corporate governance Chris Daykin

7. What we are going to cover…. • Characteristics of a profession • What do members, clients and the public gain from the existence of our profession? • What is expected of us as professional people? • In our profession: • What must we comply with? • How should we contribute? • How does corporate governance work?

8. Characteristics of a profession Some key characteristics of a profession are:

9. Characteristics of a profession 6 key characteristics of a profession are: • Members join together to apply a specialised skill • The skill has been developed through appropriate education • Members have a special relationship with those served • Recognised by the public as an authority in field of expertise, able to serve the public interest • Standards of competence and conduct of members • High level of integrity by members in exercising judgement

10. Characteristics of a profession Other characteristics of a profession may be: • fully or partially self-regulated • fulfilling some specific statutory roles • champion of research and extension of knowledge • able to discipline its members if necessary • contributor to public debate • contributing to well-being of society • member of international actuarial community (IAA)

11. Clients, Public Members What do members, clients and the public gain from the existence of our Profession?

12. Clients, Public specialist skills quality control high standards of service integrity input into public debate statutory roles What do members, clients and the public gain from the existence of our Profession?

13. Clients, Public specialist skills quality control high standards of service integrity input into public debate statutory roles anything Members agreed standards mutual support lobby strength status income else ? What do members, clients and the public gain from the existence of our Profession?

14. What is expected of us as professional people? • demonstrating, and applying appropriately, specialist skills • providing reliable up-to-date technical knowledge and advice • complying with the profession’s code of conduct • complying with legislation and with standards of practice • performing statutory roles to a high standard • behaving ethically • exercising judgement with high level of integrity • communicating well • having due regard to the interests of those affected

15. What is expected of us as professional people?(continued) • respecting and supporting others • having fiduciary relations with clients (relationship of trust) • being reliably confidential • life-long learning – developing our knowledge and skills • having no adverse disciplinary record • assisting the profession to serve the public interest • contributing to public debate • contributing to the work of the profession • having a good status and a relatively high level of income!

16. The Profession’s Controls Code of Conduct qualification standards CPD Scheme Standards of Practice Practice Certificates recommended practice educational notes disciplinary scheme In our Profession, what must we comply with?

17. The Profession’s Controls Code of Conduct qualification standards CPD Scheme Standards of Practice Practice Certificates recommended practice educational notes disciplinary scheme External Controls legislation insurance commissioner pensions regulator for UK profession: Financial Reporting Council Professional Oversight Board for Accountants and Actuaries regulation of investment activities – impact on actuaries In our Profession, what must we comply with?

18. In our Profession, how should we contribute? • becoming member of exam team • participating in Israeli Association of Actuaries, UKAP, SoA, CAS or IAA • writing a paper for, and speaking at, conferences and seminars • becoming a member of a committee • joining a working party • joining a research group Your Profession Needs You

19. Regulation of the UK Profession Financial Reporting Council (FRC) And Board Professional Oversight Board (POB) Prof Stds, Ethics, Disciplinary, Education Accountancy and Actuarial Discipline Board (AADB) Public interest cases Board for Actuarial Standards (BAS) Technical guidance notes Institute and Faculty Council

20. Regulation of the UK Profession Management Board Practice Executive Committees Professional Regulation Executive Committee Qualifications Executive Committee Committees Committees Committees

21. Our Scope • we are a profession that can provide solutions to any problem involving financial risk and contingent events, especially where quantitative techniques can be applied • we are increasingly involved in an ever widening range of businesses in which we have insight and are able to fulfil technical, advisory, managerial or directorship roles

22. life insurance general insurance pensions social security investment banking enterprise risk management health care financing corporate finance expert witness government service personal financial advice education Major Fields of Actuarial Work

23. Israeli Association of ActuariesFormed 1946 The Institute of ActuariesFormed 1848Royal Charter 1884 • to improve the status of the actuary • to promote knowledge and research • to apply actuarial methods to real problems • to promote and develop high standards

24. The Role of a Professional Body • education • quality control • research and maintaining knowledge base • professional standards and guidance • discipline of members • considering the public interest • reputation and standing of profession • influence of profession

25. International Actuarial Association (IAA) • association of associations • focus on professionalism • a global profession • development of quality and standards • core educational syllabus • responsive committee structure • sections for individual members

26. Vision of IAA To seek worldwide recognition for the actuarial profession as a major player in the decision-making process within the financial services industry, in the area of social protection and in the management of risk, for the well-being of society as a whole.

27. Executive Nominations Accreditation Advice & Assistance Financial Risk Insurance Accounting Standards Insurance Regulation Mortality Working Group Education Professionalism Pensions and Employee Benefits Social Security Supranational Relations International Education Programme Audit IAA Committees

28. IAA Sections – for individual members • ASTIN – general insurance and research • AFIR – investments and financial risk • IACA - consulting • IAAHS – health and care • PBSS – pensions, benefits and social security • LIFE – life insurance • AWB – Actuaries without borders

29. IAA activities • 30th International Congress of Actuaries, Washington DC, 30 March – 4 April 2014 • IAA Council and Committee meetings: - Vienna, Austria, 9-13 October 2010 - Sydney, Australia, 6-9 April 2011 • IACA/PBSS/IAAHS Colloquium, Edinburgh, UK, 26-27 September 2011 • ASTIN Colloquium, Madrid, Spain, 19-22 June 2011 • AFIR Colloquium, Madrid, Spain, 19-22 June 2011

30. Professionalism Introduction to actuarial codes of conduct Tel Aviv, 29 June 2010

31. Minimum Code of Conduct of IAA • Having a code of conduct meeting the IAA minimum is one of main requirements to be fulfilled before an actuarial association can be admitted as a Full Member Association of the IAA

32. Minimum Code of Conduct of IAA (a) • An actuary shall perform professional services with integrity, skill and care (client responsibility) • fulfil professional responsibility to client or employer • fiduciary relationship with client

33. Minimum Code of Conduct of IAA (b) • An actuary shall act in a manner to fulfil the profession’s responsibility to the public (common good) • uphold the reputation of the actuarial profession • not engage in false or misleading advertising or business solicitation

34. Minimum Code of Conduct of IAA (c) • An actuary shall co-operate with others serving the actuary’s client or employer • no disclosure of confidential information

35. Minimum Code of Conduct of IAA (d) • An actuary shall perform professional services only if competent and appropriately experienced • an association may permit derogations, e.g. • where client would be disadvantaged if advice denied • where actuary is working with another fully competent and experienced actuary

36. Minimum Code of Conduct of IAA (e) • An actuary is responsible for conforming to all applicable practice standards • conform to relevant binding (mandatory) practice-related guidance or standards issued or endorsed by actuary’s Association • take into account any non-binding (recommended) guidance • know the requirements of the relevant Code of Conduct

37. Minimum Code of Conduct of IAA (f) • An actuary shall, in communicating professional findings, show that he/she takes full responsibility for them • indicate whether the actuary is available to provide supplementary information and explanation

38. Minimum Code of Conduct of IAA (g) • An actuary shall, in communicating professional findings, identify the client and the capacity in which the actuary is acting

39. Minimum Code of Conduct of IAA (h) • An actuary shall not perform professional services involving the actuary in an actual or potential conflict of interest • unless ability to act is unimpaired (no inhibition); and • there has been full disclosure of actual or potential conflict • Associations may require that an actuary may only act in these circumstances if all principals have expressly agreed to it

40. Minimum Code of Conduct of IAA (i) • When asked to take on professional services previously provided by another actuary, the actuary shall consider whether it is appropriate to consult the previous provider to ensure there are no professional reasons to decline to take it on

41. Minimum Code of Conduct of IAA (j) • An actuary shall disclose to the client any sources of material income that are related to any service on behalf of the client, as soon as such a source is identified

42. Minimum Code of Conduct of IAA (k) • An actuary shall be subject to the disciplinary procedures for his/her Association and, subject to any right of appeal, shall accept any judgement passed or the decision of any appeal procedure

43. The Actuaries’ Code(Institute and Faculty of Actuaries)Chris Daykin

44. The Actuaries’ Code • principles-based • small number of principles • supported by Actuarial Profession Standards • actuaries who disregard the principles… • or operate outside their reasonable interpretation • …may be guilty of misconduct

45. The Actuaries’ Code (effective 1 October 2009) • Integrity • Competence and Care • Impartiality • Compliance • Open Communication

46. The Actuaries’ Code Integrity Members will act honestly and with the highest standards of integrity • show respect • confidentiality • honest, open and truthful

47. The Actuaries’ Code Competence and Care Members will perform their professional duties competently and with care • understand who your client is • appropriate level of knowledge and skill • care • new appointments • keep competence up to date (CPD)

48. The Actuaries’ Code Impartiality Members will not allow bias, conflict of interest, or the undue influence of others to override their professional judgement • objective and uncompromised advice • avoidance/management of conflicts of interests • consulting with previous adviser

49. The Actuaries’ Code Compliance Members will comply with all relevant legal, regulatory and professional requirements….. • challenging non-compliance • speaking up

50. The Actuaries’ Code Open Communication Members will communicate effectively and meet all applicable reporting standards • clear and appropriate communication for • the intended audience • the purpose of the communication • the significance of the communication for the audience • the capacity in which the member is acting • accurate and not misleading