Notice of Disciplinary Determination
On May 27, 2010, the Society of Actuaries convened a Discipline Committee to review a matter referred by the Actuarial Board for Counseling and Discipline ("ABCD"). The matter related to work performed by Jonathan Schwartz, ASA, as a consulting actuary on behalf of certain clients; namely, in preparing certain actuarial communications for his clients which provided estimates of the future cost of proposed legislation affecting public pension obligations.
The Discipline Committee determined to publicly reprimand Mr. Schwartz for material violations of Precepts 1, 3 and 4 of the Code of Professional Conduct. The Committee determined (as did the ABCD) that Mr. Schwartz's communications with his clients did not satisfy applicable Actuarial Standards of Practice (ASOPs) in that:
- In certain actuarial communications, he failed to describe any assumptions or other valuation elements on which his findings were based, and did not refer to any other document or source where those assumptions or valuation elements could be found. In this respect, he failed to comply with ASOPs 4 and 41, in violation of Precepts 3i and 4ii.
- In developing one cost estimate, he used assumptions and methods that were unreasonable, leading him to derive results that should have prompted additional scrutiny. In this respect, he failed to perform actuarial services with the skill and care required under Precept 1iii.
All members of the SOA are reminded that when they are faced with potential issues regarding professional conduct, the ABCD is available for counseling.
iPrecept 3 states, "An Actuary shall ensure that Actuarial Services performed by or under the direction of the Actuary satisfy applicable standards of practice."
iiPrecept 4 states, "An Actuary who issues an Actuarial Communication shall take appropriate steps to ensure that the Actuarial Communication is clear and appropriate to the circumstances and its intended audience and satisfies applicable standards of practice."
iiiAnnotation 1-1 of Precept 1 states, "An Actuary shall perform Actuarial Services with skill and care."