That was the intentionally shocking opening remark from Sheila Kalkunte at the CAS course on professionalism I attended this week (one of the last hurdles to clear for my ACAS). Professionalism in this context means a lot of things but for my purposes we can take it to mean doing your job competently and honestly. A bad grade here strikes home.
So who gave us the C+ and why? Having got all our attention she changed the subject, going through a fairly boring explanation of the process of the discipline hearings at the ABCD. Maybe she felt (maybe correctly) that we were all feeling pretty smug about ourselves and we needed some cold water. Fine, but what exactly is the problem? I approached her after her talk to get the real story.
First, the ABCD covers ALL actuaries, not just P&C actuaries. The real whipping boys right now are the pension actuaries who are getting swept up in the approaching annihilation of state public finances from underfunded pension liabilities (see this podcast if you’re interested).
Sheila was quick to point out that when she started in her position 8 years ago it was casualty actuaries that had the bullseye painted on their chests. This coincided with the final stages of a hard market so it’s understandable that the public was very upset with increases in premiums associated with the cyclical upswing. Perhaps we can say that normally we sweep most problems under the rug but when some degree of incompetence coincides with real costs people start pining for pounds of flesh.
The other driver is regulators. Sheila mentioned that she has attended meetings with regulators who were visibly and vocally angry about the work they receive from actuaries in rate filings. Lots of swearing, apparently. It’s ironic that the most vocal of these ‘shouters’ were apparently also actuaries who, through this behavior, were violating several precepts of the professional code themselves (act with courtesy and first contact the actuary you have a problem with directly before complaining formally to the board).
The key here is that when regulators get angry, they respond with more regulation. The threat that Sheila felt was approaching was formal government regulation of the actuarial profession which up to this point is entirely self-policing*. Sheila didn’t shed much more light on the substance of the regulators’ complaints. Perhaps, not being an actuary, she didn’t fully understand the core problem. She understands the phrase “shitty work”, though, so she’s spreading the word.
So there’s a regulatory relations problem, here, and I’m pretty irritated that I didn’t know about it and that that the CAS isn’t doing anything about it, as far as I can tell.
*I didn’t realize this and it blew my mind. Maybe this is why the profession doesn’t require some specific university degree like every other profession I know of. When government is charged with regulating a profession is their first instinct to send it to the universities? It costs something like $5,000 to become an actuary (plus all the hours of studying). It would cost SO much more if we required a degree as well. As someone who would have been denied access to the profession if this were the case, I get a cold feeling in the pit of my stomach at the thought.