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1、REPORT OF THE PUBLIC INTEREST TASK GROUP OF THE ACTUARIAL SOCIETY OF SOUTH AFRICAMickey Lowther, Peter Doyle, Colin Dutkiewicz, Wim Els, Jacques Malan, Ivan Missankov, Janina Slawski, Rob Thomson and Lindsay WanlissLowther M W, Independent Actuary, 8 Aloe Street, Newlands, Cape Town, South Africa 77
2、00; Tel/fax: (27) 21 683 2909; E-mail: actuarymweb.co.zaABSTRACTThis report has been compiled by a task group appointed by the Actuarial Society of South Africa (ASSA) to investigate the role that South African actuaries should play with regard to the public interest. The task group points out that
3、whatever role is agreed on must be one that all members are willing and able to execute. The authors propose that the mandatory public interest duties of individual actuaries be limited to those that can be set out in objective terms in professional conduct standards and guidance notes. Further, tha
4、t ASSA be responsible for:- ensuring that the standards include any desired public interest duties,- ensuring compliance and discipline,- a process for entering into debate with the regulator and the public, and- a process for raising issues and encouraging complaints from stakeholders.KEYWORDSPubli
5、c Interest, Professionalization.“Dont talk of love show me” Eliza Doolittle in My Fair Lady1 INTRODUCTIONThe council of the Actuarial Society of South Africa (ASSA) appointed the Task Group in March 2005. Our brief from Council was to:- define what it means when we say that the profession and its me
6、mbers have an obligation to serve the public interest,- review the concerns regarding our public interest role as raised in the Proud to be an Actuary campaign (see Annexure 1),- review what the UK and other countries actuarial professions have already done on the public interest issue, and- develop
7、 a process to ensure that concerns regarding public interest can be raised and dealt with appropriately.2 METHODOLGYSuspecting that public interest was a complex phenomenon, the task group went some way beyond Councils brief and researched a number of different aspects. The results are summarised in
8、 Section 3 below, and set out in more detail in Annexures 2 6 as follows: Annexure 2Where and when the term Public Interest appears in our literatureAnnexure 3Legal analysis of the term Public InterestAnnexure 4How other actuarial professions claim or deliver a Public Interest roleAnnexure 5How othe
9、r South African professions claim or deliver a Public Interest roleAnnexure 6The Morris ReportThe task group also distributed for comment to the broader ASSA membership a list of past events that could possibly illustrate instances where the Society had succeeded or failed in serving the public inte
10、rest.Thereafter, the task group formulated draft proposals in response to Councils brief. These proposals were exposed to the broader membership at sessional meetings in August 2005, at which no strong opposition was encountered, but several useful suggestions made (see Annexure 7). The final propos
11、als are set out in Section 4 below.3 REVIEW OF THE TOPIC3.1 Context why do professions associate themselves with the public interest?Along with many other writers on the sociology of professions, Bellis (2000) describes three legs of the process by which groups of people in an occupation professiona
12、lize a skill. The first leg is cognitive i.e. creating and developing the technical skill. The second leg is normative i.e. promising to deliver the skill according to certain standards. The third leg is organisational i.e. setting up an infrastructure to ensure that the other two legs happen. Publi
13、c interest considerations relating to individual service delivery would normally be part of the second leg, whereas public interest considerations relating to the group as a whole would normally be part of the third leg.As mentioned in Annexure 2, virtually all professions claim that their service d
14、elivery is in some way connected to the public interest. The Charter of the Institute of Actuaries (Institute of Actuaries, 2004) states only that furtherance of the Institutes objectives will be in the public interest.3.2 Defining the term public interestAnnexure 3 explores this question, but witho
15、ut going too deeply into economic, theological and philosophical theories of work and the division of labour. Even the most basic organisation of human and animal societies is usually in the interest of that society!Who is this public and who is to define and arbitrate their various interests? The U
16、K Royal Air Force has a mission “to be a force for good in the world” (Ministry of Defence, 2005). However, some of the public in the Falkland Islands and Iraq may question how individual instances of such public interest obligation are agreed on. Closer to home, the Professional Conduct Standards (
17、PCS) of the UK Actuarial Profession (Faculty & Institute, 2002) refer to an obligation to serve the public interest. However, that public is not defined, but presumably would favour British interests over, say, French interests. Since most South African actuaries are also members of the UK professio
18、n, and ASSA has adopted the UK PCS as an annexure to the South African PCS (PCSSA), does this mean that we have an obligation to serve British interests above South African ones?The (then Deputy-) President Mbeki (1998) defined the term public interest in a utilitarian way, quoting Jean-Jacques Rous
19、seau, that public interest means the highest good for the greatest majority. This is clearly the job of government as for example in the mission statement of the Royal Air Force quoted above. The International Actuarial Association (Martin, 2005) points out that actuaries are uniquely qualified to c
20、arry out regulatory and whistle-blowing roles on behalf of government provided this is clearly contracted as such.Legal practitioners have warned us of the difficulties of coming up with an acceptable definition of public interest. They also warn of the potential joint-and-several legal liability th
21、at adopting a wide definition could bring to ASSA and all its members.One possible solution is not to attempt any definition, but, in the words of Eliza Doolittle quoted above, show our commitment by our actions and not by our words.3.3 Current narrow concepts of public interest in the actuarial pro
22、fessionThe International Actuarial Association admits as national members those actuarial bodies that set and enforce acceptable professional standards and engage public policymakers. They believe (International Actuarial Association, 2004) that complying with these requirements will not be against
23、the public interest in any country.This is a rather limited claim, but perhaps appropriate to cover the norms and values of all nations. As discussed in Annexure 4, the UK actuarial profession (Faculty and Institute, 2002) take this a step forward, changing the public interest issue from a not-negat
24、ive requirement to a positive obligation. They define the term as requiring individual actuaries to observe the PCS and guidance notes, and also requiring the professional body to both engage in public debate and have a process for identifying and escalating issues that emerge in individuals day to
25、day work.Similarly, the Canadian Institute notes that their rules of professional conduct identify the professional and ethical standards with which a member must comply, and thereby serve the public interest.The Morris Review of the Actuarial Profession (2005) notes the difficulty of any broader de
26、finition of the public interest (see Annexure 6). It is “ difficult if not impossible to make public interest accountability clear, operational and effective and integrated with other accountabilities.” Morris believes that actuaries are not responsible for actions of clients who have taken their ad
27、vice. Similar views were expressed by two recent Presidents of the Institute and Faculty of Actuaries respectively. Ross (2003) stated that it was not the actuarys role to protect the public from legitimate commercial activity. Goford (2003) believed that we should act only in the interests of our c
28、lient and identified third parties.In its response to the Morris Review, the International Actuarial Association (Martin, 2005) noted that whistleblowing is a role that actuaries are skilled to fulfil if the appropriate regulatory environment is provided.3.4 Arguments around the interpretation of pu
29、blic interest for actuariesProponents of these narrow definitions offer some the following arguments:- that actuaries are not trained to identify the public interest,- that however desirable philanthropy is, it can only ever be a voluntary extra to our work,- that we should look after the interests
30、of our client (and in certain cases, also its consumers) and leave the rest to government and the regulators,- that public interest really means so much more than we can ever provide, and we cant even police the narrow version properly, and- that clause 5.1 of the UK PCS and the PCSSA require that a
31、n actuary only have regard for the interests of the client and identified third parties.Proponents of a broader definition (such as Daykin, 1995) reject the caveat emptor philosophy of the preceding arguments and offer instead some the following arguments:- that even though we may not be the conscie
32、nce of the financial services industry, we can do something towards greater equity, fairness, etc,- that we should make some attempt in our day to day work to recognise public interest issues,- that times are a-changing and increasing emphasis on good governance demands a broader definition, and eve
33、n a hypocratic oath to fulfil it,- that if we dont take a broader view, we will just be a trade,- that we mustnt destroy the goodwill built up by previous generations of actuaries, and- that there are legal and/or fiduciary requirements for actuaries to give advice in the best interests of fund memb
34、ers / policyholders / consumers over and above the interests of the actuarys client.3.5 Unique aspects of the South African environmentThe discussion thus far could apply to the actuarial profession in any capitalist economy. The task group also looked at unique aspects of the South African environm
35、ent, and whether these encourage us to adopt a broader public interest role. This work has been published as part of an editorial by Thomson (SAAJ 5, 2005) but may be summarised as follows:Firstly, a common theme in a number of African philosophies is the communitarian spirit of Africa, which expres
36、ses itself in solidarity. This paradigm has already found its way into the regulation of medical schemes, where mutuality has made way for solidarity. On the other hand, because of its western origins, actuarial science assumes that competition in a free-enterprise market is the best distributor of
37、wealth, and that individuals make decisions so as to optimise the utility of the outcomes to themselves. Do we need, therefore, an understanding of public as an integrated whole, and not as a set of individuals? Should our actions in the formal economy be guided by the needs of this complex society
38、as a whole? And if so, how do we identify such imperatives even Africanist writers such as Senghor (1975) emphasise the need for a healthy eclecticism that will avoid tying Africa to an imaginary utopia of the past.Secondly, the South African Constitution enacted in 1996 establishes a number of indi
39、vidual human rights, somewhat at odds with the communitarian nature of African philosophies. Rights to housing, healthcare, food, water, social security and education are rights that the government has to ensure but the actuarial profession may be appropriately skilled to advise on capital initiativ
40、es for their financing. Section 9 prohibits unfair discrimination, and Section 32 enshrines transparency.Thirdly, the King II Report on Corporate Governance (2002) is increasingly becoming a standard demanded by stakeholders. Similar codes are already observed in many other countries. An actuary adv
41、ising a client should be aware of these developments although a professional standard making it a requirement that the code take preference over a clients instructions would be problematical, not only to interpret, but also to enforce. 3.6 ASSAs report cardThe list distributed for comment of 24 puta
42、tive instances of ASSA or its members succeeding or failing to serve the public interest elicited some heated responses. For example, in both the area of medical scheme funding, and the appropriateness of retirement fund expenses, members held widely diverse views of what the societys public interes
43、t role should be. This exercise did not succeed in producing a list of public interest behaviours rather it showed that, even with the benefit of hindsight, it is difficult, if not impossible, to identify what behaviour is in the public interest in any particular circumstance. It was felt that these
44、 scenarios could usefully be used in seminars on professional behaviour, where the nuances could be explored. 4 PROPOSALSOur research may be summarised as follows:- a strong public interest obligation only entered our code of conduct in 2004,- the PCSSA are ambiguous by also making the clients inter
45、est sacrosanct,- the term public interest is generally acknowledged to be difficult to define,- some legal systems dont define public interest, but rather give guidance as to its implementation (as do the UK actuarial profession),- other actuarial societies and other professions have a range of appr
46、oaches to public interest, although virtually every profession makes some claim,- special circumstances that may be relevant in South Africa include the communitarian spirit of African philosophy, the SA constitution, and the King reports,- Morris sees no broad public interest role for actuaries in
47、non-reserved roles, rather he suggests that specific duties be set out in good guidance notes which are enforced, and- looking at ASSAs past record only underlines how difficult it is to identify and agree on the public interest.Our proposals are therefore as follows. Firstly, for individual actuari
48、es:- public interest duties in mandatory guidance notes must be followed (PGN 106 is a good example), and- voluntary higher public interest concerns are encouraged.Secondly, for the profession:- ASSA must review the guidance notes to include any desired public interest duties (possible role for the newly envisaged Actuarial Governance Board to give input to this review),- ASSA must ensure compliance and discipline,- ASSA needs a process for entering into debate with the regulator and the public (like the UK professions Social Policy
