Applications to the Independent Examiner. 5. Interim Order Panels. 6. Appeals Tribunal Panels. Appendix 1: Membership of
Annual Report
of the Disciplinary Board of the Institute and Faculty of Actuaries Year to 31 December 2015
February 2016
Heading Contents Leader report Chair’s text/paragraph
3
Review Body copy of the Year
4
• Body copy forward bullet Looking to 2016
8
–– Body copy second bullet
Statistical report casework –– Body copy last secondon bullet
10
• Body copy lastof bullet 1. Analysis allegations received in 2015
10
Body copy last paragraph
12
Sub 3. title Disciplinary Tribunal Panels held January - December 2015
14
2. Adjudication Panels held January - December 2015
Small sub title
4. Applications to the Independent Examiner
15
5. Interim Order Panels
15
6. Appeals Tribunal Panels
15
Appendix 1: Membership of the Board
16
Appendix 2: Disciplinary framework
18
Appendix 3: Board remit
19
How to contact the Board
20
Notes and foot notes
2
X
Chair’s report It gives me great pleasure to present my final Annual Report for the year to end December 2015 as Chair of the Institute and Faculty of Actuaries (IFoA), Disciplinary Board. During my years as Chair of the Disciplinary Board, the Board has seen a great many changes in this profession. The IFoA’s regulatory strategy has sought to meet those changes head on, both to address challenges and to help support members in identifying new opportunities. While the Disciplinary Scheme has always, rightly in my view, operated separately and independently from the main body of the IFoA, as Chair I have appreciated, and indeed enjoyed, the opportunities that have arisen to work with other Boards. In particular, the Board has worked diligently with others in the IFoA to underpin the importance of the protection of the public interest by the effective operation of our Disciplinary Scheme. I have always fervently believed that an effective disciplinary process is a key way to distinguish regulated professionals, who are prepared to put their reputations to the public test, if called upon to do so. During my tenure as Chair, my colleagues on the Regulation Board have worked alongside the Disciplinary Board to ensure that the IFoA regulatory strategy remains fit for purpose and meets the high standards that both the IFoA and the Financial Reporting Council (FRC), as the oversight body, sets itself. I am confident that my incoming successor, Keith Oliver, will take on the mantle with fresh eyes and vigour, as the 2016 Board objectives suggest. Insofar as the work of the Board in 2015 is concerned, I am particularly pleased with the progress that we made in our engagement with both our members and the general public. We achieved this both through our “raising awareness” objective and our targeted consultation which focused on the relevance and clarity of the Independent Examiner process within the Disciplinary Scheme. The responses we received have reflected the genuine interest in our work which we very much appreciate. Where feedback has contained critique of the system, I have been careful to listen to that and act where necessary and my successor will, I am sure, do the same. As in previous years, the case numbers in 2015 have been low. This means that we have no specific trends, themes or issues to report this year. We have taken comfort from the fact that levels are in line with other international actuarial regulators. However, I do not think that this is a satisfactory answer in itself. I am pleased that the Board intends to look in more detail at the level of case numbers. I look forward to reading more on the subject in the 2016 Annual Report. Finally, I would like to extend an enormous thank you to the many, many volunteers who have given their time to work with the Board over the years in a multitude of capacities within the Scheme. My retiral coincides with the retiral of a number of long-standing members of the Board over the last 24 months, and most recently, in December, Alan Botterill and Brian Duffin of this Board. The Chair of the Investigation Actuaries Pool, Andy Scott, also retires from his role in spring 2016 and I am enormously grateful to them, and to the many others who contribute conscientiously to the work of the Scheme. Please do take the time to read this report in full. If you have any comments or queries, you will find details of how to contact the Board at the end of this document. With very best wishes,
Jane Irvine Chair
3
Review of the year 2015 Objectives The Board is pleased to take this opportunity to report on its progress against the objectives which it set out at the beginning of the calendar year. We have made tangible progress on a number of matters, consistent with the IFoA’s published Regulatory Strategy, insofar as it relates to the Disciplinary Scheme. A copy of the current strategy can be found on the IFoA website.1 The following table provides a report on what has been done in relation to each objective and, where relevant, an explanation of the work which the Board still has to do. Objective 1
What we have done
Reinforce the effectiveness of the IFoA’s disciplinary arrangements, including through implementation of changes approved by Council in 2013/2014. We will continue to drive through ongoing initiatives to improve the speed and efficiency of the process and to ensure the fairness of outcomes.
The Board has approved a tightening of internal timescales for each stage of a case from start to finish. This has focussed on ensuring that the balance between thorough, fair and full investigation and speed/efficiency is protected. In 2014, the Board approved a number of initiatives designed to improve the initial investigation process. The statistics and case feedback indicate that those changes have achieved an improvement in timescales from Investigation to Adjudication Panel hearing without compromising the quality of information provided to adjudication panels. We will keep this under review to see if those timescales can be improved further. The Board has worked this year with our Lay Convener of the Disciplinary Pool to identify efficiency improvements within the Tribunal stage. As a result, we have introduced active case management to ‘front load’ procedural matters and to focus issues of dispute, as well as developing related training for Disciplinary Pool members in 2016. One of the most signficant developments for the Board this year was the use of our appeal framework and process. The process, as set out in the current Disciplinary Scheme Rules, has been tested with two appeals in 2015. The Board will carry forward this objective insofar as it relates to both appeal and tribunal work, in order to incorporate any lessons or process improvements identified.
1
www.actuaries.org.uk/upholding-standards/our-role-regulator/regulatory-strategy
4
Objective
What we have done
We will review and monitor the progress made in relation to the consistency and clarity of Panel decisions.
Throughout the year and at each meeting of the Board, the Board reviews all published decisions (known in the IFoA’s scheme as “determinations”) to ensure that the decisions are clear, logical, fair and fully reasoned. The Disciplinary Scheme does not operate on a precedent basis, but that is not to say that our members do not pay close attention to what lessons can be learned from our published determinations. We have worked with our Lay Convener of the Disciplinary Pool to develop the formation of the Charge of Misconduct at Tribunal stage and the clarity of the written determinations. These improvements have been incorporated into the development of the charge presented at Tribunal stage.
We will also monitor the clarity of communication and engagement of all users of the Scheme during investigatory stages, and implement any improvements by means of training and guidance to all of those involved in the Scheme.
Our online suite of communications, which explains what can be expected at each stage of the disciplinary process, has been given improved prominence following the launch of the IFoA’s new website. Feedback from users of the Scheme indicates that this information really does assist them in their understanding of the Scheme. Our work to identify any new areas for communication is ongoing.
We will continue to work with the Regulation Board to share issues, trends, and information relevant to the work of the respective Boards, in pursuance of both the Regulation Board’s strategic objectives and our oversight responsibility of disciplinary matters.
We met with the Regulation Board in September in addition to the regular contact which exists between both Board Chairs. At that meeting, the Boards shared views on risks which could arise to the public interest from actuarial activity which will provide useful input to the Regulation Board as part of its “risk outlook” project. We have similarly contributed a Disciplinary Board perspective on the Regulation Board’s “group think” initiative and the ongoing development by Council of a process to implement Bye-Laws 48 and 49, which provide for a mechanism to address public and member needs in circumstances of member ill health. Importantly, we discussed a Communication Protocol with the Regulation Board to ensure that the IFoA is able to respond appropriately to any disciplinary issues which are raised in the public domain. We provided input to the Regulation Board’s strategy refresh to ensure that the disciplinary elements are at the heart of the strategy. We have also provided input to the Regulation Board on our perspective in relation to its discussions with the FRC on their forthcoming actuarial regulation review. We have consulted with the Regulation Board on specific issues such as the Independent Examiner process and have taken account of its views as part of our targeted communication process.
5
Objective 2
What we have done
Building on the international knowledge gained in 2014, we will monitor the IFoA caseload in 2015 in relation to cases from outside the UK and ensure that the Disciplinary Scheme is operating effectively without geographical or cultural limitations. We will analyse member numbers and their geographic location and will monitor the location and number of disciplinary cases in order to critique any emerging patterns of behaviour. We will consider the impact of the growth of the IFoA membership internationally in relation to new categories of membership to ensure that any novel challenges, which, for example, the new Certified Actuarial Analyst category of membership poses, are reflected in our disciplinary process. Where cases arise outside of the UK, we will investigate the processes which have been undertaken to ensure that the quality of the disciplinary experience is equivalent for all members.
We have liaised with the Regulation Board on international issues to ensure that we meet the “the equivalence principle” – ie that the IFoA will seek to achieve equivalence of regulatory outcome in relation to all of its members, whether working in the UK or overseas. We analysed the disciplinary processes of the actuarial bodies where large concentrations of our members work. This exercise to date has covered India, Ireland, South Africa, and Zimbabwe, China, Hong Kong, Japan, Kenya, Malasyia and Singapore. This Board in particular examined areas of divergence in other Disciplinary Schemes from the IFoA process. This work did not identify any need for urgent reform of our Disciplinary Scheme, but it will will inform our programme of work for 2016. Through the Executive, we continue to work closely with other UK and international professional regulators to identify any international challenges in the application of our Scheme.
The Board will benchmark the IFoA Disciplinary Scheme against best practice displayed by actuarial and other relevant regulators both in the UK and abroad. 3
We will be proactive in raising awareness of the Disciplinary Scheme, its process and benefits. We will engage in a programme of communication about the Disciplinary Scheme, to improve understanding of how it works and to explain when it is the appropriate route for the general public and members who have concerns about the conduct of IFoA members.
The Executive has delivered a number of sessions to Regional Societies which have been very well received. This complements conference presentations on the Disciplinary Scheme, such as those at the Current Highlights in Pensions (CHiPs) series. These promotional sessions, focussing on promotion of the Scheme and its operation, will continue during 2016. A series of articles in The Actuary magazine has also been published which explain the key elements of the Disciplinary Scheme. We will continue to work with the Regulation Board to ensure prompt communication of the key issues and lessons that arise from relevant disciplinary cases. We oversaw the production of a video promoting the role of the Investigation Actuary which has been shown at a number of events. This video highlights the importance of the role within the Disciplinary Scheme and the opportunity it presents to IFoA members considering volunteering for this interesting and responsible position.
6
Objective
What we have done
We will actively seek views on perceived barriers to use of the Scheme.
As part of our awareness raising programme referred to above, the Board approved a programme of engagement which sought to reach out to members directly, both at their Regional Society events and the key CPD conference outlets, to maximise opportunities for members to tell us of their experience and perceptions of the Scheme. We also used our engagement and consultation on the Independent Examiner scheme as a means to obtain broader feedback from a wide range of stakeholders on what works well and what does not. We will use this feedback as a basis for our programme of work in 2016.
We will engage with members to encourage them to speak up, where they have concerns. We will review other professional bodies’ schemes in 2015 to ensure that we identify best practice and that we work to the highest standards of efficiency and effectiveness.
We also used our presentation and seminar outreach programme to let members know about their obligations to speak up and provided guidance on the most appropriate way for members to do so. We continue to promote our whistleblowing policies and remind members of their obligations under the Actuaries’ Code and more broadly through the IFoA’s Regulatory newsletters and at a variety of professionalism events. This Board supports the ongoing work of the Executive in its programme of engagement with other professional bodies, through participation in groups such as the Regulatory Forum, the Scottish Regulatory Forum, the Joint Forum on Actuarial Regulation and the Executive’s regular discussions with other actuarial regulators. We are satisfied that the Executive uses these opportunities to share best practice and to consider initiatives and improvements to the IFoA Scheme for Board debate and decision.
We will work with our IFoA offices elsewhere in the world to improve the local understanding and familiarity with our Scheme.
4
In 2014, the Board considered the role the Independent Examiner plays in the IFoA process. We carried out a full review of that role in 2015. We will complete a review of the Independent Examiner role by the end of the year giving due consideration to the advantages, risks and issues associated with the role.
7
We have commissioned and considered reports from our representatives in our Beijing, Hong Kong, Malaysia and Singapore offices to improve our understanding of the local knowledge of the IFoA Disciplinary Scheme. We were pleased to hear that IFoA representatives in Asia consider raising awareness of the IFoA’s Disciplinary Scheme to be a key part of their role in engaging with their local members.
Proposals in relation to the role of the Independent Examiner have been considered in detail over the course of the year. A targeted consultation exercise has been undertaken which has provided us with feedback to inform our course of action. After careful debate and consideration, a recommendation is being developed for presentation to Council in 2016 with our proposals for reform.
Looking forward to 2016 Against the background of progress described above, the Board has considered the specifc objectives it wishes to achieve over the course of 2016. The table below summarises those objectives and details how we intend to address them. The IFoA now has almost half of its membership based outside of the UK so monitoring international developments has become, for this Board, part of its routine oversight role. In delivering these objectives, the Board will work in tandem with the Regulation Board to deliver the IFoA Regulatory Strategy, whilst maintaining its essential independence.
1
2016 Strategic Objective
How we will tackle this
We will improve our understanding about whether the level of our case numbers is reflective of a robust disciplinary framework.
We will consider case levels in more detail, with reference to levels of awareness and use in tandem with other avenues of redress available. We will engage directly with employers to improve our understanding of the value to them of the process and seek to identify any barriers, perceived or real, which may exist. We will improve proactive identification of matters which may fall to be considered under the Scheme, by improved court alerts, and widened press monitoring. We will continue to work with users of actuarial services with the aim of evidencing that case numbers are consistent with a disciplinary scheme that is understandable, accessible and effective.
2
We will continue to develop our Scheme communication and awareness programme within the profession and more widely.
We will ensure that the obligation for timeous self reporting is highlighted to the profession as part of a wider programme, including, but not restricted to, criminal conviction reporting. We will expand our efforts to raise awareness of the Scheme to the public and employers of actuaries. We will seek to improve communication and understanding of the Scheme.
3
We will ensure the effective operation of the Scheme by concluding ongoing refinement of the Scheme, developing Tribunal operational improvements and reviewing the appeal process.
We will oversee the conclusion of our previously recommended and approved Scheme improvements following member vote. We will propose further changes to Council to implement recommendations relating to the Independent Examiner process and Bye-laws 48 and 49. We will continue to consider and review the origins, sources and levels of allegations. We will continue our training programme for pool members, legal advisers and investigation actuaries by providing targeted training. Our next scheduled training will be for the benefit of our legal adviser pool. We will review the operation of the appeal process, following the conclusion of two appeals in 2015, to ensure fitness for purpose and compatibility with the principles of good regulation.
8
4
9
2016 Strategic Objective
How we will tackle this
We will raise our profile in the international disciplinary environment by building relationships throughout our membership and we will seek to improve scrutiny of the impact of cultural and/or regional issues as they affect the Disciplinary Scheme. We will build on our understanding of actuarial regulation in an international context with a view to ensuring that the Scheme has an effective international remit.
We will build on our familiarity with international disciplinary schemes, which impact upon our members, by developing a communication and information exchange programme with other professional regulators in regions of key member activity.
Statistical report on casework Disciplinary Process outline Appendix 2 shows the overarching procedural framework within which allegations referred under the Disciplinary Scheme are dealt with. The precise process for each allegation will vary from case to case. This Board’s remit is noted at Appendix 3 and is also available online at Rule 10 of the Scheme Rules. The current Board policy (again, available online) provides for timescale expectations on the basis of complexity, and sets user and respondent expectations accordingly. The timescales of live cases do not fit easily within the Board’s 12 monthly reporting cycle. The Board’s confidential and detailed consideration of the timescales relating to individual cases over their lifecycle gives the Board confidence that expectations are being met and that improvements overall are being achieved. The following statistics provide an insight into the caseload our Disciplinary team has been involved in over the course of 2015.
1. Analysis of allegations received in 2015 Table 1 shows the number and types of allegations received since 2010. In 2015 there were 16 new non-CPD and four CPD-related allegations received (totalling 20 allegations). Six allegations were received in relation to holders of Practising Certificates (being those working in reserved roles as listed in full on our website). (See Table 2) There were two allegations relating to circumstances where an actuary acted as an expert and prepared a report in divorce proceedings. (Four such allegations were made in 2014). Three members self-reported criminal convictions; two of which related to drink driving offences. The latter two are the first such cases considered under the Scheme. In both cases there was a finding of misconduct and a reprimand was issued. In one case a fine was also imposed, due to the late reporting of the offence. Table 1 – Number of allegations reported 2010/2015 45 40
Not in Reserved Role - CPD
35
Not in Reserved Role - non CPD
30
In Reserved Role
25 20 15 10 5 0
10
2010
2011
2012
2013
2014
2015
Table 2 – Analysis of Respondents2 2010/2015 Number of Respondents In Reserved Role Not in Reserved Role
2010
2011
2012
2013
2014
2015
1
2
6
3
0
6
42
5
23
26
6
14
Table 3 reflects the practice areas of the Respondents over the last six years. The allegations considered under the Scheme may, or may not, relate to technical work carried out in that area. Table 3 – Practice area 2010/2015 All Respondents
2010
2011
2012
2013
2014
2015
Education
-
-
-
-
-
-
General Insurance
6
2
1
2
1
1
Health and Care Insurance
2
-
-
-
-
-
Investment Banking
3
-
1
1
-
-
Investment Management
5
1
1
-
-
-
Life Insurance
10
2
14
2
1
-
No information recorded
2
-
-
2
-
3
Other actuarial
2
-
2
1
-
1
Other Non-actuarial
1
-
1
2
-
-
Pensions
12
2
6
13
4
10
Student
-
-
-
6
-
4
Student – Actuarial Analyst
-
-
-
-
-
1
Retired
-
-
3
-
-
-
43
7
29
29
6
20
Total
Table 4 below outlines the main issues raised in the allegations this year. Allegations routinely contain more than one issue and so the numbers shown do not directly relate to case numbers. All six of the cases relating to an allegation of discriminatory behaviour related to the same matter and were dismissed at an early stage, using the Advisory Reports process (Rules 3.20-3.25 of the Scheme). Accordingly, no specific trends have been identified in 2015. Table 4 – Issues raised 2015 Issue
Number of instances
CPD non- compliance
4
Inadequate communication
2
Role as an expert
2
Technical incompetence
1
Discriminatory behaviour
7*
Exam cheating
2
Criminal charge/conviction
4 * Six instances arising from one allegation.
2
A Respondent for the purposes of the IFoA’s Disciplinary Scheme means an IFoA member against whom an allegation is made.
11
Table 5 shows the origin of allegations raised since 2010. In 2015 there was an increase in the number of cases referred through the Executive Referral process which was introduced in 2013 (11 cases originated in this way). Table 5 – Source of Allegations 2010/2015 Complainants
2010
2011
2012
2013
2014
2015
-
-
-
4
-
-
36*
-
7*
4*
-
-
Executive Referral**
-
-
-
1
1
11
Former employer
-
-
1
-
-
-
Institute of Actuaries of India
2
-
-
-
-
-
Members of the public
1
-
6
3
4
2
Other actuaries
2
4
15
10
1
7***
Other regulator
-
1
-
2
-
-
Other
-
-
-
2
-
-
Pensions Protection Fund
1
-
-
-
-
-
Trustees of pension schemes
-
-
-
3
-
-
43
7
29
29
6
20
Chairman - Board of Examiners Employee of the Actuarial Profession/IFoA
Total
* With the exception of one case in 2010 and one case in 2012, all of these cases were referred under the IFoA’s CPD Scheme. **
The process adopted by the IFoA in 2013 where members of IFoA staff refer cases which have come to their attention. For example, these cases may arise where a member is convicted of a serious criminal offence, where there is a failure to comply with the CPD Scheme, where a member fails to co-operate with an investigation or where another regulator or professional body raises concerns about the conduct of a member as a result of their own investigations into other matters. All self reported issues are considered under this process.
*** Six of these relate to one matter, ie an allegation from one source against six respondents.
2. Adjudication Panels held January - December 2015 Each Adjudication Panel consists of three or more persons, at least one of whom is a Lay Member, appointed from the members of the Disciplinary Pool. Typically, therefore, a Panel constitutes three members. All Panels are supported by a qualified independent legal advisor. The Adjudication Panel (by simple majority) determines whether a Case Report (summarising the result of the investigation) discloses a prima facie case of Misconduct. If so, the Panel will either: • invite the Respondent to accept that there has been Misconduct (and, where the Adjudication Panel considers it appropriate, to accept a sanction); • decide that the matter should be referred to a Disciplinary Tribunal Panel; or • decide that the Case Report discloses no prima facie case of Misconduct and that no further disciplinary action is taken against the Respondent. During 2015, five Adjudication Panels sat at which a total of 12 Case Reports and six Advisory Reports were considered. Advisory Reports are short form investigation reports which are used as an alternative to the fuller Case Report investigations, on cause shown. Of those 18 cases heard, three were from 2013, five from 2014 and 10 from 2015 (six of these were presented as Advisory Reports). Seven of the cases were in respect of members in a Reserved Role.
12
Table 6 details the outcomes of the 18 cases considered at Adjudication Panel in 2015. Table 6 – Determinations of Adjudication Panels in 2015 Determinations
Number of cases
Complaint dismissed
12
Misconduct – sanctions accepted by Respondent
5
Misconduct – sanctions not accepted by Respondent and so referred to Disciplinary Tribunal Panel
0
Panel referred to Disciplinary Tribunal Panel
1
Twelve of the 18 cases considered by Adjudication Panels in 2015 were dismissed. It may be helpful to explain this statistic against the background that the Scheme operates without an initial filter and all complaints are investigated. Six of these dismissed cases used the Advisory Report process. The remaining six dismissed cases concerned allegations of inadequate communications with clients or third parties, failure to meet deadlines, employment related issues and breach of confidentiality. The relevant Panels considered that, in each case, the actuary’s conduct fell below the threshold to establish “Misconduct,” as set out in the Scheme after full and proper consideration of all the evidence. Three of the dismissed cases were referred to the Independent Examiner; further information on these can be found under heading 4 (“Applications to the Independent Examiner”) in this section. Details of all of the cases where there were findings of Misconduct and/or which were referred to the Disciplinary Tribunal Panel can be found at the determinations page on our website3. Of the five cases where a finding of Misconduct and a sanction was accepted by the Respondent (as set out in Table 6), three related to self-reported criminal convictions (two for drink driving and one for assault). The drink driving cases both attracted a reprimand by way of sanction. A fine of £100 was awarded in one of those cases to reflect the fact that the Respondent was slow to disclose the conviction to the IFoA (eight months after conviction). A further case related to a failure to comply with CPD requirements (reprimand and £3,000 fine imposed), and the remaining case related to inadequate communication with clients concerning the progression of expert reports on divorce proceedings (reprimand and £7,000 fine imposed). In both cases, the fine imposed was relatively significant owing to the actions of the individuals concerned. The remaining case was referred directly to a Disciplinary Tribunal Panel. It related to incompetence and failure to communicate when providing a pension report in divorce proceedings. Table 7 – Sanctions applied in determinations of Adjudication Panels in 2015 Sanctions accepted by Respondent
Number of cases
Reprimand
2
Reprimand and £7,000 fine
1
Reprimand and £3,000 fine
1
Reprimand and £100 fine
1
The Disciplinary Board has set time frames within which determinations should normally be issued by Adjudication Panels as follows: • within six weeks from receipt of Case Report for dismissal or referral to a Disciplinary Tribunal Panel; and • within six further weeks where a sanction is offered, including four weeks for the Respondent (ie the actuary or actuaries about whom the complaint is made) to consider the offer and reply. Of the 13 cases dismissed at Adjudication Panel or referred to a Disciplinary Tribunal Panel, eight met and five exceeded the timescale. This includes three cases that exceeded the timescale by between two days and one week respectively.
3
www.actuaries.org.uk/upholding-standards/complaints-and-disciplinary-process/determinations
13
Of the five cases where the sanction offered by the Adjudication Panel was accepted by the Respondent, four cases were concluded within the timescale. One did not meet the timescale as a result of a delay in additional correspondence after the determination was issued. Three main issues with meeting the target time frames have been identified as follows: • complexity of cases relating to matters concerning more than one Respondent and high volumes of documents being considered; • extensions being granted for Respondents to reply; and, • balancing the need for expediency in the interests of the parties and appropriate use of IFoA resource. It is not envisaged that the first two issues are trends for the future but, overall, the Board intends to continue to monitor all cases to ensure early identification of any emerging patterns or trends. Unlike Tribunal and Appeal stages of our process, Adjudication Panels do not make awards of costs in relation to matters disposed of at this stage.
3. Disciplinary Tribunal Panels held January - December 2015 During 2015, three Disciplinary Tribunal Panel hearings were held, at which a total of five cases were considered. Three of the cases were the conclusion of hearings commenced at the end of 2014. Of those five cases, three date from 2012 and two from 2013. Two of the cases were in respect of members in a reserved role. Table 8 details the outcomes of the five cases concluded at Disciplinary Tribunal Panels in 2015. The determinations can be found in the disciplinary section of our website.4 One of these cases was referred to Appeal and is discussed later in this report. Of the three cases where misconduct was found, one case (associated to the case dismissed) considered allegations of breaches of Technical Actuarial Standards and regulatory compliance. The other two cases (where the finding was not accepted by the Respondents) related to various failures of statutory and other regulatory and competency requirements in the Respondents roles as Scheme Actuaries. Table 8 – Determinations of Disciplinary Tribunal Panels in 2014 Determinations
Number of cases
Charge dismissed
1
Finding of misconduct *
1
Misconduct – sanctions accepted by Respondent.
1
Misconduct (as of 31 December 2015, appeal period still active)
2
* This determination was ultimately overturned on appeal.
Table 9 gives details of the sanction where the sanctions was accepted by the Respondent and where the Respondents rejected the findings but where, following refusal of leave to appeal, the Respondents remain subject to those findings. Table 9 – Sanctions of Disciplinary Tribunal Panels in 2015 Sanctions accepted by Respondent £25,000 fine and period of education, including additional 25 hours CPD per year for next three years. Sanctions imposed by Disciplinary Tribunal but not accepted by Respondent* Expelled for five years
4
www.actuaries.org.uk/regulation/pages/regulationprofessional-conduct-and-disciplinedeterminations
14
Number of cases 1 Number of cases 2
Costs awards of Disciplinary Tribunal Panels in 2014 During 2015, contributions towards the IFoA costs were awarded in all five cases before the Tribunal. The awards ranged from £5,000 to two awards of £15,000 and £72,622 respectively. To date, a total of £145,324 in relation to these 2015 awards has been recovered with £5,000 due in mid January 2016 and £30,000 due by the end of February 2016. These relate to external costs for Tribunals only. The award for costs of £5,000 related to a case that was successfully appealed in December 2015. However the Appeal Panel exercised its discretion to uphold the original costs award against the Respondent, which is now due in January 2016 following the conclusion of that appeal.
4. Applications to the Independent Examiner If an Adjudication Panel decides that there is no prima facie finding of Misconduct, the person who made the allegation is entitled to refer the case to an Independent Examiner (IE) for review on the following grounds: • that the determination of the Adjudication Panel was manifestly unreasonable, inconsistent with the evidence or wrong in law; and/or • that there was injustice because of a serious procedural or other irregularity in the proceedings before the Adjudication Panel; and/or • that significant and relevant new evidence has come to light which was not previously available and could not reasonably have been made available during the investigation. This facility is not available to Respondents who, if they wish to dispute the findings of an Adjudication Panel, are able to reject the finding of that Panel and refer the matter to Disciplinary Tribunal. Three applications to the IE were made during 2015. In two cases, the decisions of the Adjudication Panels were upheld; the third case is currently being reviewed by the IE and is due early February 2016.
5. Interim Order Panels The Scheme allows for an urgent application in advance of a full Disciplinary Tribunal hearing to impose urgent restrictions on a member’s ability to practice on cause shown. No Interim Order applications were made during 2015.
6. Appeals Tribunal Panels In the event that a Respondent wishes to dispute the findings of a Disciplinary Tribunal, the Scheme has a right to appeal on cause shown. Two Appeals Tribunal Panels were held in 2015. One appeal was successful, the second determination was still pending at 31 December 2015. Both appeals were heard outside of the Board’s timescale expectations, however this is largely explained by the fact that they were the first appeals under the current scheme and required additional time to allow for the appointment of a Chair and Deputy Chair of the Appeal Tribunal Panel from the General Council of the Bar of England and Wales and the Faculty of Advocates respectively. Table 10 – Determinations of Disciplinary Appeal Panels in 2015 Determinations
Number of Cases
Misconduct quashed upon appeal
1
Awaiting determination
1
15
Appendix 1
Membership of the Board The Board operates independently of the Council of the IFoA and members of Council may not be members of the Board. The Board is composed of three lay members, including the Chair, and six Fellows. All are appointed by the Disciplinary Appointments Committee which also operates independently of the Board and of Council. The Board’s lay members during 2015 were:
Jane Irvine (Chair) Jane has specialised in resolving consumer service disputes for over 20 years, providing arbitration and adjudication decisions and mediation services to resolve disputes about a range of services. Jane has held various appointments including Lay Inspector within HM Inspectorate of Constabulary for Scotland, Scottish Legal Services Ombudsman, Chair of the Scottish Legal Complaints Commission and also chaired a working group for the Scottish Justice Minister, reviewing legislation governing police complaints and conduct issues, in preparation for the Independent Police Complaints Commission for Scotland. She was Deputy UK Pensions Ombudsman and Deputy UK Pension Protection Fund Ombudsman from 2009 to May 2015.
Nicola Wood (until June 2015) Nicola Wood started her working life as a solicitor. Since ceasing to practice law, she has held a number of board level appointments across a range of sectors including financial services and has a wide experience of alternative dispute resolution. In a pro-bono capacity she has worked with different groups of vulnerable consumers.
Keith Oliver (from June 2015) Keith is a Scottish solicitor with almost 40 years of professional business experience, 15 of which are at board level across a range of sectors. He has extensive experience of governance and constitutional matters from his time as Governor of Fettes College, Chair of Cricket Scotland and the Board of the International Cricket Council; he was awarded an OBE for his services to cricket in 2014. Keith will assume the role of Chair of the Disciplinary Board from 1 January 2016.
Athene Heynes (from September 2015) Athene is a Solicitor and was in Private Practice for many years, becoming a Partner and heading the Family Law division of the firm. In 1993, Athene was appointed by the Lord Chancellor to the Judiciary as a full-time Chair in the Tribunal Service. In 1996, the President of the Tribunal Service appointed her as National Chair of the newlyformed Child Support Appeal Tribunal. In 2005, Athene decided to retire early from full-time work. Since then, she has chaired many and varied professional regulatory committees and held chairmanships and directorships of professional disciplinary boards. 16
The Board’s actuarial members during 2015 were:
Alan Botterill FFA (retired December 2015) Alan joined Standard Life in 1977. He joined Towers Perrin in 1984 where he specialised in international benefits financial management and was the Managing Director, Europe, Middle East and Africa, for HR consulting services when he retired at the end of 2009. His service for the IFoA includes: Honorary Secretary of the Faculty, member of Faculty Council, member of the Boards of Professional Affairs, Pensions and General Insurance and currently Risk Management.
Brian Duffin FFA (retired December 2015) Brian joined Scottish Life in 1976 and qualified in 1979 as a Fellow of the Faculty. He held various posts with Scottish Life before being appointed its Group Chief Executive in 1999, subsequently becoming Executive Director of Royal London until 2007. He currently holds directorships in the insurance industry, chairs a large pension scheme, and holds other appointments, including Non-Executive Director of the Debt Management Office of HM Treasury. After serving as a tutor and as an examiner, he was a member of the Faculty Council between 1991 and 1996, also serving as Chairman of the Profession’s Public Relations Committee. Since 2009 he has been a member of the Investigations Committee of the Institute of Chartered Accountants in Scotland.
Simon Martin FIA Simon has made a valuable contribution to the profession in a variety of posts including specialising in pensions and CPD for experienced actuaries and professionalism courses for new qualifiers as a staff actuary. He was also part of the team that helped to design and implement the professionalism courses for experienced actuaries before being appointed as an Investigation Actuary. Simon was appointed Head of the Technical and Research Team, before accepting his current role as a Partner in the Retirement and Investment Business at Aon Hewitt, specialising in delivering investment advice to defined benefit pension schemes.
Alan Phillips FIA Having joined Bacon & Woodrow in 1979, Alan became a Partner in 1985 and, in 2002, a Principal at Hewitt Associates. After leading the Bacon & Woodrow office in St Albans, Alan held a number of senior leadership roles in Hewitt’s UK and European consulting business. As a Scheme Actuary, Alan has advised a wide range of companies and trustees on the spectrum of pension issues. He has previously held the post of Independent Non-Executive Chair to the Management Board of IFoA, where he was a driving force in bringing much needed commercial focus to the organisation, as well as making great strides in streamlining the governance structure.
Steve Presnell FIA Steve retired from Towers Watson (formerly Towers Perrin) after 14 years as a Scheme Actuary having previously spent 24 years with the Prudential. Steve has been a dedicated member of the IFoA, having served seven years as an Investigating Actuary for the IFoA before being appointed to the Disciplinary Board in April 2013.
Gordon Sharp FFA Gordon joined Scottish Widows in 1974 and qualified FFA in 1979. He spent most of his career in pensions and investment consultancy, with Godwins Ltd (now part of Aon Hewitt) and with KPMG. He retired from KPMG in 2013 where he was the senior professional actuary in the pensions practice. He has served in several roles in the profession, including Chairman of the Pensions Board and Chairman of the Continuous Mortality Investigation, and was a member of the Council of the Faculty.
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Appendix 2
Disciplinary framework Disciplinary Scheme: Investigation and Procedural Framework Institute and Faculty of Actuaries receives allegation (Rule 3.2) Consider referral of allegation to the Financial Reporting Council (FRC) at any stage up to when the Adjudication Panel (AP) has made it’s decision (Rule 12) Case Manager and Investigation Actuary (IA) assigned
Allegation intimated to respondent (Rule 3.4)
Consider referral to Interim Orders Panel at anytime up to Disciplinary Tribunal Panel (DTP) hearing (Rules 3.26 - 3.42) Consider submission of an Advisory Report (Rules 3.20 - 3.25) or an application to fast track the allegation to DTP using the expedited procedure (Rule 3.13). Both options can be used at any stage up to the submission of the Case Report to AP
Investigation carried out by Case Manager with input from IA as appropriate (Rules 3.7 - 3.12) Case report finalised and then reviewed by Chair/Deputy Chair of the IA Pool (Rule 3.16)
Respondent invited to indicate whether or not he/ she elects to proceed directly to a Disciplinary Tribunal Panel (Rule 3.18). (Default is AP)
Respondent does NOT elect to go direct to DTP
Case Report considered by the Adjudication Panel (Rules 4.1 - 4.15)
AP makes finding of misconduct. Respondent invited by AP to accept sanction (Rule 4.4 [a][i])
Respondent does not accept
Matter referred to DTP (Rule 4.4 [a][ii])
Respondent does elect to go direct to DTP
Preparation of Charge by the Case Manager and IA with assistance from Legal Advisor (Rules 4.16 - 4.18)
AP Dismisses the allegations (Rule 4.4 [b])
Possible application by the complainant for review by Independent Examiner (Rules 5.1 - 5.16)
Respondent given opportunity to answer Charge (Rules 6.2 - 6.9) Charge can be dismissed without hearing by DTP Hearing if charge doesn’t show prima facie case of misconduct (Rule 6.11)
No misconduct. Charge dropped (Rule 6.21)
Charge forwarded to DTP (Rules 6.11 - 6.15)
Disciplinary Tribunal Panel Hearing (Rules 6.16 - 6.22)
Misconduct established (Rule 6.21)
No sanction appropriate (Rule 6.23[a])
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Sanction imposed (Rule 6.23[b])
Possible appeal by Respondent (Rule 8)
Appendix 3 Board remit
Institute and Faculty of Actuaries Disciplinary Scheme 7. Disciplinary Board 10.1 The functions of the Disciplinary Board shall comprise: (a) overseeing the management and operation of this Scheme; (b) deciding the maximum fine which an Adjudication Panel may invite a Respondent to pay under rule 4.6(b); (c) providing bi-annual reports to the Council and such other interim reports on specific issues as it deems necessary; (d) producing an annual report to the Institute and Faculty of Actuaries; (e) setting and monitoring time frames for investigations and proceedings under this Scheme; (f) organising training of those involved in this Scheme; (g) receiving and considering reports from the IE, from any Chairman, committee, panel or tribunal appointed under this Scheme, from the FRC regarding Allegations considered under the FRC Scheme and from the Chief Executive of the IFoA on the operation of this Scheme; (h) making and varying such regulations (not being inconsistent with the provisions of the Charter, the Bye-laws, Rules or this Scheme) as it may consider necessary for the implementation of this Scheme and for the performance by Investigation Actuaries, Interim Orders Panels, Adjudication Panels, Disciplinary Tribunal Panels and Appeal Tribunal Panels of their respective functions under this Scheme; (i) providing guidance on procedure it considers appropriate not being inconsistent with this Scheme for the performance of functions under this Scheme; (j) giving feedback to the Council, and/or the FRC and/or any of its operating bodies on lessons learned from any proceedings conducted under this Scheme, in respect of any standards, advice, guidance, memorandum or statement on professional conduct, practice or duties issued by them; (k) providing such guidance on procedure as it considers necessary for the performance by the IFoA of functions under rule 1.23; (l) providing advice and guidance to the Council about entering into mutual disciplinary agreements with actuarial regulatory bodies outside the UK who are members of the International Actuarial Association; and (m) such other functions as shall be agreed from time to time by the Council. 10.2 The Disciplinary Board may at any time, subject to the agreement of the Council or such other body delegated by them for the purpose, arrange for a review of the provisions and operation of this Scheme or any aspect of it to be undertaken. 10.3 The Disciplinary Board shall from time to time provide guidelines for the manner in which sanctions involving education, retraining and/or supervised practice under this Scheme may be imposed. Such guidelines shall be published by the IFoA.
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How to contact the Board To contact the Board: By email:
[email protected]
By post: Ms Fiona Burrough Secretary to the Disciplinary Board Institute and Faculty of Actuaries Level 2 Exchange Crescent 7 Conference Square Edinburgh EH3 8RA By telephone:
+44 (0)131 240 1309
For further information on the disciplinary process, please visit our web pages at:
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Ex pe rti Pr se og • re Sp Ed ss on
www.actuaries.org.uk/upholding-standards/complaints-and-disciplinary-process
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© 2016 Institute and Faculty of Actuaries
1 Month 2015
