2017 Candidate Questionnaire - David K. Sandberg, FSA 2001, CERA, MAAA

David K. Sandberg, FSA 2001, CERA, MAAA

VP & Corporate Actuary
Allianz Life Insurance Company of North America, Minneapolis, MN

I believe ethics is the application of a transparent, thoughtful, and reasoned approach when an issue involves deciding between two worthwhile objectives which are in conflict with each other. Proper transparency includes being willing to consider and note that each position has value as well as costs (and/or risks) for adopting it. The more we think about issues of right and wrong (such as fraud or deceit), the clearer the outcomes become; but ethics combined with transparency means that it is not the outcome that is “right” or “wrong,” but whether the “right” process has been followed—that is, determining if diverse views have been actively sought out and ensuring that the rationale for the ultimate decision is communicated (or documented) so it can express how the decider legitimately heard and considered the alternatives.

I have followed this ethics guideline in leading or working on public policy projects and in managing professional committees. As the SOA continues to lead and make decisions on issues important to the future and relevance of our profession, it is essential the board and leadership apply this in our communications and deliberations.

Being a team player builds productive collaboration as described in the concepts of ethics and transparency I discussed earlier. Three examples of this productive collaboration include:

1. Almost 15 years ago I chaired a Task Force at the Academy to assess if Principle Based Reserves could be compatible with US Tax Policy. Until that point many felt they were not. Thanks to the work of this Task Force, the PBR effort was able to proceed with solutions that did not raise unmanageable tax complications.   
2. Over ten years ago, due to growing concerns and controversy over reporting requirements for public pension plans, I was asked by the American Academy of Actuaries to chair a Task Force on ways to improve the reporting of public pension plans. The Task Force was deliberately chosen to represent practitioners with diverse views and backgrounds. Over the course of the 18 months or so we worked on this project, we ended up with a work product where all participants were able to sign their names to it. Its content raised and outlined many of the same issues and recommendations later also made by the SOA’s Blue Ribbon Task Force.
3. One of my assignments on the SOA Board the last two years was to be part of the committee reviewing relations with other organizations. As someone new to the board, I arrived with a different background and perspective from those who had been previously involved at the SOA. To the credit of the group and its leadership, everyone’s views and insights were respected and solicited so we could make recommendations on how to move from a challenged working environment to one that is now more productive. I was grateful to be part of such a process.

My sources of professional information include: The New York Times, The Financial Times, The Economist, and blog postings at Medium on history and societal trends and issues; actively conversing with others (both within and without the profession) concerning current issues in the Americas, Europe, Middle East, and Asia; and reading books focused on history.

My recent applications of this information includes:

1. Active participation at the International Actuarial Association. Two major projects of the Insurance Regulation Committee include:
1. Work with the International Association of Insurance Supervisors on proposed standards for Internationally Active and Globally Significant Insurers. This has been a challenging but rewarding effort with a few years still to go.
2. Compiling a Risk Book with concise chapters written by thought leaders on the concepts used by actuaries to manage complex risk in a sustainable manner.
2. Participating on the ASB’s Risk Committee. We have drafted standards on ERM and are currently working on one for Determining Capital Adequacy.
3. Another 2016 board assignment included membership on the International Committee. This required being responsive to and understanding the cultural, political, and professional issues involved to grow the influence and value of the SOA in an international setting.

My traditional first reaction to this question is to think of budgets, dollars, and expense savings. These are important activities as a general rule, but they can also end up being penny wise and pound foolish if we ignore the distinction between expenses and investments. A friend recently shared a story of his father who was asked by an inventor working out of his garage if he wished to invest in some ground-floor shares of this company. The father declined in order to be prudent with his expenses, but the investment he declined was for shares in a company that would be called IBM. The point is not that hindsight is 20/20 but that the process of resource management includes more than saving money today; it also includes the forward-looking view of how to better prepare for the future. Expenses do need to be minimized, but investments also need to be managed. I have spent much of my volunteer professional time focused on managing and building projects that will be important to our profession and others in the future and in engaging other volunteers to share in that process. This has been, for the last 5–10 years, a major focus of the SOA, and one to which I would hope to contribute.

Lastly, another aspect of managing resources is to remember that two of our most valuable resources are those of our volunteers and of the SOA staff. The size and complexity of the issues being addressed at this time cannot be done successfully by the board and its leadership alone. If we waste the time of volunteers, use staff inefficiently, or lack procedures that both empower and focus their efforts, we will be far worse off for losing sight of these less “visible” bottom line expenditures of resources.

I am a vice president for Allianz Life of North America in Minneapolis, MN, and was the Appointed Actuary at LifeUSA, a major writer of deferred and equity indexed annuities, where I worked from 1989 until LifeUSA’s purchase by Allianz Life in 1999. Additional responsibilities have included GAAP and statutory reporting, crediting rate and investment strategies, experience analysis, government relations, and reinsurance. From 1983 to 1989 I worked for Lone Star Life Insurance and Southwestern Life Insurance in Dallas, TX, and for Dorth Coombs Insurance Agency in Wichita, KS. 

I have been fortunate that my background has included exposure to life, health, and pension practice in corporate settings that have been small and entrepreneurial, mid-sized and focused, and large and successful. So, I am familiar with the professional skill sets needed in diverse practices and with the corporate methods needed to achieve successful outcomes in diverse situations and circumstances. As the SOA board has expanded the depth and breadth of its vision for its members, I believe that this background will be useful and necessary.

My past professional involvement includes a prior SOA board member, past president of the Academy, past member of the Executive Committee of the IAA, and a Trustee for the Foundation in addition to volunteer committee work for the SOA, Academy, and IAA.

The SOA's governance needs to adapt to a shrinking board membership while implementing a new strategic plan over the next two years. I believe there is an opportunity for these changes to enhance and strengthen our profession. But to do so, the SOA will need to involve additional engagement with both the volunteers and staff of the SOA along with people knowledgeable with the governance of the SOA and the needs of the larger profession.