Notice of Disciplinary Determination

On September 17, 2012, 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 the conduct of Robert M. Reynolds, ASA, as a co-signer of two actuarial valuations for public employee retirement system plans. The Discipline Committee determined that Mr. Reynolds materially violated certain Precepts under the Code of Professional Conduct and should be suspended from the Society of Actuaries for a period of two years.

Mr. Reynolds’ firm was engaged to perform actuarial valuations for the state plans for the period ending June 30, 2003. In 2004, Mr. Reynolds co-signed two actuarial valuations for the plans. In performing these services, Mr. Reynolds did not comply with applicable Actuarial Standards of Practice (ASOPs) and materially violated the Code in the following respects:

  • The two reports reflected coding errors that were known to the firm in which Mr. Reynolds worked as early as approximately one year before the issuance of these reports. Mr. Reynolds knew of these coding errors well before issuing these two reports, but did not correct them or disclose them to the client. Issuing the reports with the errors and failing to disclose them represented a failure to act honestly and with integrity and a material violation of Precept 1.
  • While the use of premium rates as the initial per capita healthcare cost is permitted under ASOP 6 (adopted December 2001), Section 3.4.5 requires additional considerations and the documentation and disclosure of such additional considerations by the actuary. Mr. Reynolds failed to provide such disclosures.
  • In relying on a third party for the premium calculations used in the reports, Mr. Reynolds failed to comply with the requirements of Section 5.3 of ASOP 23 (adopted July 1993) regarding reliance on data supplied by others and disclosure regarding the same.

The Discipline Committee therefore determined that Mr. Reynolds materially violated Precepts 1 and 3 of the Code.1

All members of the SOA are reminded of their responsibility to follow the Code of Professional Conduct.

1 Precept 1: An Actuary shall act honestly, with integrity and competence, and in a manner to fulfill the profession’s responsibility to the public and to uphold the reputation of the actuarial profession.

Precept 3: An Actuary shall ensure that Actuarial Services performed by or under the direction of the Actuary satisfy applicable standards of practice.