Transcript G4 - Reserve Range

Institute of Actuaries of India
Case I4: Eavesdropping
Rishabh Prakash
Ramnath Shenoy
Indian Fellowship Seminar
Indian Actuarial Profession
Serving the Cause of Public Interest
Case Details
• Consultant to trustee of pension scheme
• Conducted a review of investment strategy
• Already discussed with investment committee:
– 2 company (sponsor) appointed directors
– Finance director
– Human resources director
• Overhear a conversation on route – sketchy but source credible
• Deals with potential sale of most stable parts of the sponsor’s
business
2
Issues posed
• What professional issues arise from the situation?
• How to deal with them?
3
Issues in light of Actuaries Code
Integrity
• Discussion of information could amount to “rumour mongering”
• Sketchy information shouldn’t disseminate further
• Confidentiality of the information needs to be respected
Competence and Care
• Information incomplete - the actuary heard bits of the conversation
• Information not credible – not formal communication, could be
wrong
• But if true could have serious consequences on the fund
4
Issues in light of Actuaries Code
Impartiality
•
“Members will not allow bias, conflict of interest, or the undue influence of others
to override their professional judgement “
• The comments of the other actuary may amount to undue
influence if the course of action is changed based on them
5
Issues in light of PCS
Confidentiality
•
“As a matter of law, information acquired by an actuary in the course of
professional work is frequently confidential to the actuary’s client or the actuary’s
firm. As such, it should not normally be disclosed unless consent has been obtained
from the actuary’s client or the actuary’s firm, as the case may be”
• Need to understand the level of confidentiality in the information
and respect it
Standards for Advice
•
“An actuary must consider the extent to which it is appropriate to carry out
investigations to assess the accuracy and reasonableness of any data being used”
• May not be advisable to form any opinion based on this information
• Inappropriate to do any investigation without confirmation
6
Steps we would take
• Information not public may only be a rumour
• Cannot discuss openly
• Hence:
–
–
–
–
–
Won’t specifically broach the topic of the sell-off in the meeting
Go ahead and discuss findings of investment strategy review
Offer to make approach flexible by building in contingency scenarios
Build in sale of major parts of the business as a contingency scenario
Reiterate employer/ sponsor covenant
• If rumours gather steam: seek a meeting, confirm veracity of
news, offer to overtly modify investment strategy
7
Institute of Actuaries of India
Thank you
Rishabh Prakash [email protected]
Ramnath Shenoy [email protected]