American Academy of Actuaries Rebuffs Characterization By Republicans

Academy: Actuarial Analysis Shed Light on Risks and Costs Under Health Reform Legislation

WASHINGTON—Several major media outlets, including The Christian Science Monitor and CBS News, have reported a comment made by Republican National Committee (RNC) Chairman Reince Priebus on March 18 that, among other assertions, characterizes actuaries’ work related to the Affordable Care Act (ACA) in political rhetoric meant to elicit attention. The characterization of actuaries in those remarks cannot be taken seriously. The actuarial profession produces objective analysis of risks and costs based on actuarial principles, and actuaries are bound by a code of professional conduct that includes the requirement that their work must be done within the parameters set by the laws of our nation, as well as rigorous actuarial standards of practice.

Academy members, both in the public and private sectors, serve as the objective, non-partisan voice of the U.S. actuarial professional in matters of public policy and actuarial professionalism. Many, including the Academy itself, were called upon during the congressional deliberations on the ACA to provide actuarial expertise to lawmakers on actuarial aspects of the legislation’s impact. This involved analysis of the consequences of the legislation, as far as they could be predicted given the many, complicated interactions of its various measures. The impacts of changing age rating rules were widely discussed, publicly deliberated upon and considered by lawmakers, with actuarial analysis as well as much input by others.

Recent Academy Activity, Mar. 10–14, 2014

Recent Events

More than 770 registrants learned about credentialed actuaries’ professional responsibilities under Precept 13 of the Code of Professional Conduct during the March 14 webinar hosted by the Council on Professionalism, “Precept 13: Preserving Integrity and Public Trust.” Council member John Purple, a casualty actuary and member of the Actuarial Board for Counseling and Discipline (ABCD), Lisa Ullman, an enrolled actuary and a member of the Committee on Professional Responsibility, and Sheila Kalkunte, the Academy’s assistant general counsel, discussed how Precept 13 applies to actuaries and actuarial work, steps to take when faced with a potential Precept 13 situation and issues surrounding compliance with Precept 13, and particular case studies in light of Precept 13 obligations. View the slides on the Academy website. A recording of the webinar will be made available for viewing free of charge to Academy members.

Public Policy Activities

The [RNC's] characterization of actuaries in those remarks cannot be taken seriously. The actuarial profession produces objective analysis of risks and costs based on actuarial principles
  • Members of the Health Practice Council and Federal Health Committee converged on Capitol Hill on March 13 and 14 to discuss health care costs, Affordable Care Act (ACA) implementation, Medicare, and Medicaid with policymakers. More than 20 volunteers met with representatives from 35 congressional offices and government agencies.
  • William Hines, vice president of the Risk Management and Financial Reporting Council, submitted written testimony to the U.S. Senate Banking, Housing, and Urban Affairs Subcommittee on Financial Institutions and Consumer Protection for its hearing on capital regulation for insurers.
  • Senior Pension Fellow Donald Fuerst called special attention to lifetime income needs in written testimony submitted to the U.S. Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Economic Policy for its hearing, “The State of U.S. Retirement Security: Can the Middle Class Afford to Retire?”
  • Joyce Bohl, a member of the Federal Health Committee, made a presentation on “Putting a Premium on Health: The Affordable Care Act & Underwriting” as a panelist at a March 8 session of the National Conference of Insurance Legislators’ (NCOIL) spring meeting.
  • The Health Solvency Work Group sent a letter to the NAIC Health Risk-Based Capital Working Group offering alternatives to increasing risk-based capital factors to cover risk adjustment, temporary reinsurance, and temporary risk corridors in the ACA.
  • The ORSA subgroup of the Risk Management and Financial Reporting Council provided comments on a draft of the National Association of Insurance Commissioners’ (NAIC) Guidance Manual for the Own Risk and Solvency Assessment.

Opportunities to Learn

  • [This] week’s “Academy Capitol Forum: Meet the Experts” webinar, “Actuary Serving Congress: A Conversation With GAO’s Chief Actuary,” will feature the U.S. Government Accountability Office’s (GAO) Chief Actuary, Frank Todisco. The webinar, which will take place March 20 from noon to 1 p.m., Eastern, will include an overview of the GAO, and address the role of the actuary within the GAO, and GAO’s work on key national issues that have required actuarial input and expertise. Register now.
  • Academy experts will present pre- and post-meeting seminars in connection with the Enrolled Actuaries Meeting that will take place later this month in Washington. Registrants may earn up to 2.9 EA core and up to 2.5 EA core/ethics continuing education credits at the March 23 “Professional Standards/Ethical Dilemmas Seminar” and up to 8.4 EA noncore credits at the March 26-27 “2014 Pension Symposium: Retirement Security in the U.S.—What’s Working, What’s Not, and Where Do We Go From Here?”Learn more about the Academy at www.actuary.org.