Do you trust your colleagues to be ethical?

[Amy7]

I was a little horrified reading the thread about rampant cheating on the FAP modules. The discussion in that thread was focussed on whether - due to the cheating - candidates were advancing to ASA status who did not have the level of education desired by the SOA. There were suggestions about how to improve the security of the exams to prevent this cheating. While reading, I kept thinking about a different concern, and I want to hear others' opinions.

If someone is inclined to cheat in order to get their credentials, can we really trust their signature on an opinion? I don't think increasing security around the FAP modules will change that issue, since a person who would cheat to get through them would be unlikely to develop integrity as a result of taking two more proctored exams.* The pool of actuaries our "good name" as a profession relies on is the same pool of people who - apparently - require elaborate safeguards to prevent them from cheating.

So, my question is, do you think that it is rampant for people to lie on the opinions they sign? If not, is it only fear of losing credentials which keeps SOA members ethical? I was not quite naive enough to believe that all SOA members were unconditionally ethical, but I guess I thought that the unethical ones would be the exception. Yet many people seem to be saying that cheating on FAP is the rule. For those of you who said that many of your colleagues were cheating on FAP, based on your understanding of their character, how do you think those same cheaters would react in a business situation where, say, the CEO or a client is pressuring them to agree to numbers they don't believe are correct? If you believe they would stand their ground, why?

(* I'm not saying I'm against developing safeguards to prevent cheating on the FAP modules, I'm just bringing up another issue which I don't think would be affected by such safeguards.)

[JMO]

Perhaps I am naive, but I think that lying on opinions is not rampant. But I also think that cheating on exams is not as rampant as a few squeaky wheels want you to believe. (Or maybe they are just rationalizing their own desire to cheat, I don't know.)

Certainly there is a range of numbers that an actuary could believe satisfy professional requirements. And there may be real pressure from management to go as far as possible toward the "desired" end of that range. But, in my experience, most actuaries also will decline to certify something that is clearly outside that range.

[Amy7]

I just moved this thread from "Chat with the candidates and exam committee," since I realized I miscategorized it. The thread I refer to in my post (about cheating on the FAP modules) is in the "Chat with the candidates and exam committee" forum,

http://www.actuarialoutpost.com/actu...d.php?t=114937

ps Thanks JMO for your reply.

[A Student]

Originally Posted by JMO

Perhaps I am naive, but I think that lying on opinions is not rampant. But I also think that cheating on exams is not as rampant as a few squeaky wheels want you to believe. (Or maybe they are just rationalizing their own desire to cheat, I don't know.)

Certainly there is a range of numbers that an actuary could believe satisfy professional requirements. And there may be real pressure from management to go as far as possible toward the "desired" end of that range. But, in my experience, most actuaries also will decline to certify something that is clearly outside that range.

I would tend to agree with those statements. Very Very few actuaries go home at the end of the day and say - I lied on my opinion today. (or at least I would guess that is the case) There is a lot of "professional" judgement involved though, and its quite possible that what one person considers reasonable, another would consider overly aggressive. The challenge is to judge what is overly aggressive when you truly don't know the "right" answer. What consistitutes unethical over aggressiveness?

[Alto Reed on a Tenor Sax]

Originally Posted by A Student

I would tend to agree with those statements. Very Very few actuaries go home at the end of the day and say - I lied on my opinion today. (or at least I would guess that is the case) There is a lot of "professional" judgement involved though, and its quite possible that what one person considers reasonable, another would consider overly aggressive. The challenge is to judge what is overly aggressive when you truly don't know the "right" answer. What consistitutes unethical over aggressiveness?

I think that the salient point here is that your "ethcis" are highly subjective. Under pressure from management, I woud expect an unethical person to talk himself into thinking that the numbers management wants are merely "aggresive," rather than completely unreasonable.

In other words, your ethics may be your best barometer as to the true line between aggresive and dishonest.

[MountainHawk]

One of the things I'm always sort of surprised by is the fact that we, as a profession, don't consider it a conflict of interest for an employee of the company (and very likely, the actuary that did the actuarial report that management relies on to make it's estimate) to sign off on the reasonability of the reserves.

[JMO]

Originally Posted by MountainHawk

One of the things I'm always sort of surprised by is the fact that we, as a profession, don't consider it a conflict of interest for an employee of the company (and very likely, the actuary that did the actuarial report that management relies on to make it's estimate) to sign off on the reasonability of the reserves.

Well, the NAIC wants to change that, at least for "principles based reserves" on the life insurance side.

PS - before there was "GAAP" the [external] auditors of publicly held life companies did have an independent review of the stat reserves and other actuarial items.

[MountainHawk]

Originally Posted by JMO

Well, the NAIC wants to change that, at least for "principles based reserves" on the life insurance side.

I don't think we should be waiting for the NAIC to change it for us.

[JMO]

Originally Posted by MountainHawk

I don't think we should be waiting for the NAIC to change it for us.

I'm saying that they are trying to do it, maybe because they think we won't properly police ourselves.

[GosuJohn]

Amy7 your question is horrible. Humans are humans, you can't change that. You can develop exams that are hard to cheat on, but you cannot take the cheat out of cheaters. Every profession has cheaters, its just a way of life. There is nothing wrong with it, its just the way it is. Step outside your idealistic world and stop asking stupid questions.