Rule 13 – Collateral Obligations (Apparent material noncompliance with the Rules of Professional Conduct or Standards of Practice)
A member who becomes aware of an apparent material noncompliance with the Rules or the standards of practice by another member shall attempt to discuss the situation with the other member and resolve the apparent noncompliance. In the absence of such discussion and resolution, the member shall report such apparent noncompliance to the Professional Conduct Board, except where such reporting would be contrary to law or, when the member is acting in an adversarial environment, for the duration of such adversarial environment.
In order to foster education amongst members, thereby fulfilling the profession’s responsibility to the public, a member who has a question about the spirit or intent of the standards of practice, or of generally accepted actuarial practice when no standards exist, may consult in confidence with the chair (or vice-chair) of a designated council, established by the Board pursuant to Bylaw 8.1.1 or of an appropriate practice committee. When consulted in such a capacity, the chair (or vice-chair) who becomes aware of an apparent material noncompliance with the standards of practice by another member shall not report the apparent noncompliance to the Professional Conduct Board.
When a member, in their capacity as occupant of any position within the Institute designated by the Board from time to time by resolution, or any position within any other entity so designated, becomes aware of an apparent material noncompliance with the standards of practice by another member, such member shall not report such apparent noncompliance to the Professional Conduct Board.
Keeping other members accountable
Our members have a duty to keep each other accountable. When they have reason to believe another member has acted in a way that is noncompliant with our established Rules of Professional Conduct and Standards of Practice, they must first attempt to discuss and resolve the matter. If they remain convinced of wrongdoing, they are expected to report the noncompliance to the Professional Conduct Board (PCB). A member may seek confidential advice and there are some exemptions from the requirement to discuss and/or report.
“As actuaries, our work directly supports financial security and social well-being. That responsibility means we are accountable to the public we serve, and also to each other as professionals. Upholding our Rules of Professional Conduct is part of maintaining the trust placed in our profession. If you believe another actuary has breached our Rules or Standards, you need to talk to them about it. And if you can’t resolve the matter and are still convinced that something is wrong, you have a duty to report it to the PCB.”
— Abid Kazmi, FCIA
Why Rule 13 is important
Demonstrates commitment to accountability
Requiring that members report noncompliance of other members enforces self-regulation, deters unethical behaviour, and ensures issues of conduct or noncompliance with standards are addressed promptly.
Prevents harm
Through both deterrence and discipline, it helps prevents harm to clients, employers and the public from unethical or incompetent practices.
Upholds the profession’s reputation
Preventing harm, regulatory violations or public scandals from undisclosed noncompliance helps protect the reputation of the entire profession.
Builds trust and credibility
Reinforces that members prioritize ethics and transparency. Stakeholders gain confidence that misconduct will not be ignored or hidden.
Provides a clear and effective framework for disciplinary action
Provides members with a clear course of action and the CIA with an established process to evaluate wrongdoing and carry out disciplinary action if warranted, but without overburdening the disciplinary system unnecessarily.
Educates and protects individual members
The requirement to discuss suspected noncompliance helps clear up misunderstandings and perhaps educate members, while the duty to report helps protect members from being seen as taking part in wrongdoing.
What Rule 13 means for members
You don’t have to be sure, but cannot be frivolous
The use of the words “apparent” and “material” when referring to a noncompliance are intentional. You don’t need incontrovertible evidence, but you must have a reasonable and defensible suspicion and be able to clearly state the nature of the noncompliance.
You must discuss your suspicions, it’s not optional
You are required to attempt to discuss and resolve the situation with the other member before reporting. If situations can be clarified or rectified without involving the PCB, then this is a better outcome for all involved.
Resolution can take many forms
Discussions can reveal that there was only the appearance of noncompliance. The member could also admit the noncompliance and take all necessary corrective action to rectify the situation, in which case, there may not be a need to report.
You can get confidential advice from a Chair
If you are unsure how to proceed and need additional information or interpretation, you can discuss the situation with a Chair of certain CIA entities confidentially. Note that this applies to noncompliance with Standards of Practice only. The Chair is still obliged to report noncompliance with the Rules of Professional Conduct. You can discuss hypothetical situations with any recognized expert.
There are exceptions to when you must report
You are not required to report to the PCB if doing so would breach applicable laws or legislation. You may also abstain from reporting if you are in an adversarial environment such as court proceedings or mergers and acquisitions.
There are roles in which you would not report
It may not be appropriate to report if you are employed by a regulatory body, employed by an entity that protects policyholder benefits in the event of an insurer’s insolvency, or belong to a CIA volunteer group charged with reviewing specific practices with an educational focus.
