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:

The purposes for which the Academy was organized are set forth in

the Articles of Incorporation as follows:

(a)

To advance the knowledge of actuarial science, which had its origin in the application of the doctrine of probabilities to human affairs and from which life insurance, pension plans, casualty insurance, and other analogous institutions derive their principles of operation;

(b) To encourange the consideration of all monetary questions involving,

(c)

(d)

separately or in combination, the mathematical doctrine of probabilities and the principles of interest;

To promote education in actuarial science and the interchange

of information among actuaries and among the various actuarial
organizations;

To establish, promote and maintain high standards of conduct and
competence within the actuarial profession.

To implement these purposes, the Academy has set up standards of qualification for membership requiring the passing of examinations in actuarial mathematics and insurance principles along with practical experience in responsible actuarial work.

As befits any profession the Academy has a set of Guides to Professional Conduct and a copy of these Guides is attached and made a part hereof. Actuarial practice covers a wide field and the members are reminded of their responsibilities and limitations in 1(b) of these Guides:

"The member will bear in mind that the actuary acts as an expert

when he gives actuarial advice, and he will give such advice only

when he is qualified to do so."

These Guides are supplemented by Opinions as to Professional Conduct and these are set forth in the Academy's 1972 Year Book (pp. 156-163).

Further the Bylaws of the Academy empower the Board of Directors to enforce standards of discipline as set forth in Article VIII entitled "Resignation and Discipline of Members", a copy of which is attached and made a part hereof.

The Academy appreciates the opportunity of submitting this statement

in connection with this important proposed legislation.

For the information of the Members of the Committee a copy of the 1972 Year Book of the Academy, which includes a list of members, is enclosed.

July 26, 1972

BYLAWS

OF THE

AMERICAN ACADEMY OF

ACTUARIES

(THE ACADEMY)

(A CORPORATION ORGANIZED UNDER THE ILLINOIS GENERAL NOT FOR PROFIT CORPORATION ACT) AS ADOPTED APRIL 29, 1966 AND LAST AMENDED JANUARY 10, 1970

ARTICLE VIII

RESIGNATION AND DISCIPLINE OF MEMBERS

SECTION 1. Resignation. Any member who is not in default in payment of dues and against whom no complaints or charges are pending may at any time file his resignation in writing with the Treasurer and, when accepted by the Board, it shall become effective as of the date it was filed. Notwithstanding the foregoing, the Board may in its discretion permit the resignation of a member against whom a complaint or charge is pending. The Board, on written application of any member who has resigned, may reinstate such member subject to such conditions as it may prescribe.

SEC. 2. Discipline. The Board, at any meeting attended by at least one-half of its members, shall have the power to consider and take action, as herein provided, with respect to all questions which may arise as to the conduct of a member of the Academy in his relationship to the Academy or its members, or in his profession, or in the practice thereof, or affecting the interests of the actuarial profession. The Board may, on its own initiative, investigate and take action with respect to any such question, and may also receive and hear any complaint relating to the conduct of a member preferred in writing and subscribed to by a member.

In the course of dealing with questions and complaints relating to the conduct of members, the Board may appoint, from among the members of the Academy, committees and boards vested with the powers specified herein:

a) Investigating committees empowered to investigate questions and complaints and to prefer charges against a member.

b) Prosecuting committees empowered to prosecute charges against a member at hearings before the Board or a disciplinary board.

c) Disciplinary boards empowered to hear evidence relating to questions and complaints and to make findings with respect to such evidence.

The procedures for such committees and boards shall be prescribed by the Board. The Board may retain counsel for the assistance of the Board and of committees and boards appointed by it.

In any hearing before the Board or a disciplinary board, a member proceeded against shall have the right to appear personally and by counsel, to be informed of the nature and content of the question or complaint, to examine the evidence presented, to examine adverse witnesses, and to present witnesses and evidence in his behalf. Any member preferring a complaint may appear personally and by counsel. Witnesses called in the course of hearings involving conduct shall vouch for the truth of their statements on their word of honor.

In all proceedings under this Section, the Board shall decide, directly or upon review of the findings of a body appointed by it, whether or not misconduct has occurred. If the Board finds that misconduct has occurred, it may warn, admonish, reprimand, suspend, or expel the member, provided that no order reprimanding, suspending, or expelling a member shall be issued except after a hearing before the Board or a disciplinary board.

A member against whom an order of suspension or expulsion has been rendered shall, upon application to the Board within thirty days thereafter, be entitled to appeal to the members attending a meeting upon the following conditions:

a) All rights and privileges of membership shall be suspended during the pendency of the appeal.

b) The notice of appeal shall be in writing and shall stipulate that the appealing member consents to the mailing to the members of a transcript of the evidence and copies of exhibits in the form approved by a majority of the Board.

c) The appealing member shall, within ten days after an invoice of the amount due is sent to him, deposit with the Treasurer the cost of transcribing and printing the transcript of the evidence and copies of any and all exhibits.

In the event the decision of the Board shall be set aside, the Treasurer shall return to the appealing member the amount of the deposit. Otherwise the deposit shall be retained by the Academy.

In the event of an appeal to the members the decision of the Board may be affirmed, modified, or set aside by the vote of a majority of the members present and voting at a meeting of the Academy.

The Board may, in its discretion, reinstate to membership at any time a member suspended or expelled under this Section, provided, in the event the suspension or expulsion had been affirmed by the members, the reinstatement shall not take effect unless and until confirmed by a vote of 'a majority of the members present and voting at a meeting of the Academy. Except as otherwise provided, all proceedings under this Section shall be deemed confidential and kept secret. The Board, however, shall notify the members of their action in all instances in which the Board orders the suspension or expulsion of a member. Such notification shall not be given until the time to appeal has expired or, in the event of an appeal, until a majority of the members present at a meeting of the Academy have voted in favor of suspension or expulsion. At the same time notification is given to the members, the Board may also give notice of such suspension or expulsion to such newspapers or journals as it may select.

In the event of subsequent reinstatement of the member, the Board shall give notice of such action to the members of the Academy and to any newspapers or journals previously advised by the Board of the member's suspension or expulsion.