Background on actuarial profession in UK
- The Institute and Faculty of Actuaries (IFoA) is the professional body and regulators for actuarial professionals in the United Kingdom. They are founded on a Royal Charter.
- Actuaries compile and analyses statistics and uses them to calculate insurance risks and premiums and value pensions, typically employed by insurance and pension companies.
- To qualify as an actuary in the UK is difficult as requires the completion of 15 professional exams set by IFoA. The profession attracts bright graduates from the top Universities but a substantial number fail IFoA exams each sitting, with some exams with pass rates as low as between 20 and 30% for some papers and the mostly male profession has a high dropout rate.
- IFoA host 2 exam sittings a year and host exams in numerous countries outside UK.
Purported IFoA values
- With regards to its values as an organisation, on its website IFoA claims “We are committed to promoting diversity and inclusion in all our policies, practices and procedures. This applies to all of the IFoA’s professional dealings with our employees, members, volunteers and third parties.”
- In an article published 15 June 2020 on IFoA’s website to coincide with the black lives matter protests, they stated “The IFoA values equality and diversity in all that we do and condemns any kind of racism. Find out more about how we seek to do this on our diversity pages.”
- IFoA even set up a task force in 2018 on promoting the virtues of transparency in financial services: “We believe that higher levels of transparency are a pre-requisite for fairer, safer, more stable and more efficient markets that will deliver better value for money and better outcomes”.
- IFoA General Counsel Mr Ben Kemp sits on the Law Society “professional ethics”
IFoA found guilty of racism
- These purported values appear corrupt when we consider a Court Judgment against IFoA of May 2019. In a case brought by an IFoA member Mr Davda, his complaints were upheld by the Court of IFoA racially discriminating against him as a British national directly and indirectly. Also IFoA were found guilty of instructing another professional body, the Indian Actuaries Institute (IAI), of discriminating against British nationals. The Court noted these practices were ongoing and had been in operation for nearly 20 years. Criticism was also made against IFoA in the Judgment for a lack of disclosure and for failing to put an end to the policies when brought to their attention.
- Mr Davda was awarded remedy of £38,000 as IFoA’s discriminatory policies had denied him the opportunity to join the IAI to benefit from extra exam opportunities, thus illegally holding back his qualification and career progress due to his British nationality. Since this victory, further such claims have been lodged against IFoA and also new victimisation claims since IFoA have begun pursuing these individuals in their disciplinary scheme.
How the racist arrangements work
- The discriminatory arrangements were exposed as working as follows. India has its own actuarial professional body, the IAI. It has the same exam structure and curriculum as the IFoA. IFoA formally and automatically recognise exam passes by the IAI as its own via exam exemption arrangements. IAI host 2 exam sittings at different times of the year to IFoA. Therefore those who can join both IFoA and IAI get 4 exam opportunities a year to qualify as an actuary – 2 from IFoA and 2 from IAI.
- Thus those who cannot join IAI only have the 2 exam sittings offered by IFoA. This was proven to be the case for British people, as a Court found in 2019, due to IFoA’s instruction to IAI to refuse Brits to join IAI. This results in Brits getting just 2 bites at the cherry and Indians 4. The Court found that to be a clear disadvantage for Brits for pursuing this difficult actuarial qualification.
- The Court found the IFoA has a “non-competition understanding” with the IAI for British students. Hence by stopping Brits going elsewhere such as Indian Institute to do the exams, IFoA get all the Brits’ custom in the bag – subscriptions, exam fees. Then IFoA go to India and make money from them too, by offering them the extra exam opportunities. This brings in subscription fees, exam fees and exemption fees from the Indians.
IFoA’s corrupt response to race Judgment
- Having had this Judgment made against them, we can now explore IFoA’s reaction to it and measure it with reference to their purported values.
- No transparency. IFoA did not even communicate the news or details of this Court case in its “The Actuary” magazine it sends to members, nor on their website. Their failed defence costs not specified.
- No apology of any kind has been made by IFoA. Their £400k/year CEO left shortly after the Court Judgment (and enjoyed full pay for 6 months on gardening leave) but IFoA insisted to the media at the time this was coincidental. The instalment of an interim CEO Mr Des Hudson for 6 months at £180k was not communicated to members or media until he was about to end his term.
- Racist policies continue. The IFoA did not put a full and immediate end to these policies after the Judgment. The Court Judgment notes they were alerted to the discrimination of these policies by individuals in 2010, 2013 and 2017 also and failed to take those opportunities to end them. It’s fair to explore why the clear reluctance to simply end them after many years, including after a Court Judgment made.
- The Judge suggested a simple method of eradicating this discrimination, which is for IFoA and IAI to host their exams at the same date and time. Then there would be no advantage for people being members of both organisations. To date, the IFoA has not implemented this policy. Why the reluctance? Let’s consider the financial aspect of this.
- As for figures, they don’t precisely report how much they make from Indian members but clearly they bring substantial revenue, particularly as they now outnumber British nationals as student members. (by student members I don’t mean university students – student members are those who have not yet gained qualification, are doing exams towards it, they are working actuarial professionals).
- Last published accounts IFoA made £750,000 from exemption fees, the lion’s share would come from the 6,000 Indian students who pay an exemption fee to port over exam passes from IAI. Plus of course IFoA get their subscription fees and exam fees for when Indians sit exams with IFoA directly. By way of example, if each Indian member brings in £500/year – the cost of a year’s subscription and sitting/porting a couple of exams (which they get at reduced rate too) – that’s £3m. If £1000, that’s £6m. IFoA revenue in total around £11m.
- If the discriminatory policies were brought to an end immediately, the main selling point for the 6,000 Indians remaining at IFoA, the extra exam opportunities would disappear. They would lapse IFoA membership and they would just remain members of the IAI as it’s cheaper to do exams with them.
- For a further Employment Tribunal race discrimination case brought against IFoA in December 2019, IFoA board papers were disclosed showing IFoA are fully aware of the substantial money they will lose if these discriminatory exam policies were fully cancelled. They were exploring a range of options to strike a balance between not falling foul of the Equality Act yet maintaining the revenue of their Indian membership. None of these options included enabling British members to join IAI and get 4 exam opportunities a year.
- In summary, it appears the IFoA’s valuable Indian membership growth has been built on the back of proven discriminatory policies that IFoA are refusing to put to an immediate end to. All this in contravention of their purported anti-racism values.
No one stopping industrial scale discrimination in corrupt UK
- Who’s stopping it? No one. Not EHRC. Not FRC. No politicians (yet). No SRA regulated lawyer- SRA & SLCC failing to investigate their General Counsel Ben Kemp for example.
Profiteering from discrimination
- Each annual report their previous CEO Mr Derek Cribb boasted of growing overseas membership numbers, the lion’s share from India lured by the discriminatory extra exam chances they were denying to Brits. His remuneration grew in line with this growth, had doubled from £200k in 2010 to nearly £400k by his departure in 2019.
- Other winners from this industrial scale discrimination are a certain Mr Des Hudson (formerly Law Society CEO who lost a no confidence vote) who gained a £180k contract job as interim CEO of IFoA following Mr Cribb’s departure after the race Judgment (he’s ok, walked into another CEO job at the IPSE). That’s quite a handsome reward for Mr Hudson, as someone formerly Chairman of IFoA regulation board that has responsibility for its arrangements with other international bodies.
- Also legal firm Clyde and Co are making an undisclosed but substantial revenue from getting all of IFoA’s work in defending discrimination legal cases brought by several members. Legal firm Kingsley Napley get all IFoA’s disciplinary work which includes that from persecuting their own members in a disciplinary for speaking out against their racist policies.