The Actuary Vol. 13, No. 6 Confidentiality of Federal Statistics
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Article from: The Actuary June 1979 – Volume 13, No. 6 Page Eight THE ACTUARY *-\ hne, 1979 ARCH conditions for interagencies exchange of the life office so that I put by for six individually identifiable data. weeks all mathematics . and have ARCH Issue 1978.2 has made its wel- literally not a moment of leisure. ” -- come appearance in new format-275 Certain agencies, e.g. Census and pages in a light blue cover. Rather than BLS, are designated “Protected Statisti- Bowditch developed methodology for to list the titles and authors, for which cal Centers.” Files in other agencies can examining separately the profitability of see John Beekman’s article, The Actuary, be designated “Protected Statistical his annuity and of his life insurance op- November 1978, we prefer to whet read- Files.” Individually identifiable records erations. Despite his earlier accurate ing appetites by quoting James C. Hick- may not be published or disclosed ex- perception that the annuity rates of the man’s descriptive introduction, thus: cept to a Protected Statistical Center. competing companies were inadequate, A Chief Statistician is made responsible he subsequently determined that between “Most actuaries have heard the criti- for designating protected files and cen- 1823 and 1834 his own company had cism that their basic tool, the mathe- ters unless legislation has provided other- lost approximately $15,000 on its an- matics of life contingencies, solidified wise. Protection extends ,to copies in the nuity business. in the last century, and not much has possession of the person to whom the Upon completion of my investigation, happened since. Often this is followed record refers or who was the source of I concluded that Bowditch had left an by a series of statements of which the the information. even more important inheritance to the following are typical: life insurance business and the actuarial ‘Life contingencies, with its stress This bill’s importance is twofold. It profession than any original scholarly on expected values, misses the whole plugs loopholes in present legislation work he may have done in actuarial sci- point that time until death is a ran- and gives protection in instances where ence. This inheritance is the absolute in- dom variable. the present status is illdefined. And it tegrity he demonstrated in the conduct ‘The entire risk dimension is left permits controlled interagency exchange of his office. In 1832 the Board of Con- of data to reduce duplication caused by out of most treatments of life con- trol appointed to examine the operations two or more agencies requesting similar tingencies. of the company observed “it was an ex- data from the public. This bill deserves ‘Actuaries don’t seem to realize that periment, and the individual (Bowditch) support. construction of a life table is a sta- who had the principal agency in putting tistical estimation problem. For further information, write to Dr. it into operation was without a precedent to guide him. In the nine years that have ‘As if all this is not bad enough, life James T. Bonnen, President’s Reorgani- elapsed since it was organized, numcr- contingencies traditionally uses fix- zation Project, Room 9225, New Execu- ous and considerable sums have been in- ed interest rates and thereby neglects tive Office Building, Washington, D.C. trusted to its management by citizens - another imp01 Lant component of 20503. q of different parts of the country, which risk faced in an insurance enter- Mr. Jollansen is the Society’s representatwe proves that such an institution was need- prise. lo the Committee of Professional Associations on Federal Statistics. ed while it shows the confidence the pub- ‘Actuaries persist in stating their lic have in its stability as well as in the basic formulas in terms of the two- justice and liberality of its dealings.” centuries-old commutation func- Bowditch Statements attributed to him also re- tions, although these no longer rep- (Corrtmued from page 5) flect his character. “Truth - truth - resent efficient computing formula- his annuity rates were 10 to 20 percent truth! Let that be the family motto.” tions’.” higher. In his own way of speaking “Talents without goodness and moral In many ways, the Ball State Confer- about the Union Insurance Company’s work, I care little for.” ence (to which ARCH 1978.2 is devot- rates he observed that “on the whole Bowditch saw the company not only ed) was directed to answering the critics nothing could be learned from these rates as a profitmaking concern, operated in who have expressed these views. except to avoid them, being the rock on part to benefit the hospital, but also as which the company split.” (Ed. Note: Procedure for subscribing an institution serving the public interest is given on page 8 of our September Bowditch was intrigued by the work- in helping provide financial indepen- ing conditions of the actuary of the dence to widows and orphans. Nine days 1978 issue). 0 Pennsylvania Company, remarking sev- before his death, in his final message to eral times in his notes that “the actuary the Direotors of the company, he wrote, CONFIDENTIALITYOF FEDERAL attends daily from 9 to 2 at the office “Providence has seen fit signally to bless STATISTICS and then it is shut up.” He observed our efforts and make it an institution of also that the actuary worked for an an- public record. I am not aware of any by Robert I. lohansen nual salary of $1,200, a small fraction change, the introduction of which into Legislation to protect confidentiality of of his own salary, perhaps reflecting the the present system of management I records maintained by the Federal Sta- difference in business hours. His com- should desire or recommend.” tistical System has been drafted under ment about his own working conditions Our profession covets for itself, quite the President’s Reorganization Project. sounds more familiar to modern day ac- properly, a reputation for integrity. This Act, if passed, will protect statisti- tuaries. In December 1830, he wrote a Modern day actuaries have been well - cal information furnished to the Federal plaintive note to his publisher, reading served in that regard by the integrity of Government and aims to reduce burden in part, “Dear Sir, It is now our busy our predecessors, in particular Nathaniel and expenses on the public by setting time of settling the annual accounts of Ingersoll Bowditch. cl .