Actuary As Expert Witness
Preparing the Hearing Officer
March 13, 2006
Actuary/Attorney Mission
Package your story to engage the
hearing officer’s interest in terms he
understands so that he cares about
your side of the story.
Persuasive vs. Factual
Proceedings
Public Policy Proceeding
Involves changing statute, regulation,
or practice.
Political agenda
Financial Disputes
Disputes over rate levels or business
contracts
Sizing Up The Hearing Officer
Tenure with organization
Education
Prior work experience
Future work ambitions
Politically appointed?
Relationship with your attorney
Actuarial support available to him
Actuarial Support for the
Hearing Officer
Indirect – Plaintiff
Direct - Staff or Consulting Actuary
Frame issues in English
Summarize root of different opinions
Persuade to your side (Quotable quotes)
Objectives of Expert
Testimony
Stay within the scope of the
decision that needs to be made.
Build the hearing officer’s
understanding of the facts and
issues.
Establish professional credibility
Hearing Officer Interest
Make a timely
decision
Avoid reversal on
appeal
Promote political
objectives
Hearing Officer
Understanding
Expert level of
understanding
unnecessary
Unlikely to invest
much effort in the
education process
A Hearing is a Show
The story – The action or document that
is the basis of the dispute.
The program – Pre-filed direct testimony
The performance – Cross examination
The critics – Lawyers’ briefs
The audience - Adjudication
Pre-Filed Direct
Hearing Officer’s road map to the
issues, people, and documents.
Provides fundamental education so
that any prior documents are
intelligible. Should include
definitions of key concepts,
acronyms, and “terms of art”.
The Value of Pre-Filed
Testimony
People “listen” to what they read
differently than to what they hear.
Written statements can be more
accurately framed within the
desired context.
Written statements are harder to
ignore.
Cross Examination

The only show in town where the script is
written in real time.

The only human battle that involves no
guns, car chases, expletives, or special
effects.

The most decisive event for the hearing
officer.
Your Performance is Good if

The hearing officer remained conscious
throughout your testimony, and did not appear
to be making grocery lists or doing the
crossword.

The hearing officer asked you at least one
intelligent question.

Opposing counsel is acting
funny.

Your counsel suggests a debriefing at the bar
down the street.
Your Performance is Not Good if

You speak over the hearing officer’s head.

You contradict yourself.

You deliberately ignore established
actuarial standards of practice.

Your counsel is distressed.
How to Lose Your Hearing Officer
Speaking Geek
Q: You mentioned other
statistics as well that
one might look at in
judging the fit for a
regression. Can you
discuss what they are
and what they’re
measuring?
How to Lose Your Hearing Officer
Contradicting Yourself
Pre-Filed Direct:
Company X uses the average of paid and incurred
loss projections in its trend for bodily injury
coverages. This method, which the Commissioner
does not use, is inappropriate for several
reasons…..
Because incurred estimates have been the most
accurate predictors of ultimate experience
historically, and because there is no reason to
believe this will change, the Commissioner should
reject company X’s proposal to incorporate paid
development in ultimate trend projections.
How to Lose Your Hearing Officer
Ignoring Actuarial Standards
Pre-Filed Direct:
The company filing also includes actual loss
experience related to hurricanes. Actual
hurricane losses have been less than 2% of losses
over the last 20 year period. Complete reliance
on historical loss data might not be appropriate
because of the limited time period. However, in
comparison with actual historic experience, the
results of the RMS hurricane model appear to be
unrealistic. In addition, the AIR hurricane model
should not be used without consideration of the
actual historic loss data.
Legal Briefs
Summarizes the basis of why you are
right and “they” are wrong.
In highly technical proceedings, hearing
officers rely on these documents for
paraphrasing in the decision.
Because of the potential for appeal, and
because lawyers are not under oath,
technical review by an actuary is critical.
Technical Review of Briefs
Are the arguments supported by the
record (documents, exhibits,
citations)?
Are the facts presented within an
accurate context?
How much does each argument
affect the outcome?
Adjudication
The best resolution of a dispute is
settlement, not adjudication.