Conflict of interest [利益衝突] is one of those concepts where if you truly understand and look out for it, even in every life, you start to understand what is going on in the world and what drives people’s thoughts. The definition of this is when one person has loyalties [責任] to two different parties, and can’t fulfil the obligations [義務] of both.
I’m sure you’ve experienced this in your life. A good example would be: maybe you have a relative [親戚] who is telling you that you should put all your money into some asset fund [基金] because it’s a great fund and you’ll get really rich. Lets say you found out afterwards that this relative gets commission [佣金] for every client he persuades to put money into that fund – would you then trust the advice that he is giving you? Do you think that he is really helping you grow your wealth, or would you think that he’s only doing this because he wants to increase his own commission?
From the example above, you can see how your relative has two competing interests: giving you advice as a relative to help you get rich, and helping himself get rich by earning commission. Unfortunately, most people are selfish [自私], so they normally put their own interests above everyone else’s.
Conflict of interest could happen in insurance companies as well. One key role of a chief actuary is to make sure a company has enough reserves to pay their customers. What if the chief actuary [總精算師] gets paid a bonus [花紅] if the company makes a profit that month? Well, a release in reserves [準備金] gets translated into an increase in profit (and an increase in reserves reduces profit). In this case, do you think the chief actuary would really put the customer’s interests above his own?
I keep telling all of you guys that being an actuary is the best job ever in the world and that you should follow and read the blogs of actuaries. Definitely not a conflict of interest, right? Right?…
