Characteristics of a profession and the Actuaries' Code: formula sheet

Key formulas

Integrity

Honest + straightforward + not misleading

Test: would a reasonable person feel misled by what you said or left out?

Competence and care

Skills + experience + due care + up-to-date knowledge

If you lack skill, get help, supervision or peer review, or decline the work.

Impartiality

Advice free from bias and unmanaged conflicts

Identify the conflict, disclose it, manage it, or step aside.

Compliance

Follow law, regulation and professional standards

Do not help others to break them either.

Speaking up

Concern → right person or body → document

Escalate if the first step fails. The Code does not allow you to ignore it.

Communication

Clear + relevant + understandable + states assumptions and limits

Tailor it to the audience. Do not hide uncertainty.

Dilemma analysis framework

Facts → Stakeholders → Code principles → Options → Consequences → Decision → Document

Use this order for any scenario question. It is a method, not an IAI-prescribed formula.

Conflict of interest handling

Identify → Disclose → Manage → Decline if unmanageable

Apply to actual, potential and perceived conflicts.

Escalation ladder for concerns

Raise with the person → Senior management or committee → Professional body advice → Regulator or IAI

Move up only as needed. Skip steps only where there is serious risk or an internal route is compromised.

Ethics versus compliance

Compliant ≠ automatically ethical

Meeting the rules is the minimum. Judgement covers what the rules do not.

Quick revision

• A profession has specialist knowledge, formal training and qualification, and a duty to the public beyond the client or employer.
• A professional body sets entry requirements, standards and discipline for its members.
• Regulation protects the public and keeps confidence in the profession.
• The Actuaries' Code is a set of principles that guide conduct, not just a rulebook of fixed answers.
• Integrity means honest, open and fair dealing.
• Competence and care means only doing work you are qualified for and doing it properly.
• Communication must be clear, timely and not misleading, especially for non-expert users.
• Comply with law and relevant professional standards, and be ready to report serious concerns where required.
• In a dilemma, identify the stakeholders and conflicting duties first.
• Public interest and the reputation of the profession come before personal gain.
• A good answer states an action and justifies it, rather than only naming the issue.
• Document decisions and seek advice or escalate when you are unsure.

Common mistakes

• Listing features with no link to actuarial work. Fix: Attach one actuarial example to every feature, such as exams for specialised knowledge.
• Saying a profession is simply a well-paid job. Fix: Stress the public interest duty, ethical code and regulation. Pay is not a defining feature.
• Treating self-regulation as 'no regulation'. Fix: Say that the profession sets and enforces rules itself, usually with sanctions and often with some external oversight.
• Saying statutory regulation is always better. Fix: Give both sides. Statutory rules have legal force but can be slower and less expert. Self-regulation is flexible and expert but may seem self-serving.
• Listing principle names without applying them to the scenario. Fix: Tie each principle to a specific fact in the question and state what the actuary should do.
• Saying the actuary should simply follow the client's instruction. Fix: Check integrity, compliance and impartiality first. A client's wish does not override the Code or the law.
• Jumping straight to reporting to the regulator Fix: Show a ladder: discuss internally first, escalate, then report externally when serious and unresolved, unless urgent risk justifies going direct.
• Treating compliance as the same as ethics Fix: Say that compliance meets the written requirements, while ethics also asks whether the action is right where rules are silent.

Exam tips

• Match the depth of your answer to the marks. Short-answer parts need one clear point each, while discuss questions need linked reasoning.
• Always tie each feature to actuarial practice. A generic list rarely earns full marks.
• Use the phrase 'public interest' explicitly. Examiners look for it.
• In multiple-choice items, reject options that describe any job, such as earning a salary or working in an office.
• If a scenario is given, apply the features to the facts instead of reciting the notes.
• Always tie a regulatory feature to the public interest. Marks usually sit in that link.
• For 'discuss' questions, give both advantages and disadvantages of self and statutory regulation, then conclude.
• Use the scenario facts. A generic essay scores less than a short answer applied to the case.