Business Management · Characteristics of a profession and the Actuaries' Code

The Actuaries' Code: Principles and Rules Explained

Updated 11 October 2026 · Fact-checked

The Actuaries' Code is a set of principles that guide how actuaries behave. The principles cover integrity, competence and care, impartiality, compliance, speaking up and communication. To answer an exam question, find the facts, match each to a principle, state what it requires, and recommend a clear action.

Understand The Actuaries' Code: Principles and Rules

A profession earns public trust by setting standards for its members. The Actuaries' Code does this for actuaries. It does not list every possible situation. It gives principles, and you apply them with judgement. That is why exams test it through short scenarios.

The principles you need to know are these:

Integrity: be honest and straightforward. Do not mislead anyone, and do not let your own interests override your duty.
Competence and care: only do work you have the skills and experience for. Do it with due care, and keep your knowledge up to date.
Impartiality: do not let bias, conflicts of interest or the influence of others distort your advice. Your advice should be fair.
Compliance: follow the laws, regulations and professional standards that apply to your work, and do not help others to break them.
Speaking up: raise your concern if you see something that is, or may be, improper or unlawful. Do it through the right channel.
Communication: give clear, relevant information that the audience can understand, including the key assumptions, uncertainty and limitations.

Note the wording. Some versions of the Code group these ideas differently, or name them in a slightly different way, and the wording can change over time. So do not memorise only a list of names. Learn what each idea requires. If a question says "five principles", use the principles named in your study material and say what each means.

The Code works together with the law and with professional standards. The Code does not replace the law. If the law and a client's wishes conflict, you follow the law. If a conflict of interest cannot be managed, the right step is often to disclose it or decline the work.

Key rules to remember

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.

How to solve The Actuaries' Code: Principles and Rules questions

Use this method for any scenario question on the Code. It keeps your answer structured and stops you from missing marks.

1Read the scenario and list the facts: who is involved, what the actuary did or plans to do, and who could be harmed.
2Decide which principles are engaged. Often more than one applies.
3For each principle, state in one line what it requires of the actuary.
4Say whether the actuary's action meets or breaches it, and give the reason from the facts.
5Recommend a practical action: disclose, decline, seek advice, escalate, correct or communicate more clearly.
6Note the risk to the public interest and to trust in the profession if the action is not taken.
7Finish with a clear conclusion in one sentence.

Quickest way: Principle-matching in 60 seconds

When to use it: Use this for multiple-choice questions and for short scenarios when you are short of time.

Underline the key fact: conflict, lack of skill, pressure to mislead, rule breaking or unclear report.
Match it to the principle: conflict → impartiality; lack of skill → competence and care; misleading → integrity; rule breaking → compliance; hidden concern → speaking up; unclear report → communication.
Choose the option that is open and ethical, not just convenient.
Rule out options that ignore the issue or only protect the actuary or the client.

Common mistakes in The Actuaries' Code: Principles and Rules

Listing principle names without applying them to the scenario.
Students memorise the list and expect marks for recall.
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.
Business pressure feels realistic, so students lean towards the client.
Fix: Check integrity, compliance and impartiality first. A client's wish does not override the Code or the law.
Confusing impartiality with integrity.
Both relate to honesty and fairness.
Fix: Integrity is about honesty and not misleading. Impartiality is about bias and conflicts of interest.
Recommending that the actuary resign or report immediately in every case.
Students think the strongest action is always the best.
Fix: Recommend a proportionate step: raise the issue, document it, then escalate if it is not resolved.
Ignoring communication when the problem is a poor report.
Students focus on calculation errors and miss the audience.
Fix: Check whether assumptions, limitations and uncertainty are clearly stated for the reader.
Treating the Code as a replacement for the law.
Both deal with proper behaviour, so they seem the same.
Fix: State that the Code works alongside the law and regulation. Compliance means following both.

Worked examples

Example 1

An actuary is asked to value a pension scheme. She has worked only on life insurance products and has never done pension work. The client wants the report in two days. What should she do under the Actuaries' Code?

Show the solution

Facts: the actuary lacks pension experience and there is time pressure.
Principle engaged: competence and care. She should only do work she is competent to do.
Compliance and communication may also be relevant, because the report must meet standards and be clear.
Action: tell the client about her limits, ask a suitably experienced actuary to do or supervise the work, or decline.
If she goes ahead with support, she must take due care and document the review.

Answer: She should not accept the work unsupervised. Under competence and care, she should be open with the client and get an experienced pensions actuary to lead or review the work, or decline.

Example 2

An actuary advising a company's board discovers that the finance head has asked her to leave out a key risk from a report to make results look better. Which principles apply and what should she do?

Show the solution

Facts: a request to omit a key risk, so the report would be misleading.
Integrity: she must not mislead. Omitting a key risk would do that.
Communication: the report must state material assumptions, limitations and risks clearly.
Compliance: relevant standards and law may require disclosure of material information.
Action: refuse to omit the risk, explain why to the finance head, and document the exchange.
If the pressure continues, speak up by raising it with the board or audit committee or the appropriate authority.

Answer: She should include the risk in the report. Integrity, communication and compliance all require it. If the pressure continues, she should speak up through the proper channel and keep a record.

Exam tips

Always link the principle to a fact in the scenario. A bare list earns few marks.
Most scenarios engage more than one principle. Name the main one first, then add the others.
Give a practical action, not only a verdict. Examiners look for what the actuary should do next.
Use the principle names and wording given in your IAI study material, and explain the meaning in your own words.
In multiple-choice questions, prefer the option that is open, lawful and protects the public interest.

Practice questions from Characteristics of a profession and the Actuaries' Code

The Actuaries' Code: Principles and Rules: frequently asked questions

What are the main principles of the Actuaries' Code?

They cover integrity, competence and care, impartiality, compliance, speaking up and communication. Check the exact grouping and wording in your IAI study material, as versions can differ. Learn what each requires, not just the names.

How do I apply the Actuaries' Code to a case study?

List the facts, match each to a principle, say what the principle requires, and judge whether the actuary met it. Then recommend a practical action such as disclosing a conflict, seeking help or escalating a concern.

What is the difference between integrity and impartiality?

Integrity means being honest and not misleading anyone. Impartiality means keeping your advice free from bias and unmanaged conflicts of interest. A scenario can breach one without the other.

When must an actuary speak up?

When the actuary sees something that is, or may be, improper or unlawful. The actuary should raise it through the right channel, keep a record, and escalate if it is not dealt with.