Business Management · Professionalism and ethics case studies

IAI Code of Conduct and Professional Standards for Actuaries

Updated 11 October 2026 · Fact-checked

The IAI Code of Conduct sets the ethical principles every member must follow, such as integrity, competence and care for the public interest. Actuarial practice standards (APS) give more specific rules for particular kinds of work. In an exam, name the principle, apply it to the facts, then state the action.

Understand IAI Code of Conduct and Professional Standards

A profession is trusted because its members follow rules beyond the law and beyond what an employer wants. The Institute of Actuaries of India sets those rules for its members. The Code of Conduct is the ethical backbone. It is written as broad principles that apply to all members, in every practice area.

The principles cover themes that appear in most actuarial codes: acting with integrity, being competent and taking due care, following the law and the Institute's standards, being impartial when giving advice, communicating clearly, keeping client information confidential, and handling conflicts of interest openly. The wording and numbering of the current Code are set by the IAI. Read the current text on the IAI website and learn its headings.

Actuarial practice standards (APS) are different. They are narrower and more technical. An APS covers a specific area of work or a specific duty, for example what an actuary must do, consider or disclose when carrying out a certain type of task. Think of the Code as the 'why and what kind of person' and an APS as the 'how, for this job'.

Members must follow the standards that apply to their work. So the first question in any case is: which standard covers this task, and what does it require? Where no APS fits, the Code's principles still apply. Breaking the Code or a standard can lead to a complaint and action under the Institute's disciplinary process.

Case-study questions rarely ask you to recite text. They give a situation, such as pressure from an employer, a missing data check or a gap in your skills, and ask what the actuary should do. You score by linking the facts to a principle and giving a practical, defensible action.

Key rules to remember

Code versus APS: Code = broad ethical principles for all members; APS = specific standards for defined work; Use this one-line contrast in any 'difference between' question.
Which rule applies: Check the scope of the relevant APS first; if none applies, apply the Code principles; Only say an APS applies if the task falls within its scope. Do not invent APS numbers.
Answer pattern: Facts → principle → conflict or risk → action → record and communicate; A structure for any case-study answer.
Duty hierarchy: Law and regulation ≥ professional standards ≥ employer or client instructions; If an instruction conflicts with the law or the standards, the instruction does not win.
Core principle themes: Integrity, competence and care, compliance, impartiality, communication, confidentiality, conflicts of interest; A memory aid. Match it to the exact headings in the current IAI Code.

How to solve IAI Code of Conduct and Professional Standards questions

Use the same method for any case study on the Code or the standards. It keeps your answer structured and stops you from drifting into opinion.

1Read the scenario and list the facts: who is involved, what is being asked, and what pressure or risk exists.
2Identify the role: appointed actuary, consultant, employee, or reviewer. The duties depend on the role.
3Name the relevant Code principles, for example integrity, competence, impartiality or confidentiality, and say why each applies to these facts.
4Check whether a specific APS or legal requirement covers the task. Say so only if the scope fits. Otherwise say you would confirm the applicable standard.
5Decide the action: decline, seek help, disclose, escalate, document, or proceed with a stated limitation.
6Say how you would communicate: to whom, in writing, and with what caveats.
7Close with the likely consequence of not acting, such as harm to policyholders, loss of trust or disciplinary action.

Quickest way: Principle-Action-Record in three lines

When to use it: Use it for short written parts or when you are short of time at the end of the case-study paper.

Line 1: name the principle that is under threat, in one phrase.
Line 2: state the action, such as decline, disclose, escalate or seek review.
Line 3: state the record, such as a written note, a documented caveat or a letter to the client.
If time remains, add one sentence on the standard or law that supports your action.

Common mistakes in IAI Code of Conduct and Professional Standards

Treating the Code and APS as the same thing.
Both are called 'standards' in everyday talk, so they blur together.
Fix: Say the Code is broad ethical principles for all members and an APS is a specific standard for defined work.
Quoting APS numbers or titles from memory without being sure.
Students try to look well prepared.
Fix: Describe what a standard requires and name it only if you are certain. A correct principle with a safe description scores better than a wrong number.
Following the employer's instruction because 'the client is always right'.
Real work pressure feels stronger than the exam context.
Fix: State that the actuary's duty to the profession and the public interest outranks pressure to produce a convenient result.
Giving a one-word answer such as 'breach of integrity'.
Students recognise the principle but stop there.
Fix: Link the principle to the facts, then give an action and a way of recording it.
Jumping to resignation or reporting at once.
Students think the dramatic answer shows ethics.
Fix: Show a sensible escalation: clarify, document, raise internally, seek advice, then consider stronger steps if the issue stays unresolved.
Ignoring competence limits.
Students focus on dishonesty and forget that accepting work you cannot do is also a breach.
Fix: When the scenario involves unfamiliar work, say the actuary should decline, get training, or work with a suitably experienced colleague.

Worked examples

Example 1

You are the actuary at a small life insurer. The CFO asks you to change a mortality assumption to a more favourable one with no new evidence, so that the reported reserve falls before results are published. What should you do, and which principles apply?

Show the solution

Facts: the change is requested without supporting evidence, and the aim is a better reported result.
Principles: integrity, because assumptions must reflect your honest professional judgement; impartiality, because advice must not be shaped by the CFO's wishes; and the duty to follow the law and applicable standards.
Check for a standard: if an APS or legal requirement covers the valuation, the actuary must comply with it. Say you would confirm the one that applies.
Action: decline to change the assumption without evidence. Explain in writing that the change is not supported and what data would justify it.
Escalate if pressure continues: raise it with senior management, the audit committee or the board, as the firm's structure allows. Keep a record of the discussion.
Consequence: signing off a misleading result could harm policyholders and expose you to disciplinary action.

Answer: Refuse the unsupported change, document your reasons in writing, offer to revisit the assumption if evidence emerges, and escalate if pressure continues. The principles involved are integrity, impartiality and compliance with the law and standards.

Example 2

A consultant actuary with only life insurance experience is offered a pension scheme valuation by a long-standing client. Explain what the Code requires and what the actuary can do.

Show the solution

Facts: the work is outside the consultant's experience, and the client relationship creates pressure to accept.
Principle: competence and care. A member should take on work only if they have, or can obtain, the needed skills and knowledge.
Options: decline the work; or accept only if suitably qualified support is available, such as a pensions specialist who does the work or reviews it.
Standards: check whether any APS covers pension valuations or the type of advice required. Comply with it if it does.
Communication: tell the client plainly about the limits of your experience and the arrangements you propose, in writing.
Record: keep a note of the decision and the reasons.

Answer: The actuary should not accept the work on the strength of the relationship alone. Under the competence and care principle, they should decline, or accept only with qualified support, tell the client clearly, and follow any applicable APS.

Exam tips

Learn the headings of the current IAI Code from the IAI website and be able to match each to a short practical example.
In case studies, always name the principle and then tie it to a specific fact in the scenario. Marks usually come from the link.
Offer a sensible sequence of actions: clarify, document, raise, escalate. Avoid extreme steps unless the facts demand them.
If you are unsure of a standard's number or title, describe its purpose instead. Never invent one.
For 'difference between' questions, give a one-line contrast and one example each of the Code and an APS.

Practice questions from Professionalism and ethics case studies

IAI Code of Conduct and Professional Standards in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

IAI Code of Conduct and Professional Standards: frequently asked questions

What is the difference between the IAI Code of Conduct and actuarial practice standards?

The Code of Conduct sets broad ethical principles for all members, such as integrity and competence. An APS gives specific requirements for a particular kind of actuarial work. You must follow both where they apply.

Do I need to memorise the list of IAI actuarial practice standards?

For this exam, understanding what standards are and how they apply matters more than recalling a list. Read the current list on the IAI website. Name a standard in an answer only if you are sure of it.

Can an employer's instruction override the Code?

No. A member's duties under the law and the profession's standards come before an instruction to produce a convenient result. In a case study, say you would decline, explain in writing and escalate if needed.

How is this topic examined in the Business Management paper?

Expect a short scenario, such as pressure on an assumption, a conflict of interest or work outside your skills. You identify the principles at stake, say what the actuary should do, and explain how to communicate and record it.