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IAI Actuarial Core Principles · Business Management · Skills and knowledge for working as an actuary in financial services

A Bengaluru actuary finishes a pricing exercise and presents the result to the product committee, explaining the key assumptions, limitations and uncertainties in plain language. Which aspect of the Actuarial Control Cycle and professional practice does this primarily support?

This supports effective communication, so decision makers understand the assumptions, limitations and uncertainties and can act on the advice. It does not remove the need for monitoring or peer review, nor guarantee outcomes, nor remove the actuary's professional responsibility.

  1. ACommunication that lets decision makers understand the risks and act on the adviceCorrect
  2. BReducing the need for any later monitoring
  3. CGuaranteeing that the experience will match the assumptions
  4. DReplacing the peer review of the work
  5. Avoiding any liability for the future results

Explanation

Clear communication of assumptions, limitations and uncertainty lets decision makers use the advice properly. It does not remove monitoring or peer review, guarantee outcomes, or remove professional responsibility.

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