IAI Actuarial Core Principles · Business Management · Actuaries Act, 2006 and IAI governance
A life insurer's appointed actuary privately knows that the insurer's reserves are inadequate. The Chief Executive asks him to delay mentioning this in his certificate until after the next fundraising round. Considering the Actuaries' Code and the statutory consequences of misconduct, what is the correct course?
He should report the true reserve position as required and resist the pressure. The Actuaries' Code places integrity and the public interest above employer wishes, and delaying, obscuring or silently resigning would risk misleading users and attract disciplinary and statutory consequences.
- ADelay the disclosure because the employer is the main client
- BDisclose only to the Chief Executive and leave further steps to him
- CResign silently without recording any reasons
- DReport the true position as required, resisting the pressure, since concealment would breach integrity duties and risk disciplinary and statutory consequencesCorrect
- Qualify the certificate with vague wording so it is technically accurate but uninformative
Explanation
The Code demands integrity and that the public interest and compliance with law override employer pressure. Deferring, vague wording or silent resignation would mislead users and could amount to misconduct inviting penalties. The vague-qualification option is tempting but still fails to communicate clearly.
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