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FRM Part I · FRM Exam Part I · GARP Code of Conduct

A member at an insurer is offered an all-expenses-paid trip by a data vendor whose software the member will help select next month. The trip's value is substantial. Which statement best reflects the GARP Code of Conduct?

The member should decline the substantial trip and disclose the offer to the employer. The Code requires avoiding gifts that could reasonably compromise objectivity, and the pending vendor decision creates exactly that risk; a good final choice, leave timing, or after-the-fact disclosure does not cure it.

  1. AIt is acceptable if the member ultimately picks the best software
  2. BIt is acceptable if the trip is taken during personal leave
  3. CIt is acceptable if the member discloses the offer only after the vendor is selected
  4. DThe member should not accept a gift that could reasonably compromise objectivity, and should disclose the offer to the employerCorrect

Explanation

The Code requires members to avoid conflicts and not accept gifts or benefits that could reasonably be expected to compromise independence or objectivity, and to disclose potential conflicts. A good eventual choice, timing of leave, or late disclosure does not remove the appearance of compromised judgment.

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