IAI Actuarial Core Principles · Business Management · Skills and knowledge for working as an actuary in financial services
A newly qualified actuary at an Indian life insurer is asked by her manager to certify a valuation using a mortality table that she believes is outdated for the portfolio. She lacks experience with this class of business. What is the most appropriate course of action?
She should raise her concerns, seek review from a more experienced actuary, and ensure the work is competent before relying on it. Actuaries must work within their competence and use appropriate assumptions, and doing so transparently protects both the employer and the public interest.
- ACertify the valuation to avoid conflict with the manager
- BQuietly use her own preferred table without telling anyone
- CRaise her concerns, seek review from a more experienced actuary, and ensure the work is done competently before relying on itCorrect
- DRefuse any future valuation work permanently
- Wait for the regulator to discover the issue
Explanation
Actuaries should work only within their competence and ensure their advice is based on appropriate assumptions. Raising concerns and obtaining peer review satisfies this while remaining transparent. Certifying despite doubts or secretly substituting assumptions would be unprofessional.
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