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IAI Actuarial Core Principles · Business Management · Characteristics of a profession and the Actuaries' Code

A newly qualified IAI member says that, because the IAI is self-regulating, the profession needs no external oversight. Which is the strongest reason to disagree?

The strongest reason is that actuarial work affects policyholders and pension members who cannot judge it themselves, so statutory and regulatory oversight complements professional self-regulation to protect the public interest. The IAI does set standards, examinations and discipline, and actuaries are not exempt from negligence claims.

  1. ASelf-regulation never involves disciplinary powers
  2. BActuaries are exempt from professional negligence claims
  3. CProfessional bodies cannot issue standards of practice
  4. DActuarial work affects the public through insurance and pensions, so statutory and regulatory oversight complements professional self-regulation to protect the public interestCorrect
  5. The IAI has no power to set examinations

Explanation

Actuarial advice affects policyholders and pension members who cannot assess it themselves, so public-interest protection is supported by statute and regulators alongside the IAI's own standards and discipline. The other options are factually wrong, as the IAI does set standards and examinations and has disciplinary powers.

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