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IAI Actuarial Core Principles · Business Management · Activities of the Institute of Actuaries of India

A pension consultancy in Chennai asks a second actuary, who was not involved in the valuation, to examine the assumptions, calculations and draft report before it goes to the trustees. What is the principal benefit of this peer review?

The main benefit of peer review is an independent check that can catch errors and weak judgement before the trustees rely on the advice. It does not shift responsibility from the lead actuary, guarantee future results, or waive documentation and standards.

  1. AIt transfers all professional responsibility for the advice from the lead actuary to the reviewer
  2. BIt guarantees the valuation results will agree with actual future experience
  3. CIt provides an independent check that can detect errors and weak judgement before the advice is relied uponCorrect
  4. DIt removes the need for the lead actuary to comply with professional standards
  5. It allows the report to be issued without documenting the assumptions

Explanation

Peer review gives an independent challenge that can catch errors, inappropriate assumptions or poor communication before reliance. The lead actuary remains responsible, and review cannot guarantee future outcomes or replace standards and documentation.

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