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IAI Actuarial Core Principles · Business Management · Trusts and agency

An actuary advising a mutual fund trust learns confidential details of a planned portfolio restructuring. Before it is announced, he tells a friend who trades profitably on it. Which description best fits the actuary's position?

He breached his duty of confidentiality and the Actuaries' Code even without personal gain. Information received in a fiduciary or professional role must not be disclosed or misused, regardless of whether he was paid or the trust lost money.

  1. AHe is protected because the friend, not he, made the profit
  2. BHe breached confidentiality and his professional duty, even though he made no personal gainCorrect
  3. CHe has done nothing wrong unless the trust suffers a loss
  4. DHe is liable only if he was paid for the disclosure
  5. He is free to disclose as the information was not marked secret

Explanation

Confidential information obtained in a fiduciary or professional relationship must not be misused or passed on. Breach does not require personal gain or proof of loss, and information need not be marked secret if its confidential nature is evident.

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