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

An actuary at a consulting firm learns during an engagement for Company A that Company A is about to be acquired by Company B, which is also his firm's client. Company B has asked him for advice on the value of acquisition targets in the same sector. Which approach best reflects the Actuaries' Code on conflicts of interest and confidentiality?

He should identify and manage the conflict, using disclosure or information barriers, and must not use Company A's confidential information for Company B without consent. The Code requires conflicts to be managed and client confidentiality to be respected.

  1. AUse the information from Company A to improve the advice to Company B, since both are clients
  2. BIdentify the conflict, manage it through disclosure or information barriers, and not use Company A's confidential information for Company B without consentCorrect
  3. CIgnore the conflict because actuarial advice is always objective
  4. DResign from the professional body until the deal closes
  5. Tell Company B everything he knows because the acquisition is public interest

Explanation

The Code requires members to identify and manage conflicts and to respect confidentiality. Using one client's confidential information for another without consent breaches this. Objectivity claims do not remove the conflict.

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