IAI Actuarial Core Principles · Business Management · Professional negligence

An actuary at a Mumbai life insurer certifies the reserves of a new product. The insurer later alleges negligence. Under the general Indian law of professional negligence, which test is used to judge whether the actuary breached the duty of care?

Breach is judged by whether the actuary acted as a reasonably competent actuary with ordinary professional skill would have acted. The test is objective, not perfection, not the actuary's own belief, and not merely whether loss occurred afterwards.

1. AWhether the actuary's work was the best that any actuary in India could have produced
2. BWhether the actuary acted as a reasonably competent actuary exercising ordinary skill would have actedCorrect
3. CWhether the insurer suffered any financial loss after the certification
4. DWhether the actuary personally believed the work to be adequate
5. Whether the actuary charged a fee lower than the market rate