IAI Actuarial Core Principles · Business Management · Characteristics of a profession and the Actuaries' Code
An actuary is asked by a client to present results to non-technical directors. The model shows a wide range of outcomes, but the client asks that only the most favourable scenario be shown to support a product launch. Which action is most consistent with the Actuaries' Code?
The actuary should present the results fairly, including the range of outcomes and key uncertainties, in language the directors can understand. The Code requires communication that is clear and not misleading, so showing only the favourable scenario or burying the audience in technical detail would be wrong.
- AShow only the favourable scenario, as the client chooses the content
- BPresent the results fairly, including the range and key uncertainties, in language the directors can understandCorrect
- CPresent all the technical detail without explanation so nothing is omitted
- DRefuse to present anything at all
- Show the favourable scenario and mention the others only if asked
Explanation
The Code requires communication that is clear, fair and not misleading, including the uncertainty and limitations. Showing only favourable results misleads, while an unexplained data dump is not clear communication for a lay audience. Refusing to present is unnecessary.
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