IAI Actuarial Core Principles · Business Management · Characteristics of a profession and the Actuaries' Code
An Indian life insurer's appointed actuary discovers that the board wants to present a more favourable solvency position to the regulator than the calculations support. The actuary is a member of the IAI. Which action is most consistent with the Actuaries' Code?
The actuary should refuse to mislead, explain the concerns to the board and escalate to the regulator where statutory duties require. The Actuaries' Code puts integrity and the public interest above the employer's wishes, so complying with the board or quietly changing assumptions would breach it.
- AFollow the board's wishes, since the board employs the actuary
- BResign immediately without informing anyone or documenting the issue
- CTell the regulator only after the next annual general meeting
- DMaintain integrity by refusing to mislead, explain the concerns to the board, and escalate to the regulator where statutory duties require itCorrect
- Change the assumptions quietly so the result looks acceptable to both sides
Explanation
The Code requires integrity and that members must not knowingly mislead. The actuary should raise the matter with the board, document it, and meet any statutory duty to report to the regulator. Following the employer or adjusting assumptions quietly would breach the Code.
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