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IAI Actuarial Core Principles · Business Management · Activities of the Institute of Actuaries of India

Anita Rao is the appointed actuary of a health insurer in Chennai. Before her valuation report goes to the board, the CFO suggests it be reviewed by another qualified actuary not involved in preparing it. What is the principal benefit of this peer review?

Peer review gives an independent check by a competent actuary on the work, assumptions and conclusions, which improves quality and lowers the chance of undetected error. It does not transfer responsibility from the signing actuary or relax the Actuaries' Code or documentation needs.

  1. AIt transfers legal responsibility for the report from Anita to the reviewer
  2. BIt provides an independent check on the reasonableness of the work, assumptions and conclusions, improving quality and reducing error riskCorrect
  3. CIt removes any need for Anita to follow the Actuaries' Code
  4. DIt guarantees that the valuation results will match the previous year's results
  5. It allows the report to be issued without documenting assumptions

Explanation

Peer review brings an independent, competent view that tests methods, assumptions and conclusions, catching errors and improving quality. It does not shift the signing actuary's responsibility or waive the Code or documentation duties.

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