IAI Actuarial Core Principles · Business Management · Professionalism and ethics case studies
Kabir, an actuary at a consultancy, discovers that his firm has two clients bidding for the same government pension mandate, and he has confidential pricing details of both. Which arrangement best protects confidentiality while allowing the firm to act?
The firm should set up separate teams with information barriers, inform both clients of the situation, and act only with their informed consent. Sharing or manipulating confidential pricing breaches the duty of confidentiality and integrity, while silent withdrawal leaves clients uninformed.
- ALet him lead both teams so he can balance the bids
- BShare each client's pricing details with the other to keep things fair
- CSeparate the teams with information barriers, tell both clients of the situation, and act only with their consentCorrect
- DAsk him to quietly lower one bid so the firm wins either way
- Stop all work for both clients without informing them
Explanation
Competing clients create a conflict that can be managed by separate teams, information barriers and informed consent. Sharing details or manipulating bids breaches confidentiality and integrity. Abruptly stopping without explanation fails the clients.
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