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IAI Actuarial Core Principles · Business Management · Actuaries Act, 2006 and IAI governance

Karan, an IAI member, is accused of professional misconduct by a client. He argues the IAI cannot investigate because it is merely a voluntary professional club. Which response best reflects the position under the Actuaries Act, 2006?

Under the Actuaries Act, 2006, the IAI has statutory disciplinary machinery to inquire into misconduct allegations against members and impose penalties. This power does not rest on the member's consent, a prior regulator complaint or a court order.

  1. AThe IAI may act only if the insurance regulator first files a complaint
  2. BThe IAI has no power because only civil courts can discipline actuaries
  3. COnly the Central Government can discipline individual members
  4. DThe IAI may act only if the member consents to the inquiry
  5. The Act empowers the Institute, through its disciplinary machinery, to inquire into allegations of misconduct and impose penalties on membersCorrect

Explanation

The Act sets up disciplinary machinery within the Institute, which inquires into allegations of professional or other misconduct by members and can impose penalties, including reprimand or removal from the register. Disciplinary power does not depend on the member's consent, a regulator's complaint or a court. This follows from the IAI's statutory status, not from voluntary club rules.

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