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IAI Actuarial Core Principles · Business Management · Skills and knowledge for working as an actuary in financial services

Kavita, an actuary at a Chennai insurer, learns that a friend at a competing insurer will be rating a similar product. At a conference the friend asks Kavita for her company's unpublished pricing margins. What should Kavita do?

Kavita should decline to disclose. Her employer's unpublished pricing margins are confidential under the Actuaries' Code, and sharing them with a competitor may also raise competition law concerns. Reciprocity, promises of secrecy or approximations do not make disclosure acceptable.

  1. AShare the margins, since both are members of the same profession
  2. BShare them only if the friend promises to keep them confidential
  3. CDecline to disclose, as the information is confidential to her employer and sharing it could also raise competition concernsCorrect
  4. DShare approximate margins, since exact figures would be a breach
  5. Share them if the friend gives her competitor information in return

Explanation

The Actuaries' Code requires confidentiality of client and employer information unless disclosure is authorised or legally required. Exchanging pricing information with a competitor can also breach competition law. A promise of reciprocity or secrecy, or approximations, does not change this.

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