IAI Actuarial Core Principles · Business Management · Professional negligence

Kavya, an actuary, follows an approach to pricing a health product that a respectable body of her peers in India would support, though another body of actuaries would have chosen differently. The insurer later sues for negligence. Which statement best reflects the likely legal position?

Kavya is not necessarily negligent. Where a responsible body of professional opinion supports her approach and it withstands logical scrutiny, courts do not find breach merely because other actuaries would have chosen differently. Majority support is not required.

1. AShe is negligent, because any difference of professional opinion proves breach
2. BShe is negligent unless the approach was the majority view
3. CShe is not necessarily negligent if the approach is supported by a responsible body of professional opinion that can withstand logical scrutinyCorrect
4. DShe is not negligent merely because the approach was written down
5. She is negligent unless the insurer approved the approach in advance