IAI Actuarial Core Principles · Business Management · Skills and knowledge for working as an actuary in financial services
Meera, a newly qualified actuary at an Indian life insurer, is asked by her manager to sign off a reserving report using an assumption she believes is unjustifiably optimistic. The manager says the assumption helps the company's solvency position. Which course of action is most consistent with acting as a professional?
She should decline to sign until the assumption is justified or its limitations are clearly disclosed. Professional integrity and independent judgement mean commercial pressure or seniority cannot override her duty to users of the report, and a private note or secret change does not protect them.
- ASign the report, because the manager is senior and carries responsibility for the result
- BSign the report but add a private note to her own files recording her disagreement
- CDecline to sign until the assumption is justified or its limitations are clearly disclosed in the reportCorrect
- DReplace the assumption with a pessimistic one without telling the manager
- Resign immediately without raising the issue with anyone
Explanation
A professional actuary must exercise independent judgement and cannot let commercial pressure override integrity. Signing with only a private note does not protect users of the report, and unilateral hidden changes or abrupt resignation fail to engage properly with the issue. Declining until justified or disclosed is correct.
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