IAI Actuarial Core Principles · Business Management · Professionalism and ethics case studies
Meera, an actuary at a Mumbai life insurer, is asked by her chief executive to present a profit projection that omits a known adverse mortality trend, so that a board approval is obtained smoothly. The omission would mislead the board but breach no written company policy. Which course of action best reflects the Actuaries' Code?
Meera should present the complete picture, including the adverse mortality trend, and explain its significance. Professional integrity and the duty to communicate clearly without misleading outweigh employer pressure, and omitting a known material fact misleads the board even without any written policy being breached.
- APresent the projection as requested because the employer's instructions override professional duties
- BPresent the full picture including the adverse trend, and explain its significance clearly to the boardCorrect
- CPresent the projection as requested but add a private note to her file
- DResign immediately without informing anyone of the reason
- Present the projection and leave the board to ask about trends if interested
Explanation
The Actuaries' Code requires integrity and communication that is clear and not misleading. Omitting a known adverse trend misleads the board even if no company policy is breached. Following the employer's instruction or waiting to be asked would fail the duty to communicate; a private note does not remedy the misleading advice.
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