IAI Actuarial Core Principles · Business Management · Using data, company functions, people skills, influence and clear communication
Meera, an appointed actuary, finds that a draft summary prepared by the CFO of her Chennai insurer rewrites her advice to say that reserves are 'comfortably adequate'. Her own analysis shows adequacy only under the central scenario, with a shortfall under a plausible adverse scenario. The CFO asks her to sign it off to reassure the board. What is the most appropriate course of action?
She should decline to endorse the misleading wording, state her conclusions accurately including the adverse-scenario shortfall, and escalate if it is not corrected. The Actuaries' Code requires integrity and clear, non-misleading communication, which seniority or commercial pressure from the CFO cannot override.
- ASign it, since the CFO is senior to her and responsible for the company's communications
- BSign it and add a private note to the CFO that she disagrees
- CDecline to endorse the wording, communicate her conclusions accurately including the adverse-scenario shortfall, and escalate to the board or the regulator's channels if the misleading statement is not correctedCorrect
- DResign immediately without informing anyone of the reason
- Remove all scenario analysis from her report so that it cannot conflict with the summary
Explanation
The Actuaries' Code requires advice to be communicated clearly and not misleadingly, and requires members to act with integrity and not be influenced by commercial pressure. She should refuse the misleading wording, state the position accurately and escalate if needed. Signing, private dissent, silent resignation or deleting the analysis would all leave the board misinformed.
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