IAI Actuarial Core Principles · Business Management · Professional negligence
Priya Desai, an actuary, gives a casual opinion on a reserving approach at a social gathering to Rohan, a friend who runs a small insurer. She says clearly that it is an off-the-cuff view and he should seek proper advice. Rohan acts on it and loses money. Which factor most weakens a claim that Priya owed a duty of care?
The informal setting and her express warning show Priya did not assume responsibility for Rohan's reliance. A duty for advice depends on assumed responsibility and reasonable reliance, which her disclaimer undermines, despite her qualification and his loss.
- APriya is a qualified actuary
- BRohan suffered a financial loss
- CRohan actually relied on the comment
- DThe setting and her express disclaimer indicate she did not assume responsibility for his relianceCorrect
- Priya and Rohan are friends
Explanation
Liability for advice depends on assumption of responsibility and reasonable reliance. An informal setting plus a clear warning to seek proper advice indicates no such assumption, making reliance unreasonable. Qualifications, loss and actual reliance do not by themselves create a duty.
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