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IAI Actuarial Core Principles · Business Management · Actuaries Act, 2006 and IAI governance

Priya has passed all her actuarial examinations and wants to understand why Parliament enacted the Actuaries Act, 2006. Which statement best describes the main purpose of the Act?

The Actuaries Act, 2006 exists to regulate and develop the actuarial profession in India, and it does this by constituting the Institute of Actuaries of India as a statutory body. It does not set premiums, solvency margins or insurance contract rules, which belong to insurance law.

  1. ATo regulate the premium rates charged by life insurers in India
  2. BTo provide for the regulation and development of the actuarial profession in India through the Institute of Actuaries of IndiaCorrect
  3. CTo set the solvency margins that insurance companies must maintain
  4. DTo establish a stock exchange for trading insurance-linked securities
  5. To replace the Insurance Act as the main law governing insurance contracts

Explanation

The Actuaries Act, 2006 is a statute about the profession itself. It provides for regulation of the profession of actuaries and its development by constituting the Institute of Actuaries of India as a statutory body. Premium rates, solvency margins and insurance contracts are governed by insurance legislation and the insurance regulator, not this Act.

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