IAI Actuarial Core Principles · Business Management · Professionalism and ethics case studies
Rohan, a Fellow Actuary at a life insurer, is asked by his CEO to sign a certificate on reserve adequacy. His own analysis shows a shortfall, but the CEO says the Board prefers a clean certificate to avoid alarming policyholders. Which course of action best reflects the public-interest duty of an actuary?
Rohan should refuse to sign a certificate that misrepresents reserve adequacy and should report the shortfall as professional and regulatory rules require. Public interest and integrity take precedence over the employer's preference, and concealing the shortfall would breach the Actuaries' Code.
- ASign the certificate, since the employer's wishes take priority over the actuary's own view
- BSign the certificate but verbally mention the shortfall to the CEO afterwards
- CDecline to sign a certificate that misstates the position, and report the shortfall in line with professional and regulatory requirementsCorrect
- DResign immediately without informing anyone of the shortfall
- Sign it with the shortfall disclosed only in an internal file note
Explanation
An actuary's duty to the public interest and to integrity overrides employer preference. Signing a misleading certificate would breach the Actuaries' Code. The options that hide or only informally mention the shortfall still leave users of the certificate misled.
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