IAI Actuarial Core Principles · Business Management · Professionalism and ethics case studies
Rohan, an actuary at a Mumbai life insurer, is asked by his manager to present a pricing assumption that he believes is too optimistic, so that a new product can be launched before quarter-end. Rohan's best first step in an ethical decision-making framework is to:
Rohan should first establish the facts, identify the ethical issue and check which professional principles apply, including the Actuaries' Code. Only after this analysis should he weigh options and act. Blind compliance, silence or immediate external escalation skip the essential structured analysis.
- AIdentify the facts and the ethical issue, and check which professional principles and rules apply to the situationCorrect
- BComply immediately, since the manager carries responsibility for the launch
- CResign from the insurer before discussing the matter with anyone
- DSend the assumption to a regulator before telling his manager
- Leave the assumption unchanged and say nothing, to avoid conflict
Explanation
Ethical frameworks begin by establishing the facts and identifying the issue and the relevant professional standards, such as the Actuaries' Code. Only then are options weighed and action taken. Complying blindly or escalating externally first skips this analysis, and staying silent is an abdication of professional duty.
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