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IAI Actuarial Core Principles · Business Management · Characteristics of a profession and the Actuaries' Code

Sunita, a Fellow of the Institute, is found by its disciplinary process to have knowingly issued a misleading certificate. Why does the existence of such a disciplinary mechanism matter most to the public standing of the profession?

A disciplinary mechanism matters because it shows the profession actually enforces its standards, which sustains public trust and justifies self-regulation. It does not guarantee error-free work, replace civil liability or indemnity cover, stop other regulators acting, or automatically compensate affected policyholders.

  1. AIt lets the Institute award damages to the affected policyholders directly in every case
  2. BIt shows the profession enforces its standards, which supports public trust in actuarial workCorrect
  3. CIt removes the need for actuaries to hold professional indemnity cover
  4. DIt prevents any other regulator from taking action against her
  5. It guarantees that no member will ever make an error

Explanation

Discipline demonstrates that standards are enforced, which underpins public confidence and justifies self-regulation. It does not replace civil liability, indemnity cover or other regulators, and it cannot guarantee error-free work.

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