IAI Actuarial Core Principles · Business Management · Professional negligence
Sunita, a qualified actuary, gives informal opinions at a social gathering to a friend, Ravi, about whether to buy an annuity. Ravi acts on the remarks and loses money. In deciding if a duty of care existed, which consideration is most relevant?
The relevant consideration is whether Sunita was acting professionally or knew Ravi would rely on her remarks as advice. Mere qualification does not make every casual comment a duty-bearing opinion; context and reasonable reliance decide whether a duty arose.
- AWhether Sunita is a qualified actuary, since this alone always creates a duty on every remark she makes
- BWhether Sunita was acting in a professional capacity or knew Ravi would rely on her remarks as advice, rather than merely chatting sociallyCorrect
- CWhether Ravi has ever attended an actuarial lecture
- DWhether the annuity was sold by a company registered in India
- Whether the conversation lasted longer than ten minutes
Explanation
Duty depends on the context: assumption of responsibility and the reasonableness of reliance. Casual social remarks are generally not treated as professional advice, though they might be if Sunita invited reliance. Qualification alone does not make every remark actionable.
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