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

The IAI Council is considering a proposal to issue a Guidance Note for members on a technical matter. Which statement best describes the status of professional standards issued by the Institute under its statutory powers?

Professional standards issued by the Institute are mandatory for members, and breach can lead to disciplinary action, whereas guidance notes are generally advisory unless they say otherwise. They do not bind companies directly, apply to more than Council members or students, and need no annual parliamentary approval.

  1. AMandatory standards bind members, while guidance notes are generally advisory unless a standard says otherwiseCorrect
  2. BAll guidance notes are binding in law on every company in India
  3. CStandards bind only the Council members who approved them
  4. DStandards apply only to students, not to qualified members
  5. Standards take effect only after being ratified by Parliament each year

Explanation

Professional standards issued by the Institute bind members, as a breach can lead to disciplinary action. Guidance is intended to help members apply standards and is generally not mandatory unless stated. The other options misstate who is bound or require unneeded parliamentary ratification.

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