IAI Actuarial Core Principles · Business Management · Characteristics of a profession and the Actuaries' Code
Vikram, an actuary at a general insurer, is asked by his manager to sign off a pricing model for a new product. Vikram has not worked on this line, and the deadline allows no time for training or peer review. The manager says the regulator filing will fail otherwise. Which response best reflects the Code and professional judgement?
Vikram should decline to sign until he has the necessary competence and review, explain the risks, and propose a realistic timeline or external support. The Code requires members to work only within their competence. Disclaimers, delegating to juniors or reviewing after filing do not remove the problem.
- ASign off, since the manager carries responsibility for the deadline
- BSign off but add a general disclaimer that he accepts no liability
- CDecline to sign until he has the competence and review needed, explain the risks, and propose a workable timeline or external supportCorrect
- DDelegate the sign-off to a junior colleague who is more familiar with the model
- Sign off and plan to review the model after filing
Explanation
Members must only undertake work they are competent to do and should obtain review or help when needed. Disclaimers cannot cure incompetence, and passing the task to a junior or reviewing afterwards shifts or delays the risk. Explaining the issue and offering solutions meets the duty.
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