Professional Ethics and Standards Flashcards
7 cards from real CAS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Professional Ethics and Standards flashcards as text
An actuary is simultaneously serving as a consultant to an insurer and sits on the board of a competing insurer. Under the Code of Professional Conduct, this situation primarily implicates which precept?
Answer: Precept 7 — Conflict of Interest
Precept 7 requires actuaries to disclose and manage conflicts of interest, including situations where dual roles may compromise objectivity.
What is the primary purpose of the Actuarial Board for Counseling and Discipline (ABCD)?
Answer: To investigate complaints and counsel actuaries on professional conduct
The ABCD investigates complaints against actuaries, provides counseling on ethical issues, and may recommend discipline for violations of the Code.
An actuary providing an actuarial communication must include a 'scope and intended purpose' statement primarily to:
Answer: Ensure the work product is used appropriately by its intended audience
Defining scope and intended purpose helps ensure the work product is properly interpreted and not misapplied by users outside the intended audience.
Under Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States, what is required for a P&C actuary to sign a loss reserve opinion?
Answer: ACAS or FCAS designation plus continuing education requirements
U.S. Qualification Standards require ACAS or FCAS membership and satisfaction of continuing education requirements to sign P&C loss reserve opinions.
A client instructs an actuary not to disclose a particular assumption in the actuarial report because it is proprietary. The actuary believes disclosure is required by ASOPs. What should the actuary do?
Answer: Decline to issue the report unless the disclosure is permitted
When client instructions conflict with ASOP disclosure requirements, the actuary must either obtain permission to disclose or decline to issue the opinion.
Which of the following is NOT a characteristic of an 'actuarial communication' as defined under ASOP No. 41?
Answer: Preliminary data provided by a third-party vendor
Data provided by a third-party vendor is not an actuarial communication; actuarial communications are prepared by the actuary and convey actuarial findings or opinions.
When a CAS actuary acts as an expert witness, which ethical obligation remains paramount?
Answer: Objectivity and presenting an unbiased actuarial opinion
Even when retained as an expert witness, an actuary must maintain objectivity and provide unbiased professional opinion regardless of which party retained them.