CAS Communication and Stakeholder Management 2

Question 1

When presenting reserve estimates to a non-technical board of directors, an actuary should primarily focus on:

Accepted Answer

The range of reasonable estimates and key assumptions driving uncertainty

Answer

Non-technical audiences need context around uncertainty and key drivers, not mathematical detail.

Question 2

An actuary discovers that a preliminary reserve estimate provided to management was materially understated due to a data error. The best course of action is to:

Accepted Answer

Immediately notify management and provide a corrected estimate with explanation

Answer

Prompt disclosure of material errors is required under actuarial standards of practice and professional ethics.

Question 3

Which communication approach is most appropriate when an actuary's conclusion differs significantly from management's preferred outcome?

Accepted Answer

Present findings objectively and clearly explain the basis for the actuarial conclusion

Answer

Actuaries must maintain independence and present objective findings even when they conflict with management expectations.

Question 4

A principal asks an actuary to present reserve results without disclosing the range of uncertainty. The actuary should:

Accepted Answer

Include the uncertainty range regardless, as omitting it would be misleading

Answer

Omitting material uncertainty information would render the communication misleading under ASOP standards.

Question 5

When communicating with a regulator about reserve adequacy, an actuary should:

Accepted Answer

Be transparent about methodology, assumptions, and any significant limitations

Answer

Regulators require full transparency including methodology, assumptions, and limitations to fulfill their oversight role.

(CAS) Casualty Actuarial Society Practice Test

(CAS) Casualty Actuarial Society Practice Test

CAS Communication and Stakeholder Management 2