CAS Professional Ethics and Standards 3

Question 1

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?

Accepted Answer

Precept 7 — Conflict of Interest

Answer

Precept 7 requires actuaries to disclose and manage conflicts of interest, including situations where dual roles may compromise objectivity.

Question 2

What is the primary purpose of the Actuarial Board for Counseling and Discipline (ABCD)?

Accepted Answer

To investigate complaints and counsel actuaries on professional conduct

Answer

The ABCD investigates complaints against actuaries, provides counseling on ethical issues, and may recommend discipline for violations of the Code.

Question 3

An actuary providing an actuarial communication must include a 'scope and intended purpose' statement primarily to:

Accepted Answer

Ensure the work product is used appropriately by its intended audience

Answer

Defining scope and intended purpose helps ensure the work product is properly interpreted and not misapplied by users outside the intended audience.

Question 4

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?

Accepted Answer

ACAS or FCAS designation plus continuing education requirements

Answer

U.S. Qualification Standards require ACAS or FCAS membership and satisfaction of continuing education requirements to sign P&C loss reserve opinions.

Question 5

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?

Accepted Answer

Decline to issue the report unless the disclosure is permitted

Answer

When client instructions conflict with ASOP disclosure requirements, the actuary must either obtain permission to disclose or decline to issue the opinion.

(CAS) Casualty Actuarial Society Practice Test

(CAS) Casualty Actuarial Society Practice Test

CAS Professional Ethics and Standards 3