Professionalism, ethics and communication of actuarial advice
This domain tests professional standards, ethical judgement and the communication of uncertain actuarial advice to boards, regulators and clients.
Core rules
- Actuaries' Code principles: integrity, competence and care, impartiality, compliance, and communication.
- Technical standards: TAS 100 for technical actuarial work and TAS 300 for insurance, plus peer review and documentation expectations.
- Communication: explain purpose, scope, data, methods, assumptions, uncertainty, limitations and materiality. Distinguish facts from judgement.
- Ethics: manage conflicts, protect confidentiality, escalate concerns and do not allow commercial pressure to override professional judgement.
Worked example
A reserving actuary estimates a central reserve of £90m with a range of £80m–£100m. The board asks for £85m to improve the reported result. The actuary should not select a number to meet a commercial target. They should explain that £85m is within the range but below the central estimate, show the sensitivity and disclose the judgement. If the board still prefers £85m, the actuary documents the advice, the board's decision and the rationale.
Traps that cost marks
Presenting a single number without uncertainty; omitting scope and limitations; failing to document a challenge; acting as an advocate for management; and breaching confidentiality in an example.
Exam tip
Structure advice as: issue → scope → method → assumptions → results → uncertainty → recommendation → limitations.