Actuarial Standards & Ethical Guidelines 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 Actuarial Standards & Ethical Guidelines flashcards as text
Under Precept 1 of the CAS Code of Professional Conduct, an actuary must perform actuarial services with integrity. This primarily means the actuary must:
Answer: Be honest and straightforward and not engage in any act of fraud or deceit
Precept 1 requires actuaries to act with honesty and to refrain from fraud, deceit, or misrepresentation in all professional activities.
ASOP No. 25 (Credibility Procedures) applies when an actuary uses credibility theory. Which of the following is a key requirement of that standard?
Answer: The actuary must select credibility procedures appropriate for the purpose and disclose any limitations
ASOP No. 25 requires selecting a credibility procedure appropriate to the purpose and disclosing significant limitations of the approach.
When an actuary acts as an 'expert witness' in litigation, the CAS Code requires the actuary to:
Answer: Provide objective and honest testimony regardless of which party retained them
Expert witness testimony must be objective and truthful; an actuary cannot act as an advocate rather than an impartial expert.
An actuary signs a Statement of Actuarial Opinion for a P&C insurer and later discovers new information that would change the opinion. The actuary's responsibility is to:
Answer: Advise the principal and determine whether an amended or supplemental opinion is required
Post-issuance material new information triggers a duty to advise the principal and consider whether an amended or supplemental opinion is necessary.
Which of the following best describes the purpose of the Actuarial Standards Board (ASB)?
Answer: To promulgate Actuarial Standards of Practice (ASOPs) that apply to actuarial practice in the United States
The ASB is the independent body responsible for developing and issuing ASOPs that govern US actuarial practice.
An actuary may NOT rely on the work of another actuary without qualification if:
Answer: The actuary has reason to believe the other actuary's work is incorrect or inappropriate
Reliance on another actuary's work is only appropriate when the relying actuary has no reason to question its correctness or suitability.
Under the CAS Code, an actuary who is pressured by a supervisor to sign an actuarial opinion the actuary believes to be misleading should:
Answer: Refuse to sign and, if necessary, resign from the engagement rather than issue a misleading opinion
Supervisory pressure does not excuse an actuary from the duty to avoid misleading communications; refusal or resignation is required.