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 pressured by management to select assumptions that produce the lowest possible reserve estimate. The actuary believes the estimate would fall below the range of reasonable estimates. What should they do?
Answer: Refuse to select unreasonable assumptions and explain the professional obligation
An actuary must not adopt assumptions they believe produce unreasonable results; they should explain their professional obligation to management and refuse to comply.
Which ASOP provides guidance on risk evaluation in the context of property-casualty insurance, including uncertainty in loss reserves?
Answer: ASOP No. 43
ASOP No. 43, 'Property/Casualty Unpaid Claim Estimates,' addresses methods, assumptions, and documentation for P&C unpaid claim reserve estimates.
An actuary retires from practice but is later found to have committed a serious ethical violation while active. Can the CAS still pursue disciplinary action?
Answer: Yes, the CAS can pursue action against former members for violations committed during membership
Professional disciplinary processes can be pursued against former members for conduct that occurred during active membership, regardless of subsequent retirement.
Precept 13 of the CAS Code of Professional Conduct concerns which of the following duties?
Answer: Cooperating with investigations and disciplinary proceedings
Precept 13 requires CAS members to cooperate with the ABCD and other bodies conducting investigations or disciplinary proceedings.
When an actuarial report will be used by parties other than the commissioning client, the actuary should:
Answer: Identify all intended users and consider their needs in the communication
When multiple parties will use a work product, the actuary must identify all intended users and ensure the communication appropriately addresses their needs.
A newly hired actuary is asked by a supervisor to backdate an actuarial report. Which ethical principle is MOST directly violated?
Answer: Precept 1 — Integrity
Backdating a report is a dishonest act that directly violates Precept 1, which requires actuaries to act with integrity and avoid conduct that is fraudulent or misleading.
An actuary's work is subject to peer review. The peer reviewer disagrees with a key assumption. Under CAS standards, which outcome is acceptable?
Answer: The original actuary considers the feedback and documents their final decision with reasoning
Peer review is advisory; the original actuary must consider the reviewer's feedback but retains professional responsibility for their final assumptions and must document their reasoning.