Professionalism Counts, January 2026
Honesty. Integrity. Competence. These three words lie at the heart of Precept 1 of the Code of Professional Conduct and form the foundation of actuarial professionalism. Indeed, these principles are so important that they underpin the rest of the Code and everything an actuary does—whether in the provision of actuarial services or otherwise.
What exactly does Precept 1 require? Precept 1 states “An Actuary shall act honestly, with integrity and competence, and in a manner to fulfill the profession’s responsibility to the public and to uphold the reputation of the actuarial profession.”
Precept 1 is all about maintaining the public’s trust in the profession. Because actuaries have specialized knowledge and training, users of an actuary’s work, who do not have such knowledge and training, must trust that the actuary is providing high-quality services competently and honestly. As a result, actuaries are responsible not just to their principals, but to the public, and work to ensure that insurance companies and pension plans remain solvent and able to pay the claims and benefits that people rely on.
Sound actuarial practice relies on sound professional judgment, which in turn depends on honesty, integrity, and competence. Whether an actuary is determining if they are qualified to perform an assignment, what standards of practice apply, and how to apply them, honesty, integrity, and competence form the basis of sound decision-making that the public can trust.
The four annotations of Precept 1 elaborate on the basic requirement of integrity and competence. Annotation 1-1 requires the actuary to “perform Actuarial Services with skill and care.” Obviously, skill and care are needed when performing actuarial work, but a lack of skill and care is often cited in Academy public discipline notices. In just one example, last year the Academy publicly reprimanded an actuary for, among other things, “failing to… exercise appropriate skill and care when calculating statutory policy reserves and performing a gross premium valuation …”
Annotations 1-2 and 1-3 require actuaries to behave with honesty and integrity, even in the face of pressure from principals. Annotation 1-2 prohibits providing “Actuarial Services for any Principal if the Actuary has reason to believe that such services may be used to violate or evade the Law or in a manner that would be detrimental to the reputation of the actuarial profession,” while Annotation 1-3 forbids using “a relationship with a third party or with a present or prospective Principal to attempt to obtain illegal or materially improper treatment from one such party on behalf of the other party.”
Annotation 1-4 restates ideas from Precept 1 itself, albeit in the negative, prohibiting “any professional conduct involving dishonesty, fraud, deceit, or misrepresentation or … any act that reflects adversely on the actuarial profession.”
Throughout Precept 1, the focus is on honesty and upholding the reputation of the actuarial profession. Note that the requirement to act honestly, with integrity, and to not “commit any act that reflects adversely on the actuarial profession” extends beyond the provision of actuarial services. In 2018, two actuaries were expelled from the Academy, one for securities fraud and one for tax fraud. Neither case involved actuarial work, and both discipline notices stated that the actuary’s actions “reflect adversely on the actuarial profession and undermine the profession’s responsibility to the public in violation of Precept 1 ….”
Maintaining Trust
The public benefits from actuaries’ integrity, but actuaries do, too. When the public knows that actuaries are subject to a Code of Professional Conduct, they have greater trust and confidence in the profession. By upholding the public’s trust, the profession maintains the privilege of self-regulation. The Academy plays a large role in helping actuaries maintain the public’s trust by housing the committees and boards that create and maintain the standards of conduct, qualifications, and practice for the profession.
But trust is fragile—once lost, it is difficult to regain. A single actuary who acts in a way that reflects adversely on the profession can undermine public trust in the entire profession. That’s why it is so important for every actuary to exhibit integrity and competence every day—even in situations when it is not always easy to do so. The profession and the public depend on it.
work, visit the Retirement Public Policy page.