Professionalism Counts, June 2025
School may be out, but actuarial professionalism never takes a vacation. This summer, Professionalism Counts will bring you a series of short quizzes on the Code of Professional Conduct (the Code), the U.S. Qualification Standards (USQS), and actuarial standards of practice (ASOPs) to keep you sharp over the long, hot summer. [1]
TRUE/FALSE
1) Actuarial communication includes only signed and dated written communication issued by an actuary with respect to actuarial services.
❑ True ❑ False
2) An actuary in a senior management position who is no longer providing “actuarial services” (as defined in the Code) is not bound by the Code.
❑ True ❑ False
3) A violation of the Code must have a financial impact to be material.
❑ True ❑ False
4) An actuary is required to respond to any request for information from the Actuarial Board for Counseling and Discipline (ABCD) unless prohibited by applicable law or confidentiality requirements.
❑ True ❑ False
5) An actuary sees a potential conflict of interest with respect to a particular engagement but believes they can act fairly. To accept the engagement in good conscience, they must disclose the potential conflict to all principals who could be affected, and such principals must expressly agree to the actuary taking on the assignment.
❑ True ❑ False
MULTIPLE CHOICE
Note: More than one answer may be correct.
6) Which of the following could be a potential material violation of the Code?
a. Refusing to disclose confidential information
b. Understating reserves due to management pressure
c. Intentionally failing to file personal tax returns
d. Refusing to cooperate with a successor actuary
7) If a principal has given consent for a new or additional actuary to consult with an actuary with respect to a matter for which the actuary is providing or has provided actuarial services, the actuary should:
a. Cooperate in furnishing relevant information
b. Receive reasonable compensation for the work required to assemble and transmit pertinent data and documents
c. Not refuse to consult or cooperate with the prospective new or additional actuary based upon unresolved compensation issues with the principal unless such refusal is in accordance with a pre-existing agreement with the principal
d. Provide items of a proprietary nature, such as internal communications or computer programs
8) Under Precept 13, an actuary with “knowledge of an apparent, unresolved, material violation of the Code by another actuary” is obligated to:
a. Discuss the situation with the other actuary in an attempt to resolve it
b. Report the apparent violation to the ABCD whether resolved or not
c. Report the apparent violation even if such action would be contrary to law
d. None of the above
9) Which of the following are considered binding guidance for actuaries who are members of at least one of the five U.S. actuarial organizations?
a. ASOPs
b. Applicability Guidelines
c. The Code
d. The USQS
e. Practice notes
f. Professionalism discussion papers
ANSWERS
1.) False. The Code definition of Actuarial Communications also includes electronic and oral communication.
2.) False. Precept 1 always applies.
3.) False. Annotation 13-1 defines “material” as “important” or “affecting the outcome of a situation,” as opposed to “trivial,” “not affecting an outcome,” or “merely of form.” The Code does not state that a financial impact is necessary to make a violation material.
4.) True. Precept 14 addresses cooperation with “an appropriate counseling and disciplinary body of the profession.”
5.) True. The statement is a summary of Precept 7, Conflict of Interest.
6.) b), c), and d). With respect to answer a)
Precept 13 states: “The Actuary shall disclose such violation … except where the disclosure would be contrary to Law or would divulge Confidential Information.” Answer c) could violate Precept 1, Professional Integrity, which applies broadly to an actuary’s conduct.
7.) a), b), and c). Precept 10 does not require the actuary to share proprietary material.
8.) d). All statements are false: Precept 13 encourages an actuary to discuss apparent violations with the other actuary but does not require it. If the issue is resolved, there is no need to report. Finally, Precept 13 states that disclosure should not be made where such action would be contrary to law.
9.) a), c), and d). ASOPs, the Code, and the USQS are binding guidance. The Applicability Guidelines, discussion papers, and practice notes provide useful information, but actuaries are not required to follow them.
[1] “Professionalism Counts” thanks former ABCD member Allan Ryan and the Committee on Professional Responsibility, c. 2018-19, for the inspiration for this piece.