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Summer Quiz, Part III: The ASOPs

Summer Quiz, Part III: The ASOPs

Professionalism Counts, August 2025

This third and final part of our summer professionalism quiz series focuses on the actuarial standards of practice (ASOPs). As you enjoy the last few days of summer (or just take refuge from the heat before cooler weather entices you outdoors), try the questions below and see how you do.1 Note that multiple choice questions may have more than one correct answer.  

  1. With respect to the ASOPs, which of the following statements are true? 
    1. Precept 3 of the Code of Professional Conduct requires that actuarial services performed under the actuary’s supervision meet applicable standards. 
    2. ASOP No. 41, Actuarial Communications, sets forth what is required when an Actuary deviates from an ASOP. 
    3. The binding guidance of an ASOP includes the Transmittal Memorandum and Appendixes. 
    4. All of the above 
  1. Which of the following statements are true with respect to ASOP No. 1, Introductory Actuarial Standard of Practice?
    1. It applies to all practice areas. 
    2. “Deviation” is defined as departing from the guidance of an ASOP. 
    3. A term defined in ASOP No. 1 applies to all ASOPs.  
    4. It recognizes actuaries may have to deal with situations not anticipated by the ASOPs.
  1. An item, or combination of items, is _______ if its omission or misstatement could influence a decision of an intended user. 
    1. Material 
    2. Statistical 
    3. Significant 
    4. Dormant 
  1. Failure to follow a course of action denoted by the following term(s) constitutes a deviation from the guidance of the ASOP: 
    1. May 
    2. Should 
    3. Should consider 
    4. Could
  1. Under ASOP No. 23, Data Quality, which of the following statements are true? 
    1. The actuary is not required to perform an audit of the data (as “audit” is defined in the standard). 
    2. The actuary may rely on data supplied by others, subject to the guidance contained in the standard. 
    3. When an actuary relies on data supplied by others, a review of the data is not required. 
    4. All of the above 
  1. When performing a review of data, the actuary should always do the following: 
    1. Make a reasonable effort to determine the definition of each data element used in the analysis. 
    2. Determine whether data or other information supplied by others are falsified or intentionally misleading. 
    3. Compile additional data solely for the purpose of searching for questionable or inconsistent data. 
    4. Perform an audit of the data. 
  1. The accuracy and completeness of data supplied by others are the responsibility of those who supply the data. 
    1. True 
    2. False
  1. Under ASOP No. 41, which of the following statements are true? 
    1. The standard does not apply to oral communications. 
    2. The standard generally does not apply to marketing brochures. 
    3. An actuarial communication should disclose the extent of reliance on other sources for data or other information. 
    4. None of the above 
  1. Which of these should be disclosed within an Actuarial Report? 
    1. Any conflict of interest 
    2. Acknowledgement of qualification 
    3. Cautions about risk and uncertainty 
    4. Any subsequent events 
  1. An actuary who makes an actuarial communication assumes responsibility for it, except to the extent the actuary disclaims responsibility by stating reliance on other sources. 
    1.  True
    2. False
  1. An actuary using a model developed by others in which the actuary is responsible for the model output is subject to ASOP No. 56, Modeling. 
    1. True 
    2. False
  1. Under ASOP No. 56, Modeling, which of the following statements are true? 
    1. When relying on models developed by others, the actuary should state the extent of such reliance. 
    2. When relying on data provided by others, the actuary should refer to ASOP No. 23 and ASOP No. 41. 
    3. When issuing an actuarial report, the actuary should not disclose any material inconsistencies among assumptions. 
    4. None of the above 

Answers

    1. A and B. ASOP No. 1, section 3.2,

    1. A, B, C, D. ASOP No. 1, sections 1, 2.4, 2, and 3.1.3.

    1. A. ASOP No. 1, section 2.6.

    1. B. ASOP No. 1, section 2.1.

    1. A and B. ASOP No. 23, sections 3.8, 3.5, and 3.4.

    1. A. ASOP No. 23, sections 3.3 and 3.8.

    1. True. ASOP No. 23, section 3.5.

    1. B and C. ASOP No. 41, sections 1.2, 3.4.3, and 4.1(g)

    1. A, B, C, D. ASOP No. 41, section 4.1.3.

    1. True. ASOP No. 41, section 3.4.3.

    1. True. ASOP No. 56, section 1.2.

    1. A and B. ASOP No. 56, sections 3.5, section 3.3, and section 4.1.