session 2 - professionalism and ethics - bb.pptx

7/27/2019 Session 2 - Professionalism and ethics - BB.pptx

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Business Awareness & Critical Thinking

Session 2

• Professionalism and ethics

• The Actuaries’ Code • Case studies



What is professionalism and ethics?• What things would you expect from a professional?

• How would you define the term “ethics”?



The Actuaries’ Code: A modern statement of principles for a growing profession

• To whom does it apply?

•

When does it apply?

• What is it not?



Integrity:members will act honestly and with the highest

standards of integrity.

• Respect for others

•

Respect confidentiality• Honest, open and truthful



Competence and care:members will

perform their professional duties competently and with care.

• Appropriate level of relevant knowledge and skill

•

Appropriate to the needs of the client• Scope and remuneration to be agreed



Compliance:members will comply with all relevant legal,

regulatory and professional requirements, take reasonable steps

to ensure they are not placed in a position where they are unable

to comply, and will challenge non-compliance by others.

• Unlawful, unethical or improper

• Speak up

• Report



Open communication:members will communicate

effectively and meet all applicable reporting standards.

• Timely

•

Appropriate level• Accurate and not misleading



• Self-test questions & resources

•

http://participate.x10.mx




A. Fellows

B. ActuariesC. Professionals

D. Members

Those to whom the Code applies are referred to as…

A B C D



Under Status, the Code is…

A. For use by other professionals as

well as actuaries

B. Not a set of rules

C. Intended to cover all possible

circumstances

D. A document which can serve as

defence in a court of law

A B C D



What should members’ communication contain in

order to enable its subject matter to be put in proper

context?

A. Light hearted anecdotesB. Practical examples

C. References to the Actuaries’

CodeD. Sufficient information

A B C D



Mr A.N. Actuary, a member of the profession work for LMN consulting and is

negotiating a contract with a client XYZ. LMN consulting is being appointed byXYZ to advise on a number of actuarial matters. The Finance Director of XYZ

insists on a contingent fees basis in the contract stating that this is how XYZ

operates with all their other advisers. What action would be most

appropriate?

A. Accept the appointment only if the fee incomefrom XYZ represents a significant proportion of

LMN’s revenue.

B. Ensure that LMN consulting and A.N. Actuary have

sufficient professional indemnity cover.

C. Accept the appointment provided A.N. Actuary cansatisfy himself that his objectivity would not be

compromised by the conditions in the contract.

D. Decline the appointment – contingent fees should

not be accepted under any circumstances. A B C D



What should members do if they believe that a course

of action is unlawful, unethical or improper?

A. Resign from the project

B. Contact an appropriatecommittee

C. Put the matter in the hands of a

lawyer

D. Speak up to their clients or their

employer or both

A B C D



Members will take such steps as are sufficient and available to them to ensure that

any communication with which they are associated is X?

I=containing sufficient information to enable

its subject matter to be put in proper context

II=available in Braille

III=accurate

IV=mot misleadingV=produced in accordance with the scope of

the original appointment or instruction

What list would you ascribe to X?

A. I,II,VB. I,III,IV

C. II,III,IV

D. III,IV,VA B C D



Members will ensure that their ability to provide

objective advice is…

A. Not compromised

B. Checked periodically by legalprofessionals

C. In accordance with the wishes of

the President of the Institute

and Faculty of Actuaries

D. Approved by their firm’s

professional indemnity insurersA B C D



Members will agree with the client…

A. The level of actuarial resources

which will be deployed within

the appointment or instruction

B. Any key deadlines by which

interim or final delivery is

required

C. The scope and nature of anyappointment or instruction

D. The fees to be paidA B C D



Members will agree with the client the basis for their

remuneration before commencing an appointment or

instruction and before…

A. Seeking any credit references on the

client’s ability to pay

B. Checking the basis of remuneration

charged by other actuarial firms

C. Any material changes in the scope of

an existing appointment or instruction

D. Including proposed increased charge-

out rates to members working on the

appointment or instruction. A B C D



What should members take to ensure that they are not

placed in a position where they are unable to comply?

A. Records of all conversations and

electronic communications

B. Reasonable steps

C. Professional indemnity

insurance

D. The advice of a leading barrister

A B C D



The marketing actuary for insurance company XYZ has just been informed by the Board, on a

confidential basis, that XYZ has joined a cartel of insurance companies that is in the process of

agreeing major changes to the terms of core insurance products. The new terms will have the

appearance of being better value to customers, but in fact the majority will be worse off. This

change would dominate the market and would result in higher overall profits, but the marketing

actuary feels that this is unethical. Which of the following best describes how he should proceed?

A. Although the information is confidential, you should

considering disclosing it (if legal) because it would be inthe public interest to do so.

B. Your primary responsibility is to your employer and the

shareholders of company XYZ, so you should implement

the proposal irrespective of your own ethical views.

C. As marketing actuary, it is your responsibility to

differentiate yourself from competitors and for that

reason you should recommend not joining the cartel.

D. The information is confidential and you should therefore

not discuss it with anyone outside the Board of XYZ.

A B C D




• Be aware

•

Document thoroughly• Audit trails

• Watch out for the obvious and the subtle



The Actuaries’ Code – questions?

session 2 - professionalism and ethics - bb.pptx

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