Indian Actuarial Profession
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Indian Actuarial Profession

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Indian Actuarial Profession

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Indian Actuarial Profession

Serving the Cause of Public Interest

Rishabh PrakashRamnath Shenoy

Indian Fellowship Seminar

Case I4: Eavesdropping


Case Details

Consultant to trustee of pension schemeConducted a review of investment strategyAlready discussed with investment committee:2 company (sponsor) appointed directorsFinance directorHuman resources directorOverhear a conversation on route – sketchy but source credibleDeals with potential sale of most stable parts of the sponsor’s business



Issues posed

What professional issues arise from the situation?How to deal with them?



Issues in light of Actuaries Code

IntegrityDiscussion of information could amount to “rumour mongering”Sketchy information shouldn’t disseminate furtherConfidentiality of the information needs to be respectedCompetence and CareInformation incomplete - the actuary heard bits of the conversationInformation not credible – not formal communication, could be wrongBut if true could have serious consequences on the fund



Issues in light of Actuaries Code

Impartiality“Members will not allow bias, conflict of interest, or the undue influence of others to override their professional judgement “The comments of the other actuary may amount to undue influence if the course of action is changed based on them



Issues in light of PCS

Confidentiality“As a matter of law, information acquired by an actuary in the course of professional work is frequently confidential to the actuary’s client or the actuary’s firm. As such, it should not normally be disclosed unless consent has been obtained from the actuary’s client or the actuary’s firm, as the case may be”Need to understand the level of confidentiality in the information and respect itStandards for Advice“An actuary must consider the extent to which it is appropriate to carry out investigations to assess the accuracy and reasonableness of any data being used”May not be advisable to form any opinion based on this informationInappropriate to do any investigation without confirmation



Steps we would take

Information not public may only be a rumourCannot discuss openlyHence:Won’t specifically broach the topic of the sell-off in the meetingGo ahead and discuss findings of investment strategy reviewOffer to make approach flexible by building in contingency scenariosBuild in sale of major parts of the business as a contingency scenarioReiterate employer/ sponsor covenantIf rumours gather steam: seek a meeting, confirm veracity of news, offer to overtly modify investment strategy



Thank you



Ramnath Shenoy