The importance of documentation

The importance of documentation

All professionals are aware of the importance of keeping good records to ensure that files are well managed
and work is documented. For actuaries, keeping good records allows them to look back at their working, the
correspondence with the client and the sources of data. It also allows the actuary to demonstrate compliance
with whichever requirements or processes their work is subject to, in case a problem arises.
Actuaries are constantly exerting professional judgement, thinking critically and drawing conclusions from
the information to hand, and it’s therefore useful to record these processes.
In a fast paced, demanding working environment, it is tempting to focus on the work at hand, and not take the
time to ensure that files are kept up to date. However Members must be mindful of the risks in doing so.
In the video Mirror Mirror, we see Sue, the client, and Fred, their actuary, preparing for an interview with an
Investigating Actuary, after Sue has submitted a complaint about Fred to the IFoA. View the video and
consider the questions below.

Questions:

1. There are differing opinions between Sue and Fred as to what he was asked to do and each make a
reasonable case – how might this confusion have been avoided?
2. Communication is clearly an issue here – how might that have been better handled?

It’s not possible to remember everything from all projects, particularly when there are a number on the go at
the same time. If one decision was called into question, there is no guarantee you could demonstrate the steps
taken, without any documentation.
Even before the actuary embarks on their work, there are decisions to be made. Instructions from a client have
to be carefully considered and the work properly scoped, with any necessary caveats provided. Letters of
appointment or engagement often serve as a good recording device, setting out the terms upon which they are
acting.
In considering the scope of the work the actuary must also have consideration to the standards that are
applicable. Different standards apply to different pieces of work, so it’s imperative the actuary properly scopes
the work and informs the client which standards will be applied.
It’s worth documenting reasoning in reaching conclusions, not only to remind yourself in the future, but also
to demonstrate to anyone that questions that decision.
The Actuaries' Code also requires Members to make assessments in determining how to apply their
obligations. Under the Speaking up principle Members “must take reasonable steps to ensure users are aware
of any substantial issues with a piece of work for which they are responsible or in which they have had
significant involvement, if those issues might reasonably influence the decision-making or judgement of
users.”
The Member must therefore consider whether the issue identified might have a bearing on the user. They are
also required to take “reasonable steps” which again means assessing what is “reasonable” and appropriate
in the circumstances, taking into account all relevant factors.
The Code also requires that Members “must not act where there is an unreconciled conflict of interest.”
Reconciling a conflict of interest can be a complex task that likely involves seeking permissi on from other
parties to continue to act, or putting some mechanisms in place to ensure the conflict has no impact on the
users.
In all circumstances it is wise to document the actions taken, the decisions made and the conclusions reached.

The importance of checking and peer review

To ensure there are checks on the quality of actuarial work it is important that it is checked before being sent
to the user. Such a check or review is a mechanism by which the Member can get a second opinion on the
technical aspects of the work, their calculations, and that the correct standards have been applied.
The IFoA has in place Actuarial Profession Standards X2 (APS X2): Review of Actuarial Work which
requires Members to consider if it is appropriate and proportionate to apply a work review to the actuarial
work for which they are responsible.
In making this determination they must also decide the form the review should take; should it be an
'independent peer review' or a 'work review'? The work review process must then be applied in an
appropriate and proportionate manner.
The definition of 'actuarial work' is broad. The Member must therefore exercise a great deal of professional
judgement in deciding in what circumstances a review should be carried out, and the form the review should
take.
When the Member determines a review is not required, they should consider whether the user of the
actuarial work should be informed of this.
Employers should have systems of checking set up, with which the Member should comply. However the
Member should make their own mind up as to whether there is enough checking to meet their professional
requirements.
There may be situations where it is difficult to identify someone with the appropriate skills and knowledge
to undertake a work review. There are a number of approaches which might be helpful such as seeking help
from your employer, or from actuarial networks such as your local association, or the IFoA's Professional
Support Service
In this next video we see Alex Trevalyn, an actuary who is the subject of a complaint and undergoing
questioning at a Disciplinary Tribunal. Alex tries to defend his actions under criticism from the lawyer
leading the evidence.
Professional Support Service
The Professional Support Service (PSS) is a free support service for Institute and Faculty of Actuaries
(IFoA) members

We aim to provide all members with an opportunity to benefit from our experienced panel members' views
on professional and technical actuarial matters. Members are invited to submit questions on the application
of the following professional and technical standards:

 Actuaries' Code
 Actuarial Profession Standards (APSs) and Guidance Notes (GNs)
 Technical Actuarial Standards (TASs) issued by the FRC

The Professional Support Service also invites inquiries relating to ethical dilemmas which you may
encounter in the course of your actuarial work.

You can now submit your query to the Professional Support Service via our online submission form.

Monitoring changes to Professional Standards

The IFoA is careful to keep Members informed of changes to IFoA and FRC standards. This is done through
the publication of newsletters, articles on the website, in The Actuary magazine, and if necessary ad -hoc
emails to Members.
In cases where an unusual issue has arisen that the IFoA feels it is important to raise awareness of in the
profession a 'Risk Alert' might be sent out.
It is important that Members therefore ensure that they are subscribed to the relevant newsletters, that they
check the website regularly and consult The Actuary magazine. They must also keep their IFoA record up to
date so the correct email address is available.
Members should also take the time to attend events run by local societies and the IFoA where proposals or
updates of standards might be discussed. Many organisations also have procedures in place to keep their IFoA
Members updated and ensure in-house practice reflects those standards.

Determining which standards apply

A degree of professional judgement has to be exercised by the Member in determining what standards to apply
before commencing a piece of work. Being close to the work and being aware of the context and circumstances
means the Member is best placed to make this determination, but the Member should also ' stand back' and
consider the professional requirements on their own merits.
The IFoA provides assistance to Members in making this decision through the publication of guidance to
accompany the various IFoA standards and also the FRC Technical Actuarial Standards. Each standard applies
to a different type of work, some have cross practice relevance and others are related to a particular area.
Members have to take particular care when they are working on an assignment which relates to more than one
country, or perhaps is for a different country to the one the Member is based in.
Even if the Member does not hold membership of another actuarial body, there may be local standards to
apply that the market expects or the local law prescribes. Members must take time to therefore investigate
what is applicable.
Where there are competing standards at play, APS X1: Applying Standards to Actuarial Work and the
accompanying guidance offer Members advice on how to determine which standard should take precedence.
1.Which principle from the Actuaries’ Code includes the following amplification: "Members must not
act where there is an unreconciled conflict of interest"?
Select one:
a. Integrity ("Members must act honestly and with integrity")
b. Competence and Care ("Members must carry out work competently and with care")
c. Impartiality ("Members must ensure that their professional judgement is not compromised, and cannot
reasonably be seen to be compromised, by bias, conflict of interest, or the undue influence of others") Correct
d. Compliance ("Members must comply with all relevant legal, regulatory and professional requirements")
Your answer is correct.
The correct answer is: Impartiality ("Members must ensure that their professional judgement is not
compromised, and cannot reasonably be seen to be compromised, by bias, conflict of interest, or the undue
influence of others")
Question 2
Question text
Which principle from the Actuaries’ Code includes the following amplification: “Where Members identify
that a user of their work has, or is reasonably likely to have, misunderstood or misinterpreted the information
or advice provided by them in a way which could have a material impact, Members should draw the user’s
attention to this”?
Select one:
a. Competence and Care (“Members must carry out work competently and with care”)
b. Impartiality (“Members must ensure that their professional judgement is not compromised, and cannot
reasonably be seen to be compromised, by bias, conflict of interest, or the undue influence of others”)
c. Speaking Up (“Members should speak up if they believe, or have reasonable cause to believe, that a course
of action is unethical or is unlawful”)
d. Communication ("Members must communicate appropriately") Correct
Your answer is correct.
The correct answer is: Communication ("Members must communicate appropriately")
Question 3
Which of these is NOT one of the six principles in the Actuaries’ Code?
Select one:
a. Members must communicate appropriately
b. Members must take responsibility for their work and for its effect on clients and the public Correct
c. Members must comply with all relevant legal, regulatory and professional requirements
d. Members must carry out work competently and with care

The correct answer is: Members must take responsibility for their work and for its effect on clients and the
public
Question 4
What kind of code is the Actuaries’ Code?
Select one:
a. A principles-based code Correct
b. A rules-based code
c. A legal code
d. A guidance-based code

The correct answer is: A principles-based code

Question 5
How many pages does the Actuaries’ Code have?
Select one:
a. One page
b. Three pages Correct
c. Five pages
d. Seven pages

The correct answer is: Three pages

Question 6
Which principle in the Actuaries’ Code contains the following amplification: “In addition to complying with
any legal requirements to report matters to relevant regulators or other authorities, Members should also report
to those bodies any behaviour that they have reasonable cause to believe is unethical or unlawful, and carries
significant risk of materially affecting outcomes”?
Select one:
a. Communication (“Members must communicate appropriately”)
b. Integrity (“Members must act honestly and with integrity”)
c. Speaking Up (“Members should speak up if they believe, or have reasonable cause to believe, that a course
of action is unethical or is unlawful”) Correct
d. Compliance (“Members must comply with all relevant legal, regulatory and professional requirements”)
The correct answer is: Speaking Up (“Members should speak up if they believe, or have reasonable cause to
believe, that a course of action is unethical or is unlawful”)
Question 7
Which principle from the Actuaries’ Code includes the following amplification: "Members must take
reasonable steps to ensure users are aware of any substantial issues with a piece of work for which they are
responsible or in which they have had significant involvement, if those issues might reasonably influence the
decision-making or judgement of users"?
Select one:
a. Competence and Care ("Members must carry out work competently and with care")
b. Impartiality ("Members must ensure that their professional judgement is not compromised, and cannot
reasonably be seen to be compromised, by bias, conflict of interest, or the undue influence of others")
c. Speaking Up ("Members should speak up if they believe, or have reasonable cause to believe, that a course
of action is unethical or is unlawful") Correct
d. Communication ("Members must communicate appropriately")

Your answer is correct.

The correct answer is: Speaking Up ("Members should speak up if they believe, or have reasonable cause to
believe, that a course of action is unethical or is unlawful")
Question 8
Which of the following is an accurate quotation from the Actuaries’ Code?
Select one:
a. “Members must comply with all relevant legal and regulatory requirements except where by doing so there
would be conflict with the Actuaries’ Code”
b. “Members must take all reasonable steps to ensure they comply with all relevant legal, regulatory and
professional requirements”
c. “Members must take reasonable steps to ensure they are not placed in a position where they are unable to
comply” Correct
d. “Members should comply with all relevant legal, regulatory and professional requirements”

The correct answer is: “Members must take reasonable steps to ensure they are not placed in a position where
they are unable to comply”
Question 9
When does the Actuaries’ Code apply?
Select one:
a. The Actuaries’ Code applies to all actions taken by an actuary, whether in or out of work
b. The Actuaries’ Code applies at all times to a member’s conduct in an actuarial role, and will be taken into
account whenever a member’s conduct might reasonably be considered to reflect upon the profession Correct
c. The Actuaries’ Code applies at all times to a member’s conduct in an actuarial role, and when a member is
acting in an official capacity as a member of the profession
d. The Actuaries’ Code applies only to a member’s conduct in an actuarial role

The correct answer is: The Actuaries’ Code applies at all times to a member’s conduct in an actuarial role,
and will be taken into account whenever a member’s conduct might reasonably be considered to reflect upon
the profession
Question 10
What is the most effective way of developing a better understanding of the principles and amplifications in
the Actuaries’ Code?
Select one:
a. Practising applying them in a variety of situations Correct
b. Talking to senior actuaries to learn from their interpretation
c. Discussing with your peers to come to a shared understanding
d. Using a dictionary to look up any words you don’t understand

Is IFoA guidance mandatory?

Select one:
a. Yes Incorrect
b. No, all guidance is non-mandatory

The correct answer is: No, all guidance is non-mandatory

Question 2
What is the name of the ethical code of conduct for the IFoA?
Select one:
a. The Code of Actuaries
b. Actuarial Code of Conduct
c. The Actuaries’ Code Correct
d. IFoA Code

The correct answer is: The Actuaries’ Code

Question 3
Who conducts regulatory oversight of the IFoA in the UK?
Select one:
a. Financial Conduct Authority
b. The Prudential Regulation Authority
c. The International Actuarial Association Incorrect
d. The Financial Reporting Council

The correct answer is: The Financial Reporting Council

Question 4
The IFoA regulates its Members in such a way as to…
Select one:
a. ensure its Members can secure employment
b. assure public trust and support business and innovation Correct
c. ensure its Members can earn high salaries
d. support employers first and foremost
The correct answer is: assure public trust and support business and innovation
Question 5
Who investigates a concern?
Select one:
a. An Investigation Actuary and the person who referred the concern
b. A Case Manager and an Investigation Actuary CorrectThe person who referred the concern is not part of
the investigation team although they may be asked to provide further information
c. A Case Manager and the person who referred the concern
The correct answer is: A Case Manager and an Investigation Actuary
Question 6
What are the standards of the Financial Reporting Council (FRC) called?
Select one:
a. Technical Actuarial Standards Correct
b. Technical Actuary Standards
c. Technically Actuary Standards
d. Total Actuarial Standards

The correct answer is: Technical Actuarial Standards

Question 7
What aspects of the IFoA does the Financial Reporting Council (FRC) NOT oversee?
Select one:
a. Professional and ethical standards
b. Volunteering programme Correct
c. Education arrangements
d. Disciplinary and Capacity for Membership Schemes

The correct answer is: Volunteering programme

Question 8
Who is responsible for setting Actuarial Profession Standards (APSs)?
Select one:
a. The Joint Forum on Actuarial Regulation (JFAR)
b. The Financial Reporting Council (FRC) Incorrect
c. The Prudential Regulatory Authority (PRA)
d. The IFoA
Feedback
The correct answer is: The IFoA
Question 9
Where can you find out about your current CPD requirements set out in the Continuing Professional
Development (CPD) Scheme?
Select one:
a. The actuary handbook
b. My employer
c. The IFoA’s website Correct
d. The Actuaries’ Code
The correct answer is: The IFoA’s website
Question 10
Which of the following statements is true “The IFoA’s purpose is to advance all matters relevant to actuarial
science and its application and to regulate and promote the actuarial profession…
Select one:
a. in the interest of its Members
b. in the interest of Actuarial Consultancies
c. in the public interest Correct
d. in the interest of Regulators

Which of the following is TRUE?

Select one:
a. Ethical awareness is an ability to identify ethical issues
b. Ethical awareness is the capacity to understand that ethics is important
c. Ethical awareness is the capacity to understand the importance of ethics to professional life Incorrect
d. Ethical awareness is an awareness of the current ethical issues affecting the profession

The correct answer is: Ethical awareness is an ability to identify ethical issues
Question 2
What does it mean to 'act ethically'?
Select one:
a. Acting ethically means doing the right thing Correct
b. Acting ethically means following the law
c. Acting ethically means taking good advice
d. All of the statements apply

Your answer is correct.

The correct answer is: Acting ethically means doing the right thing
Question 3
What is the main reason that a professional has a duty to act in the public interest?
Select one:
a. Because it is stated in their Code of Ethics
b. Because the public may argue for more government regulation if they feel the profession is acting against
the public interest
c. Because historically professions were instituted to serve the public
d. Because the public has placed their trust in the profession Correct

The correct answer is: Because the public has placed their trust in the profession
Question 4
Which of the following is NOT a defining characteristic of a professional?
Select one:
a. Has specialised skills and knowledge
b. Has a fiduciary obligation to clients and/or the public
c. Earns a good salary Correct
d. Has a Code of Ethics they must follow

Your answer is correct.

The correct answer is: Earns a good salary
Question 5
Which of the following statements is TRUE?
Select one:
a. 'Actuary' is not a protected term in the UK - therefore, it cannot be a profession there
b. There is reserved work for IFoA members in the UK - therefore, it must be a profession there
c. Although protected terms and reserved work are both often associated with professions, they are not
necessary characteristics of a profession Correct
d. Actuarial work is professional only in jurisdictions where 'actuary' is a protected term or there is reserved
work

The correct answer is: Although protected terms and reserved work are both often associated with professions,
they are not necessary characteristics of a profession
Question 6
A professional body is useful to society because it...
Select one:
a. ensures its members meet a certain level of competence and ethical behaviour Correct
b. caps the number working in the profession and so keeps demand for the professionals high
c. can act as a trade body for its members, representing their interests at the highest levels
d. all of the statements apply

The correct answer is: ensures its members meet a certain level of competence and ethical behaviour
Question 7
One way of acting ethically involves...
Select one:
a. adopting the behaviour of experienced senior actuaries
b. following the instructions/advice of your manager
c. adopting an actuarial ethical role model and behaving as that person would Correct
d. following the instructions/advice of successful colleagues

The correct answer is: adopting an actuarial ethical role model and behaving as that person would
Question 8
Which of the following is NOT TRUE? A profession that is self-regulating...
Select one:
a. can set standards and punish breaches of those standards
b. can decide whom to admit into the professional body and whom to expel Incorrect
c. can report members to the police
d. can terminate a member’s employment
Feedback
The correct answer is: can terminate a member’s employment
Question 9
A person who has highly specialised skills and knowledge...
Select one:
a. is a professional
b. might be a professional
c. should be professional Incorrect
d. is professional

The correct answer is: might be a professional

Question 10
Acting ethically is not always easy. Which of the following are threats to acting ethically?
Select one:
a. Self-interest
b. Pressure from managers or clients
c. A lack of ethical awareness
d. All of the statements apply

What form of review can be considered under APS X2?

Select all that apply:
a. ‘Independent peer review’
b. ‘Work review’ Correct
c. ‘Special review’

Your answer is partially correct.

You have correctly selected 1.
The correct answers are: ‘Independent peer review’, ‘Work review’
Question 2
Correct
When should members expect a ‘Risk Alert’?
Select one:
a. When a new standard comes into force
b. When there is a new qualification available
c. When awareness needs to be raised of an important issue Correct
d. When an update is made to the IFoA website

The correct answer is: When awareness needs to be raised of an important issue
Question 3
What does APS X2 require members to do?
Select one:
a. To arrange for a review of all their actuarial work
b. To consider when it is appropriate and proportionate to apply a review to their actuarial work Correct
c. To organise reviews of other people’s work
d. To consider when it is appropriate and proportionate to apply a review to their team’s work

The correct answer is: To consider when it is appropriate and proportionate to apply a review to their actuarial
work
Question 4
Who benefits from your good record-keeping?
Select all that apply:
a. Your client Correct
b. Your employer
c. A regulator
d. Your colleagues

Your answer is partially correct.

You have correctly selected 1.
The correct answers are: Your client, Your employer, A regulator, Your colleagues
Question 5
Partially correct
Mark 0.33 out of 1.00
Question text
How else might you hear about changes in standards?
Select all that apply:
a. Internal training sessions
b. New policies from your employer
c. Events by local societies Correct
d. Contact from the Financial Reporting Council
Your answer is partially correct.
You have correctly selected 1.
The correct answers are: Internal training sessions, New policies from your employer, Events by local societies
Question 6
Correct
Which IFoA standard assists members in determining which standards to apply?
Select one:
a. APS P1
b. APS X2
c. APS X1 Correct
d. APS L1

The correct answer is: APS X1

Question 7
Correct
What is NOT the purpose of peer review and checking work?
Select one:
a. To check the calculations
b. To check the correct standards have been applied
c. To ensure the work meets the instructions
d. To increase costs Correct

Your answer is correct.

The correct answer is: To increase costs
Question 8
Why might a review NOT be carried out?
Select one:
a. Because the client is not happy with the costs involved
b. Because you are the only actuary in your team
c. Because you consider the review to be disproportionate to the work
d. Because you have been told this is not actuarial work Incorrect
Your answer is incorrect.
The correct answer is: Because you consider the review to be disproportionate to the work
Question 9
The IFoA publishes guidance to support members in the application of the standards of the IFoA and which
other organisation?
Select one:
a. Financial Reporting Council Correct
b. Financial Conduct Authority
c. International Actuarial Association

The correct answer is: Financial Reporting Council

Question 10
Why should you document the application of professional standards?
Select all that apply:
a. Because you have to exercise professional judgement in determining whether to apply standards
b. So colleagues are aware of which standards are relevant
c. As the user of your work should be aware as to which standards have been adhered to
d. You may not be able to recall how you reached a decision on the application Correct

Your answer is partially correct.

You have correctly selected 1.
The correct answers are: Because you have to exercise professional judgement in determining whether to
apply standards, So colleagues are aware of which standards are relevant,
As the user of your work should be aware as to which standards have been adhered to, You may not be able
to recall how you reached a decision on the application