Actuarial Code of Professional Conduct

In this post I provide a brief summary of the actuarial code of professional conduct as stipulated by the Australian Actuaries Institute. (Nov 2009) The code was first issued in 1976 and has had a number of revisions since.

The code covers all aspects of the conduct of members in their duties and sets out the minimum standards of professional conduct.

The code applies to all members – where members are working abroad they must comply with the local association’s code, though they must be a member of the IAA. If they are not then they must comply with this or an amended version of the code that has been prescribed or approved by Council. Non compliance with the code may lead to penalties. In areas where statutory requirements conflict with this code then the statutory requirements take precedence.

Public Interest

Members bound by the code have the responsibility to serve the public interest. To do this a member must comply with the law, the constitution, the code  and any relevant professional standards when conducting their role. If these are complied with then they would have met the expectations of the public interest. The institute is reliant on the conscience of members to ensure this is upheld. If a case arises where a member finds another member in breach of the code – then the member is required to the discuss the matter with the other member to resolve it. If it can’t be resolved or the member believes the discussion would be ineffective then they must seek guidance. Following these steps if there is no resolution the member must make a complaint.

Professional Conduct

The code requires members to act with:

  • Integrity
  • Honesty
  • Due care
  • and uphold the reputation of the Institute

Members are required to ensure any information provided in the form of advice, report, communication is not knowingly false, misleading or deceptive. However there is leeway given in the form of differences of opinion between members. Members are allowed to hold their own views as long as it is done in a measured and reasonable manner and avoids maligning the reputation of another member. Members should seek appropriate guidance (legal or professional) if unsure.

Professional Experience

Members must continue to develop their professional skills and maintain their knowledge and skill based on generally acceptable levels. Members are required to be competent in the relevant area prior to providing professional services.


Advice given must be impartial. Members must not act or give advice if there are constraints placed on their professional judgement if they affect impartiality.

Conflicts of Interest

Conflicts with a principal arise due to:

  • member’s own interests
  • interest of member’s firm
  • duty to another principal

Conflicts tend to arise as a result of remuneration contingent to advice given. Members are required to manage such conflicts to avoid breaching the code. This can be done through disclosing the conflict or declining to act. The member should disqualify them self from providing professional services if the conflict can not be managed. Steps taken to manage the conflict should be appropriately documented. Full disclosure must be made to the principal being provided the professional service.


Members must maintain the confidentiality of the Principal that has sought professional services. Any breach must be reported to the Principal. The law however may require the member to breach the Principal’s confidentiality.

Misuse of Professional Services

Members must not provide professional services if they believe that these will be misused in order to break the law or to mislead third parties. If a member believes that this has happened the Principal receiving the service must be alerted. This must be clarified in writing. The member should work with the principal to rectify this.

If this can not be done in a reasonable time and the impact could be materially damaging to third parties then appropriate legal or professional advice should be sought and appropriate actions taken. The obligation to third parties is greater than confidentiality.

Members should reconsider their relationship with principal’s whose action are not legal or honest.

Co-operation with others

Members are required to co-operate with third parties providing services to the Principal. In dealing with other members of the institute members are required to ensure adequate handover. Advice that differs materially to the prior appointee must be explained thoroughly.

Members replacing other members should consult with the prior member to ensure there are no professional reasons to decline taking on the new role.


Professional Indemnity Insurance must be held in scenarios where professional services are being provided to retail customers or in situations where the law does not specifically impose it.

Often the member’s firm would cover this.


Professional qualifications must be disclosed on any written advice and/or entering into employment. The term ‘Actuary’ should only be used if the member is a Fellow or accredited by the institute. Members are allowed to publicise their services so long as it is not false, misleading, deceptive or contrary to the law.


Reporting should be appropriate in regards to:

  • the audience
  • fitness of purpose
  • likely significance
  • capacity of the member
  • any inherent uncertainty and risks in relation to the subject

It should comply with any relevant Professional Standard.

Prescribed Actuarial Advice

Only eligible actuaries are allowed to provide prescribe advice. All prescribed advice must be seen to be provided by the eligible actuary except for in the case of the advice of an expert in the field. The eligible actuary is required to disclose the advice received from the expert if responsibility is not assumed. Where the responsibility of the use of the advice from the expert is assumed by the member then the expert need not be disclosed.

If prescribed advice is to be transmitted to third parties then the actuary must disclose whether this should be in entirety or in part and any material implications communicated. Even if the advice is not to be provided to third parties the member is required to disclose in what capacity it can be used.

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