The actuary’s dilemma plays out in India

Scrapped insurance products bring actuaries in spotlight.

The article is deep inside baseball concerning the insurance market in India. I can’t comment on those particulars, but the dilemma the article spells out should be familiar to most actuaries:

According to [Institute of Actuaries of India (IAI) president Liyaquat Khan], an appointed actuary is first an employee of a company and not just a representative who acts on behalf of the regulator. But the [Indian regulator] has not given him the power to refuse his CEO when asked to price a product and file it for … approval.

‘In a product, he settles the assumptions and goes ahead with its pricing,’ Khan [said].

‘The appointed actuary ensures that the policyholders and shareholders get equitable returns,’ K.K. Wadhawa, member of governing council of Institute of Actuaries of India (IAI), said.

 

Note that the opposing opinions come from the same actuarial organization.

In the U.S., actuaries pledge that rates not be excessive, inadequate or unfairly discriminatory. How that plays out can be difficult, here as elsewhere.

 

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