Actuarial professionalism and ethics

A profession is not defined by a body of knowledge alone. It is defined by three additional commitments: that its members put the public interest ahead of their own when the two collide, that they submit to enforceable rules of conduct and that they accept being judged by their peers. Actuarial professionalism is the concrete form those commitments take in a field whose results almost no one can verify on their own: the policyholder does not review the reserve backing their policy, nor does the worker review the valuation of the plan that will pay their pension.

That is why actuarial ethics is less abstract than it seems. It translates into very practical questions: do I have current competence and accreditation for this work? Does anyone gain or lose from my conclusion in a way I have not disclosed? Would a reasonable reader understand the limitations of my report? Could another actuary reproduce my figures with the documentation I leave behind? The rules that follow are, to a large extent, formalized answers to those questions.

In Mexico the framework has three layers that are worth distinguishing. The professional layer, with the Colegio Nacional de Actuarios (CONAC), its code of ethics, its standards and its certification. The regulatory layer, with the CNSF (National Insurance and Surety Commission) and CONSAR (National Retirement Savings Commission), which turn some of those requirements into legal obligations backed by sanctions. And the international layer, with the International Actuarial Association (IAA) and the associations of other countries, which serve as a reference and, for those who are also their members, as a direct obligation.

The instrument in force is the Código de Ética y Conducta del Actuario (Code of Ethics and Conduct for Actuaries, document CONAC-JH-001-01), approved by the CONAC Ordinary General Assembly on June 4, 2025. Its preamble states that everyone practicing the actuarial profession in Mexico must abide by it and expresses actuaries' commitment to the public interest. It is organized into general principles, rules on professional practice and a sanctions regime administered by the Junta de Honor (Honor Board).

Three features set it apart from older codes. First, the obligation to document the final report with its date, requesting party, permitted use, data and their source, elements that materially affect the result, reproducible methods and assumptions, and results (II.6.1 to II.6.5): it is, in miniature, a communication standard. Second, personal responsibility extends to work that is supervised (II.3 and II.14). Third, the safekeeping of working papers in activities subject to audit (II.16) and the prohibition on taking part in false or misleading advertising (II.18). Depending on the severity determined by the Junta de Honor, possible sanctions are private or public reprimand, temporary suspension, permanent expulsion from the Colegio and a complaint to the competent authority (III.2).

The code says how the actuary must behave; standards of practice say how the work must be done. On April 10, 2014 CONAC adopted Estándar de Práctica Actuarial 0, Servicios Actuariales en General (Actuarial Standard of Practice 0, Actuarial Services in General), adapted from the IAA general standard. It is the common floor for any actuarial service unless a specific standard exists. Its sections cover acceptance of the assignment, knowledge of relevant circumstances, reliance on others, materiality, data quality, assumptions and methodology (the actuary's own, prescribed by a third party or mandated by regulation), process management, peer review, subsequent events, retention of documentation and communication. On that basis CONAC has specific standards for the gross premium, the unearned premium reserve and the audit of reserves in insurance and surety, which are described on the actuarial standards page.

Internationally, ISAP 1, General Actuarial Practice, was adopted by the IAA Council in November 2012 and revised on December 1, 2018, when it incorporated model governance (section 2.10). ISAPs are model standards: they do not bind any actuary on their own, but through the associations that adopt or adapt them, as CONAC did with its EPA 0. ISAP 1 and EPA 0 share an idea that is useful for resolving dilemmas: the actuary may depart from the guidance and still comply if the report discloses the nature, rationale and effect of the deviation. What the actuary may not do is depart from it silently.

The LISF (Insurance and Surety Institutions Law) gives standards legal force in regulated work. Technical notes must be prepared in accordance with the actuarial standards of practice specified by the CNSF (article 201 for insurance and 210 for surety), and so must the independent actuary's opinion on reserves (article 311), with details in Chapters 5.17 and 23.3 of the CUSF (Single Insurance and Surety Circular).

Many Mexican actuaries are also members of the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS), and are bound by their codes wherever they work. The Code of Professional Conduct, in force since January 1, 2001, is a common text adopted by several US actuarial organizations, including the SOA and the American Academy of Actuaries (AAA). It has 14 precepts accompanied by interpretive annotations, and it states that when the law conflicts with the code, the law prevails.

For decades the CAS published its Statements of Principles on ratemaking, reserving and valuation in property and casualty insurance. In 2020 its Board decided to rescind those on ratemaking, reserving and valuation; in response to the objections received, in May 2021 it reinstated the ratemaking statement (Statement of Principles Regarding Property and Casualty Insurance Ratemaking) as a reference for regulated ratemaking in the United States. Its first principle, that a rate is an estimate of the expected value of future costs, is a classic reference in the training of P&C actuaries.

In the United Kingdom, the Actuaries' Code of the Institute and Faculty of Actuaries (IFoA) was revised after consultation, and the current version took effect on September 25, 2025. It keeps six principles: integrity, competence and care, impartiality, compliance, speaking up and communication. The speaking up principle is the most distinctive: it asks members to raise concerns when they believe, or have reasonable grounds to believe, that conduct is unethical or illegal. It is an explicit statement of something other codes leave implicit: staying silent is also a professional decision.

In Mexico, the LISF requires technical notes, actuarial reserve methods, reserve valuation and the Dynamic Solvency Test to be prepared and signed by an actuary holding a cédula profesional and either a current certification from the professional college for the specialty or accreditation of knowledge before the CNSF (articles 201 and 210, among others; CUSF, Provision 31.1.1). Accreditation is granted by category (technical notes; reserve methods and valuation; Dynamic Solvency Test) and by basic field (life excluding pensions, pension insurance, accident and health, property and casualty, and surety), through an exam with a minimum passing score of 70% (31.1.2, 31.1.3 and 31.1.9).

The accreditation letter is valid for two years and may be renewed for equal periods (31.1.11). To renew, the actuary must submit, at least ten business days before expiration, evidence of a continuing education program coordinated by the professional college (31.1.12). Anyone who does not obtain renewal on time loses the accreditation and must start a new application (31.1.13). The independent actuary's opinion has its own exam, in two parts (valuation and audit), with the same validity and renewal rules (Chapter 31.2).

Professional certification follows parallel rules. CONAC's Continuing Education Regulation for insurance and surety, approved in 2013, requires at least 80 hours over two years, of which at least 12 must cover Mexican insurance or surety regulation and at least 64 must be courses with an evaluation passed with 70% or more; ethics and professionalism are among the creditable technical topics. For pension plans, CONSAR registers as authorized actuaries those who issue opinions on plans under its Disposiciones de carácter general aplicables a los planes de pensiones (general provisions applicable to pension plans); the requirements updated in April 2026 include an actuarial cédula profesional, at least five years of experience in actuarial consulting with recent experience valuing contingent employee benefit liabilities, and a current certification in the field issued by a college recognized by the SEP (Ministry of Public Education), by a college that is a member of the IAA or by the SOA. Details of the procedures are on the certification page.

Insurance institutions must obtain an opinion from an independent actuary on the condition and adequacy of their technical reserves, appointed directly by the board of directors (LISF, article 311); the engagement must be made no later than June 30 of the fiscal year under review, and the opinion covers the reserves at year-end (CUSF 23.2.1). Chapter 30.2 of the CUSF sets the requirements for registration: a cédula profesional, certification or accreditation to issue opinions, at least five years of technical actuarial experience in the sector, not having been expelled or suspended by their college, a clean credit and tax record, not having been a director or officer of institutions in the past year and having no pending litigation with the institution under review.

Independence must exist when the contract is signed and throughout the work (30.2.4). The Provision lists objective circumstances in which independence is deemed not to exist, applicable to the actuary and, in several cases, to the firm to which the actuary belongs and to its partners and employees. Among them: income from the institution and its group representing 10% or more of total income in the prior year; having been a significant customer, supplier or service provider (20% or more of sales or purchases); having held executive positions in the institution or its group in the past year; kinship up to the second degree with management; investments in the institution's securities; loans or debts exceeding 10% of equity; and, most relevant for actuarial firms, providing the same institution with services such as preparing technical notes, calculating or valuing reserves, calculating the RCS (solvency capital requirement) or operating the systems used to calculate them.

In addition, no one may opine on the same institution for more than five consecutive years, and may only return after a break of at least two years (30.2.3). The codes complement this objective rule with a subjective one: CONAC asks actuaries to refrain from services involving an actual or possible conflict unless the ability to act ethically is preserved and the conflict is disclosed (II.13); the SOA additionally requires the express consent of the affected principals (precept 7); the IFoA prohibits acting with an unreconciled conflict (principle 3.2).

The LISF establishes three avenues of consequences for the actuary. Administrative: article 485 imposes fines of 200 to 2,000 days' wages on independent actuaries, actuaries who sign technical notes and actuaries who sign the Dynamic Solvency Test when their opinions are inaccurate through negligence or willful misconduct (section I, item f), and fines of 1,000 to 5,000 days' wages on auditors and independent actuaries who conceal, omit, disguise or falsify material data in their opinions (section II, item k). The law expresses these fines in days of minimum wage; since the 2016 constitutional reform on de-indexation, those references are understood to refer to the UMA (Unit of Measurement and Update). The independent actuary's registration may also be suspended or cancelled (article 313).

Civil: the independent actuary is liable for damages caused to the institution when, through inexcusable negligence, the opinion contains defects or omissions, or when the actuary intentionally omits relevant information, includes false information, adjusts the result to give the appearance of a different situation or proposes entries contrary to the standards (article 318). The law also gives the actuary a safe harbor: there is no liability if the actuary acts in good faith on the information provided by the institution and in accordance with the applicable methodologies (article 319). That is why documenting the information received and the methods used is not bureaucracy, it is a defense; it must be kept for at least five years (article 317). Professional discipline is handled by CONAC's Junta de Honor, under its code and internal rules.

As an international reference, the Actuarial Board for Counseling and Discipline (ABCD) in the United States has investigated complaints against members of the organizations that share the Code of Professional Conduct since 1992. In 2025 it handled 138 matters: 114 confidential requests for guidance and 24 investigation cases; of the nine closed that year, one was dismissed, five were dismissed with guidance, one ended in counseling and two in a recommendation for discipline. The ABCD does not impose sanctions: it recommends them to the actuary's organization. Among the alleged conduct it publishes without names are providing services without meeting continuing education requirements, failing to disclose a conflict of interest and omitting key assumptions from a report in violation of ASOP 41.

Almost all actuarial work today runs through a model, and increasingly through artificial intelligence tools. The applicable rules are not new, but they read with fresh urgency. ISAP 1 asks actuaries who use models to make sure their risks have been identified and assessed and that controls proportionate to their use are in place (section 2.10). In the United States, ASOP 56, Modeling, applies to work performed on or after October 1, 2020 and guides the actuary when designing, developing, selecting, modifying, using, reviewing or evaluating models, including those developed by others.

On generative AI, the AAA Committee on Professional Responsibility published a nonbinding discussion paper in 2024 whose central conclusion is direct: generative AI is a model and therefore ASOP 56 applies to it. It recommends validating its output before using it, not relying on it to cover a lack of competence and disclosing the extent to which it was used. In July 2025 the IFoA updated (version 2.1) its nonmandatory Ethical and professional guidance on Data Science and Artificial Intelligence, which walks through the six principles of the code with case studies. And in 2024 the IAA formed an AI task force that in 2026 presented three foundational papers on governance, testing and documentation of the responsible use of AI. For the Mexican actuary, add to this the professional confidentiality required by the CONAC code (II.8) and personal data protection legislation, which make uploading policyholder information to external tools especially sensitive.

Communication closes the loop. ASOP 41, applicable to communications issued on or after May 1, 2011, requires identifying the responsible actuary and disclosing assumptions and methods, data sources, deviations from standards and limitations on use. The CONAC code reaches the same place through the reproducible report (II.6) and ISAP 1 through its section 3. A good practical test: if another actuary received the report and the working papers tomorrow, could they arrive at the same figures and understand why the assumptions were chosen?

The six cases are hypothetical, built from situations that are common in the Mexican market. Each one is analyzed with the principles at stake and the regulatory reference. They are the same cases as in the evaluator, so it is best to answer it before reading on.