The examiners report seems to indicate in this case that:
- If the work is material -> If the actuary agrees with the work -> provide disclosure.
This seems to be contrary to what is listed in the wiki regarding what to disclose when the work is material?
Comments
There seems to be a contradiction between the examiner's report and the source text for ASOP.41 because Section 3.4.4 (b) in ASOP.41 states:
If a material assumption or method is selected by another party, the
actuary has three choices:
Choice 1: If the assumption or method does not conflict significantly with what, in the actuary’s professional judgment, would be reasonable for the purpose of the assignment, the actuary has no disclosure obligation
(Choice 2 is when the actuary does not agree with the work and Choice 3 is when the actuary can't judge, and both these cases do require disclosure)
But according to the examiner's report for this question, one of the common mistakes was stating that no disclosure is required because the actuary concluded the results were reasonable. I'm not sure what to suggest here. Unless I'm misreading the source text, it seems the examiner's report should have accepted the "no disclosure" answer.
Maybe it's in the wording of the problem (i.e., maybe this would be a bad example problem for this reading)? The question specifically references what disclosures may be required when making use of an analysis conducted by a non-actuary. In this case it seems we'd need to refer to COPLFR 4.10 Use of the work of another, where it states "If the Appointed Actuary has made use of the analysis of another actuary not within the Appointed Actuary’s control ..."
This in contrast to the section you pointed out in ASOP.41 Section 3.4.4 which relates not to analysis but instead to assumptions and methods, as stated:
3.4.4 RESPONSIBILITY FOR ASSUMPTIONS AND METHODS
An actuarial communication should identify the party responsible for each material assumption and method.
Then for these assumptions and methods, the decision process you outlined in the wiki for ASOP.41 would apply.
The explanation is as follows:
You had mentioned above that COPLFR refers to "analysis" whereas ASOP 41 refers to "assumptions and methods" but I don't think there's any difference in meaning between these terms. An actuarial analysis consists of assumptions and methods.
Anyway, it would be better if this contradiction between ASOP 41 and COPLFR didn't exist, but for the exam, you should use COPLFR for any question related to the SAO.
could this be an instance where another ASOP superseded ASOP 41?
No, I think Graham's earlier explanation is appropriate in this case.