BASE Life Co has just discovered a material error in the unit pricing for one of its unit funds, which means that some of its policyholders in that fund have fewer units allocated to their policy than they should have. BASE Life Co must inform the Central Bank of the error if it has not been resolved within which MAXIMUM period from the time the error was first discovered?

• A. 14 working days
• B. 28 working days
• C. One calendar month
• D. 40 business days

Answer: (D)

The main idea is the regulatory deadline for notifying the Central Bank when a material pricing error remains unresolved. Regulators typically specify a maximum period measured in business days—the days the bank and related firms are actively operating—so the clock reflects actual working time, not just calendar dates.

In this scenario, the maximum period is 40 business days. This window gives BASE Life Co enough time to thoroughly investigate the pricing error, determine its impact (how many policyholders are affected and by how much), implement necessary remediation to correct unit allocations, and communicate with stakeholders if required. If the issue isn’t resolved within that span, the obligation to inform the Central Bank kicks in, ensuring regulatory oversight and timely risk management.

Shorter options like 14 or 28 working days would often be insufficient for a material error of this nature, which may require detailed reconciliation and corrective actions. A calendar month can be ambiguous due to varying numbers of business days in different months, whereas 40 business days provides a clear, consistent standard.