THE SOCIETY OF ACTUARIES IN IRELAND

Transcription

1 THE SOCIETY OF ACTUARIES IN IRELAND Organisational Report Presidents' Forum Edinburgh November 2006 Standard-setting Currently, the Society is solely responsible for setting actuarial standards in Ireland (with the exception that changes to certain of our pension scheme guidance notes require the consent of the Minister for Social and Family Affairs). Following a strategic review last year, the Society s Council concluded that actuarial standards should be set independently of the profession or subject to external oversight with a view to ensuring that those standards satisfy the requirements of the regulators, of other users of actuarial services and of the wider public. Earlier this year, the Society initiated discussions with the regulators (the Financial Regulator and the Pensions Board) and the relevant government departments (Finance and Social & Family Affairs) as to how this could be achieved. Following a series of one-to-one meetings with the four bodies, the Society hosted a roundtable meeting in late October to discuss the options for actuarial standard-setting. At that meeting, the Department of Finance agreed to establish a steering committee to further analyse the issues and options and, in particular, to determine whether there is a sufficiently strong case for a statutory solution. Membership of the UK actuarial profession Until recently, members of the Society of Actuaries in Ireland have been required to maintain corresponding membership of the Institute or Faculty of Actuaries in the UK (except for those who obtain membership under our mutual recognition agreements with the Australian, Canadian, US and European professional bodies). Following a review of this position, and discussions with the UK Profession earlier this year, Council concluded that there was no need to continue to require Fellow and Associate members to maintain their UK membership. This decision, essentially, reflected the fact the period since its beginnings as a local discussion forum for actuaries resident in Ireland, the Society has become fully responsible for the professional conduct of Irish actuaries. The change took effect from August 2006.

2 Page 2 The requirements for Fellow membership of the Society will continue to be based on the UK education and examination system, as the Society does not intend to establish its own examination structure. CPD scheme The Society has introduced a mandatory CPD scheme for all working actuaries. The new CPD scheme, which is effective from July 2006, is virtually identical to the CPD requirements recently introduced by the UK Actuarial Profession. The requirements for Society members are set out in guidance note GN101(ROI): Continuing Professional Development. As in the UK scheme, there will be a requirement to attend at least once every ten years a professionalism event accredited by the profession. The first such events are scheduled for March and November Practising certificates At an EGM in June 2006, the Society replaced three separate practising certificate schemes - which in order of their introduction, related to certificates for appointed actuaries (life assurance), scheme actuaries (defined benefit pension schemes) and signing actuaries (who provide statutory actuarial opinions relating to non-life insurance technical reserves) with a single designated actuary scheme. This will enable practising certificates to be introduced in relation to any statutory or regulatory requirement for the appointment of an actuary. We are preparing for the introduction next year of two additional types of practising certificate relating to: The role of the PRSA Actuary 1 Statutory certification of life reinsurance business. Disciplinary scheme A new disciplinary scheme was approved by members in June and is effective from September Personal Retirement Savings Accounts (PRSAs) are broadly similar to stakeholder pensions in the UK and first became available during Legislation requires that each PRSA provider should nominate an actuary responsible for certifying the provider s compliance with all aspects of the legislation. 2

3 Page 3 Some of the key changes to the disciplinary scheme are as follows: The operation and management of the disciplinary scheme will be devolved by Council to a Committee on Professional Conduct, which will include actuaries and non-actuaries, with a non-actuary as chairman. There is provision for mediation of disputes that do not involve misconduct. Non-actuaries will be involved at every stage of the disciplinary process (investigating committee, disciplinary tribunal, appeal tribunal), and some of the lay members of disciplinary and appeal tribunals can be drawn from a wider background than the accountancy and legal professions. Disciplinary and appeal tribunals will normally meet in public, whereas under the current scheme they would normally meet in private. A broader range of sanctions is available, including a reprimand, a fine, a period of education or supervised practice, and withdrawal or suspension of a practising certificate. If, in a serious case of misconduct, a member is suspended or expelled from membership, the period of suspension or expulsion will in future be limited to a maximum of five years. Whereas at present, an investigating committee must refer the matter to a disciplinary tribunal if it finds that a member s conduct has been unprofessional, in future, an investigating committee may recommend that the member accept that there has been misconduct and further recommend that the member agree to a sanction specified by the committee (which may be a reprimand, a fine or a period of supervised education/practice), in which case the matter can be concluded without a tribunal hearing. There is provision for general inquiries to be made in relation to the application of the Society s Professional Conduct Standards or guidance notes, or accepted actuarial practice, without referring to the identity of any particular actuary. Such inquiries will be referred by the Committee on Professional Conduct to the relevant practice committee, the Professional Affairs Committee or an Investigating Committee, as appropriate. Compliance monitoring for scheme actuaries A statutory compliance monitoring scheme is to be introduced for pension scheme actuaries with effect from April The Society is currently consulting with its members in relation to the draft professional guidance to support regulations that are expected shortly to give effect to an enabling legislative provision enacted during March When scheme actuaries apply to renew their practising certificates in October 2008, they will have to provide a compliance certificate from another actuary, who is not a partner or colleague, certifying that a sample of the scheme actuary s work has been reviewed and has been found to comply with legislation and professional guidance. 3

4 Page 4 Statements of actuarial opinion for reinsurance business The Financial Regulator has indicated its intention to introduce a requirement for statements of actuarial opinion for reinsurance business. This requirement will apply to non-life reinsurance business from the 2006 year end, and to life reinsurance business from next year. The Society is in the course of consulting with members in relation to draft professional guidance to support the regulatory guidelines. Professional conduct standards and guidance The Society s Professional Conduct Standards have been updated with effect from September During 2006, the following new guidance notes have been issued: GN12(ROI): GN13(ROI): GN101(ROI): General Insurance Business: Actuarial Reports Actuarial Statements required in connection with the US Statements of Accounting Standards No. 87, No. 88 and No. 132 (FAS 87, 88 and 132) Continuing Professional Development During 2006, revised versions of the following guidance notes were issued: GN2(ROI): GN11(ROI): GN20(ROI): GN22(ROI): Financial Condition Reports Retirement Benefit Schemes Transfer Values Statement of Actuarial Opinion on Non-Life Technical Reserves Life Assurance Product Information GN22A(ROI): Life Assurance Remuneration Information GN31B(ROI): Personal Retirement Savings Accounts Remuneration Information Renaming and renumbering of guidance notes The Society s Council has recently decided that our guidance notes should be renamed actuarial standards of practice (ASPs). This is with a view to consistency with the terminology used by other professions and by the actuarial profession in other parts of the world, and also because the use of the term guidance is potentially misleading, in particular in the context of guidance notes that are classified as Practice Standard and with which compliance is mandatory. It has also been agreed that actuarial standards of practice (ASPs) will be numbered separately within each practice area. All current guidance notes will be converted to the new format as soon as possible. In the meantime, new guidance and amendments to existing guidance will follow the new format. 4

5 Page 5 Life assurance guidance The Society s suite of life assurance guidance notes is currently being reviewed. Two draft actuarial standards of practice have been issued for consultation with members: Actuarial Standard of Practice LA-1: Appointed actuaries and life assurance business (which will replace GN1(ROI): Actuaries and long-term insurance business); and Actuarial Standard of Practice LA-3: Additional guidance for Appointed Actuaries on valuation of life assurance business (which will replace GN8(ROI): Additional guidance for Appointed Actuaries). These revised standards have been constructed to reflect the following: The report of the Society s Valuation Regulations Working Party, and Explicit recognition the decision-making role of the Board of Directors in relation to policyholders reasonable expectations and of the advisory role of the Appointed Actuary in that area. A further related draft actuarial standard of practice will be issued for consultation shortly - ASP LA-4: Additional guidance for Appointed Actuaries on policyholders reasonable expectations. In addition, an actuarial standard of practice ASP LA-5 is being prepared on The prudential supervision outside the Republic of Ireland of life assurance business. Council has recently agreed a set of guidelines for the production and adoption of actuarial standards of practice. Annual Convention The Society held its first annual Actuarial Convention on the morning of Thursday 18 May. This comprised concurrent Life, Pensions and General Insurance practice fora followed by a plenary session covering a range of professional issues. 5