Published by Vivienne Maclure on
In addition to these, the Institute and Faculty of Actuaries (IFoA) is consulting on a regulatory framework to support the roles that UK actuaries hold under Solvency II.
The IFoA is responsible for setting an ethical framework for its members, wherever in the world they are working, and ensuring a robust disciplinary scheme is in place. On this basis, it is felt that a suitable regime needs to be established, particularly given the significant public interest associated with these roles.
The intention is that it that the chosen regime will provide interested stakeholders with evidence that IFoA members undertaking controlled roles are sufficiently equipped to do so. This may of particular help to smaller insurers who will need to assess the suitability of candidates in fulfilling the requirements associated with the Solvency II roles.
It is thought that the existing practising certificate regime used in life assurance could form the basis of the new regulatory framework and be extended to also cover general insurance. This regime would require holders of the controlled roles to possess a relevant practising certificate.
The IFoA presents three options that could be used to demonstrate that an individual is eligible for a practising certificate:
Respondents’ views are sought on the options, including the criteria to be met under each, and whether:
Whilst a practising certificate regime should be beneficial in providing ready demonstration of a high level of competence to insurance company boards and the PRA, there is a key risk acknowledged by the IFoA. This is the risk that a higher standard is required of IFoA members compared to members of other professional bodies.
This is perhaps more relevant for the risk management and internal audit functions, where there is greater scope for appointing non-actuaries, and the requirement for an actuary to hold a practising certificate could act as a disincentive to appointing one due to additional costs and administration.
Consequently, the IFoA informally proposes a fourth option:
If this is the preferred option, consideration would be given as to whether revisions to existing or new APSs and TASs are necessary.
There will be the opportunity to discuss the proposals at meetings in London and Edinburgh prior to the closing date for responses on 13 June 2014.
We believe that some key questions are raised by the proposals for an IFoA regulatory framework in respect of Solvency II controlled roles, these include:
The consultation paper can be viewed on the IFoA website.