system to promote the quality of actuarial work ACA Sessional - - PowerPoint PPT Presentation

Proposals for an enhanced system to promote the quality of actuarial work

ACA Sessional Meeting

London, 13 September 2018

Panel

Emma Gilpin, Head of Regulatory Policy, IFoA Andrew Chamberlain FIA, AMS Project Board Des Hudson, IFoA Regulation Board Chair

Emma Gilpin

Head of Regulatory Policy

Introduction

• Royal Charter
• Regulate the actuarial profession in the public interest
• Uphold and demonstrate high standards of technical

competence and ethical behaviour

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Rationale

• Currently IFoA does not monitor the quality of Members’

work.

• Gap in the information available to the IFoA to inform its

regulatory role

• Proposals are not in response to any identified issues with

quality of actuarial work

• Growing public scrutiny
• Risk for profession

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Summary of Proposals

• Introduce an enhanced system to gather information about

the work being carried out by IFoA Members

• Provide evidence of the quality of actuarial work
• Promote best practice
• Develop and adapt training, education, standards and

guidance

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Proposed Approach

• Risk based

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Category Type of Review Scope of Review

A Direct review of actuarial work on a regular basis Work of IFoA Practising Certificate (PC) holders relating to that PC role.

• Recognition of roles identified by legislation or regulation

as having some particular importance

• Significance in terms of the public interest

Proposed Approach

• Risk based

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Category Type of Review Scope of Review

A Direct review of actuarial work on a regular basis Work of IFoA Practising Certificate (PC) holders relating to that PC role.

• Take into account extent of other activities that already

apply to the PC holder’s work

• Quality Assurance Scheme (QAS) accredited
• Internal audit
• Other forms of regulatory monitoring

Proposed Approach

• Risk based

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Category Type of Review Scope of Review

B Thematic reviews of actuarial work Any actuarial work potentially covered. Includes work outside the scope of the IFoA’s PC Scheme.

• Evidence-based studies focused on particular theme, issue, or question
• Within and outside scope of PC Scheme
• Areas of work with some significance in terms of the public interest
• Carried out by agreement (IFoA Members and employers)
• Anonymous where possible (actuary’s name not disclosed to the reviewer)

Proposed Approach

• Risk based

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Category Type of Review Scope of Review

C Enhanced general information gathering activities Any actuarial work potentially covered.

• E.g. questionnaires, surveys, analysis of insights shared by co-

regulators

• Scheduled and ad hoc
• Thematic

Proportionate Approach

• Profession-led regulation - robust but appropriately targeted

and proportionate

• Scope of proposals is broad but additional requirements are

narrowly focussed (reserved work)

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Impact

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• Time
• Minimised by risk-based approach to frequency and duration of visits
• Cost
• Funded in part from existing revenue streams
• FRC contribution

Benefits

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• Improve effectiveness of actuarial regulation
• Enhance the relevance of standards, guidance, and educational

material

• Reinforce public reputation
• Enhance the credibility of the PC Scheme
• Assurance of the actuarial quality of the work undertaken in relation

to these important public interest roles

Benefits

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• Mechanism for independent feedback to Members
• Designed for the profession by the profession
• Maintain effective and accountable self-regulation (subject to

independent oversight)

• Ongoing reinforcement and continuous improvement

Andrew Chamberlain FIA

Actuarial Monitoring Scheme Project Board

Journey so far

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Feedback /Review

Project Board Practice Boards and Committees Council Focus Group Members Regulators FRC

We have seen at Lloyd’s that review and feedback works:

• Statements of actuarial opinion: fact based feedback and examples of good

practice has led to increased “scores” since introduction especially in “full review” period

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You may have some questions….

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Should I be worried?

• Have you anything to hide?
• Have you the time?
• Does it create confidentiality problems?
• How will I explain this to my firm?
• Do you think it makes sense?

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Is it proportionate?

Category A will directly impact UK PC holders only:

• 7% of UK Members are PC holders
• 70% of IFoA Practising Certificates are Scheme Actuary PCs
• 77% of Scheme Actuary holders currently employed by a QAS accredited organisation
• 30% of IFoA Practising Certificates are insurance PCs
• Many will be subject to PRA, FCA and/or Lloyd’s supervision

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Category A: Direct Review

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• Mandatory for all IFoA Practising Certificate (PC) holders
• Majority of “public interest” covered by PC roles
• Review visit (IFoA Review Team) so “onsite”
• Interview between the Review Team and PC holder

How can professional judgements be evaluated effectively?

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• Interviews, reviews of key pieces of work
• Focussed on requirements of actuarial professional

standards

• Flexibility to allow for critical exercise of professional

judgement

• Not substituting one view for another but assessing whether

the decisions made were reasonable

How often will the reviews be for “Cat A”?

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• Doesn’t have to be every year
• Duration/frequency dependent on
• type of PC holder
• number of PC appointments
• particular work involved
• QAS accreditation
• internal or external audit
• Maybe previous findings
• “Every few years” makes sense

Wider Thematic Reviews also make sense

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• Look at particular topics, roles and/or areas of work
• Not limited to work within scope of PC Scheme or UK work
• Sources for themes
• Risk analysis (Regulation Board / FRC)
• Risk Perspective document (JFAR)
• Insights from regulators
• Other regulatory activities

What would you select as thematic reviews….today?

What are we going to get from this?

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• Report to PC holder
• Summary of findings
• Best practice recommendations
• Report to IFoA Regulation Board
• Emerging themes or issues
• High-level, anonymised reports for generic findings
• Key point is to make sure there is value for the

participants/profession

Opportunity for our Members

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• Project Board and Regulation Board

recognise there may be alternative approaches

• Welcome your ideas and suggestions
• Please do let us know…chance to

make a real difference

• And please be constructive where

possible!!

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• Consultation open for responses until 28 September 2018

Consultation

Responses can be submitted online at:

http://bit.ly/IFoAMonitoringConsultation

Submissions can also be made by email or post:

Actuarial Monitoring Scheme The Institute and Faculty of Actuaries Level 2 Exchange Crescent 7 Conference Square Edinburgh, EH3 8RA AMS@actuaries.org.uk

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Any Questions?