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Aims and objectives

Aims

The users for whom actuarial information is created can place a high degree of reliance on its relevance, transparency of assumptions, completeness and comprehensibility, including the communication of any uncertainty inherent in the information.

Actuarial information addresses the needs of its users, is of high quality and supports good governance if it is:
  • relevant, transparent and complete; and
  • communicated comprehensibly.
Relevant actuarial information makes effective use of models, is based on well-understood data, well-justified assumptions and calculations that are carried out using measures which are fit for purpose and are performed correctly.

Transparency of assumptions, limitations and biases provide context to users making decisions based on actuarial information.

Complete actuarial information is proportionate to the scope of the work, includes information about risks, uncertainties and underlying cash flows, and helps decision-makers assess the implications of possible actions.

Comprehensible actuarial information is:
  • clear and unambiguous;
  • not obscured by irrelevant material; and
  • expressed in terms that address the needs of its audience.
The FRC's principal means of enabling users to place a high degree of reliance on actuarial information is to develop and promulgate standards with which the information should comply, and to promote the use of the standards by the preparers of actuarial information.

Objectives

Our objectives are to:
  • maintain a scope & authority to explain the authority, scope and application of TASs;
  • maintain a conceptual framework to guide the setting of relevant actuarial standards, including the explicit objectives and characteristics of such standards;
  • maintain a process for the development of standards which ensures that the objectives of the conceptual framework can be applied in practice;
  • use the Actuarial Quality Framework as a guide, maintaining consistency across the work of the FRC and its stakeholders;
  • issue new relevant actuarial standards, or amend existing ones, in response to evolving commercial practices, economic developments and deficiencies identified in current practice with, where appropriate, written case studies or practical guidance in support of those standards;
  • take account where appropriate of the regulatory requirements of legislation, the Financial Services Authority, the Pensions Regulator and any other relevant regulatory body;
  • take regular soundings from users of actuarial services, recognising that these views will be hard to draw out. Users will include trade bodies and user representative groups as well as boards and senior executives of corporations with high actuarial input;
  • maintain a liaison with the Actuarial Profession regarding areas of practice for which new standards may be required or existing standards should be modified or clarified;
  • liaise with the International Actuarial Association, other international bodies, national standard-setters and EU institutions on the development and application of international actuarial standards; and
  • address urgent issues promptly.

Operating guidelines

In carrying out its work, the FRC will:
  • work on the basis that well informed users are powerful regulators;
  • target the use of its powers, taking a proactive, risk-based and proportionate approach, making effective use of impact assessments;
  • emphasise principles and clarity in its standard-setting; be clear on the extent to which it sets prescriptive standards;
  • be consultative  involving preparers, users of corporate and actuarial reports, the wider public and other regulatory organisations in its decision-making and allowing adequate time for consultation, without compromising its independence or confidentiality;
  • take account of any emerging EU and global approaches to actuarial standards;
  • be transparent, accountable and efficient in its work, and ensure that it receives appropriate publicity; and
  • comply with the memorandum of understanding between the FRC and the Actuarial Profession and the agreed arrangements for communication between the Actuarial Profession and the FRC.
 
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The Financial Reporting Council Limited is a company limited by guarantee. Registered in England number 2486368. Registered Office: 5th Floor Aldwych House, 71-91 Aldwych, London WC2B 4HN

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