Monitoring and Scrutiny of Actuarial Work
Following our review of monitoring and scrutiny of actuarial work between 2007 and 2009, we concluded that the actuarial profession’s primary strategy should be to support the existing regulatory and market mechanisms for monitoring and scrutiny of actuarial work, and that it should only itself undertake independent monitoring if other measures proved inadequate. However, given the reliance which is placed on consulting actuaries to have proper quality controls over their work, we recommended that the Institute and Faculty of Actuaries (IFoA) should (i) consider extending its practising certificate arrangements to cover all consulting actuaries, and (ii) seek to place greater regulatory reliance on the quality assurance arrangements maintained by firms, including:
- A senior actuary to provide professional leadership within the actuary’s firm;
- Arrangements for handling conflicts of interest and confidential information;
- Controls on competence and quality control, such as checks on individual actuaries’ work;
- Management of customer relationships, including terms of reference, complaints handling and compensation for shortcomings; and
- Arrangements to support communications with regulators and whistle-blowing.
Discussion paper: Monitoring and scrutiny of actuarial work (May 2008)
Monitoring and scrutiny of actuarial work: summary of consultation responses (January 2009)
The Actuarial Profession's progress and priorities in regulating its members (May 2009)
During 2013/14, we established the Joint Forum on Actuarial Regulation (JFAR) with other regulators (the IFoA, the Prudential Regulation Authority (PRA), the Financial Conduct Authority (FCA) and the Pensions Regulator (tPR)). In order to support better coordination of monitoring through the JFAR, we developed a shared understanding of the other regulators' monitoring activities in relation to actuarial work.
The IFoA has now published new cross-practice guidance for individual actuaries, APS X2: Review of Actuarial Work (PDF), which is effective from 1 July 2015. This guidance deals with when and how reviews of actuarial work should be carried out. The FRC provided input to the IFoA during the drafting of the new guidance.
In 2014/15, the IFoA piloted an accreditation scheme for employers of actuaries. We continue to work with the IFoA to agree a detailed reporting package of information and data so that we can focus both on the public interest outcomes the IFoA is seeking to achieve and the quality of its regulatory processes of achieving them.
During 2014/15, we consulted on "JFAR: A risk perspective" - a view of risks to the public interest where actuarial work is relevant, which we had developed with the JFAR’s assistance. We also started to review the approach to monitoring the quality of actuarial work based on that risk assessment and this work continues into 2015/16.