FRC publishes new technical actuarial guidance on models

News types: Guidance

Published: 29 June 2023

Ahead of version 2.0 of Technical Actuarial Standard 100 (TAS 100) coming into effect on 1 July 2023, the Financial Reporting Council (FRC) has today published guidance to help actuaries to comply with TAS 100 modelling requirements. This follows on from the publication by the FRC of the new TAS 100 and associated guidance on 3 March 2023 ( version 2.0 of TAS 100 and guidance ).

The purpose of FRC technical actuarial guidance is to improve the quality of technical actuarial work by assisting actuaries in the interpretation of, and use of judgement in applying, principles-based technical actuarial standards. Compliance with the guidance is not compulsory.

Model risk is a significant risk for entities and TAS 100 requires actuaries to ensure that the models they use in their technical actuarial work are fit for purpose and subject to sufficient controls and testing. The guidance assists actuaries in determining the scope of their responsibilities in this regard and an appropriate level of model governance for their models. It also includes a series of illustrative examples.

The guidance will be of particular use for actuaries but will also have wider interest for users of actuarial information and those interested in actuarial quality, such as audit committee members and pension scheme trustees and sponsors.

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