News May 2016 FRC promotes confidence in actuarial work through revised Technical Actuarial Standards

FRC promotes confidence in actuarial work through revised Technical Actuarial Standards

05 May 2016
PN 22/16

The Financial Reporting Council (FRC) has today published for consultation proposed changes to Technical Actuarial Standards (TASs). High quality technical actuarial work promotes well informed decision making, so mitigating risk to the public interest. For this reason, the development of a revised framework for Technical Actuarial Standards framework has been an important strategic objective for the FRC.

The consultation invites comments on revisions to proposed changes to Specific TASs for specified areas of work in insurance, pensions and funeral plan trusts where there is a high degree of public interest.
The consultation also seeks views on the risk assessment process which considered the risks to the public interest relating to different areas of technical actuarial work to determine the work to be included in scope of the revised Specific TASs.

The FRC has also published a feedback statement on its November 2014 consultation, A new framework for Technical Actuarial Standards, which proposed changes to the FRC’s framework for technical actuarial standards. This statement also includes the new FRC actuarial standard, Technical Actuarial Standard 100: Principles for Actuarial Work “TAS 100”, which will be applicable to all technical actuarial work.

The revised TASs are expected to come into force in the summer of 2017.

Melanie McLaren, Executive Director, Audit said:

“High quality technical actuarial work is vital in promoting trust in financial markets among the millions of UK pensioners and savers and the many investors who allocate capital. The proposals are designed to provide further confidence to users who rely on actuarial information. The standards are proportionate and we believe the simplified structure should make the standards be easier to apply.  

The risk assessment process ensures that our standards are focused on areas of technical actuarial work where there is a high degree of risk to the public interest.”

The FRC would welcome feedback on the proposals and in particular, views on the risk assessment process it has developed to inform decisions on the scope of the Specific TASs and the output of that process.

Notes to editors:

1.         The FRC is responsible for promoting high quality corporate governance and reporting to foster investment.  We set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work.  We represent UK interests in international standard-setting.  We also monitor and take action to promote the quality of corporate reporting and auditing.  We operate independent disciplinary arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies.

2.         Actuarial work is central to many financial decisions in insurance and pensions but is increasingly recognised as adding value in other areas where the modelling and evaluation of risk and financial returns over time is required. High quality actuarial work assists users by enabling them to make decisions in support of their objectives while mitigating risks to the achievement of those objectives. Poor quality or insufficient technical actuarial work can result in decisions being made which are detrimental to the public interest.

3.         Currently, there are three Generic TASs, which apply across a wide range of technical actuarial work principally in insurance and pensions, on data, modelling and reporting actuarial information. There are also four Specific TASs, applying to work in insurance, pensions, funeral plans and transformations. The Generic TASs were issued in 2009 and 2010 and the Specific TASs were issued in 2010 and 2011.

4.         Under the terms of a Memorandum of Understanding (MoU) between the IFoA and the FRC, the IFoA requires those members to whom the TASs are intended to apply to observe them.

5.         Read or download the consultation on the revised Specific Technical Actuarial Standards (PDF)
Read or download the feedback statement (PDF) on the consultation A new framework for Technical Actuarial Standards.

Reponses to the consultation are invited by 5 August 2016 by email to
InsuranceTAS@frc.org.uk for insurance
PensionsTAS@frc.org.uk for pensions
FuneralPlansTAS@frc.org.uk for funeral plans

or by post to, Robert Inglis, Financial Reporting Council, 8th Floor, 125 London Wall, London EC2Y 5AS.