130 likes | 142 Views
THE ROLE OF THE ACTUARY IN PRUDENTIAL SUPERVISION. Michael North Government Actuary’s Department. The role of the actuary in prudential supervision. What is an Actuary? Technical Grounding Practical Subjects Broader Experience. The role of the actuary in prudential supervision.
E N D
THE ROLE OF THE ACTUARY IN PRUDENTIAL SUPERVISION Michael North Government Actuary’s Department
The role of the actuary in prudential supervision • What is an Actuary? • Technical Grounding • Practical Subjects • Broader Experience
The role of the actuary in prudential supervision • IAA Core Syllabus - 1 • Financial mathematics • Probability and mathematical statistics • Economics • Accounting • Modelling • Statistical methods
The role of the actuary in prudential supervision • IAA Core Syllabus - 2 • Actuarial mathematics • Life insurance • General insurance • Pensions • Health care • Investment and asset management • Principles of actuarial management • Professionalism
CountrySpecific Application BusinessLeader Generalist- Traditional Technical SocialSecurity Generalist- Modern General Insurance Applications Banking International Technical CapitalProjects Life Pre-entry Knowledge Pensions Education Research Health Core Analyst Core Super-Technician GeneralInvestment Risk Compliance Finance Government The role of the actuary in prudential supervision
The role of the actuary in prudential supervision • Broader Experience • Some actuaries remain in a technical role • But many go on to other roles: • Finance Director • Marketing • Operations/IT • Managing Director
The role of the actuary in prudential supervision • Elements of supervision • Authorisation • Premium rates • Financial soundness • Systems and controls • Policyholder reasonable expectations • Intervention possibilities • Provisions for handling insolvency
The role of the actuary in prudential supervision • Life Insurance – Long Term • Appointed Actuary system? • Mathematical Reserves – Basis and Calculations • Assets and ALM • Premium Rates/Product Design • Reinsurance • Business Planning
The role of the actuary in prudential supervision • General Insurance – Short Term • Premium and Claims reserves • Asset Liability matching • Premium rates • Reinsurance strategy • DFA (Dynamic Financial analysis) • Risk Based Capital • Assessment of credit and operational risk
The role of the actuary in prudential supervision • Government Actuary’s Department in UK • Independent Government Department • Provides consultancy services • Charges fees to cover expenses (non-profit) • Appointed to advise insurance supervisors • Experienced actuaries, primarily from the insurance industry • Clients include new EU members and Middle Eastern countries
The role of the actuary in prudential supervision • GAD Services • Regular review of returns and accounts • Product authorisation • New company authorisation (Business Plans) • Drafting law, regulations, Supervisory returns • Guidance manuals for companies and supervisors • On-site inspection manual • Review of reinsurance arrangements
The role of the actuary in prudential supervision • Looking forward • Challenges of more open markets • International accounting standards • DFA and financial condition reporting • Increased role for actuaries • Importance of professional associations • Increasing internationalisation
The role of the actuary in prudential supervision • Whistle blowing • Professional responsibility • Underpinned by legislation • Interests of policyholders • Responsibility to company • Responsibility to regulator • Need for protection or indemnity?