The Central Bank has published Guidance for (re)insurers on changes to the fitness and probity regime in consequence of Solvency II. Guidance is provided on the effect of the legislation reported on above whereby the roles of Chief Actuary (PCF20) and Signing Actuary (PCF44) have been removed as PCFs and a new PCF has been included- the Head of Actuarial Function (PCF48) (HoAF).
From 1 January 2016, where an individual is appointed to the role of HoAF for the first time, approval from the Central Bank must be obtained. Further guidance on the approval process is set out in the Central Bank’s Guidance on Fitness and Probity Standards 2015. Where an undertaking considers a person already fulfils the role of HoAF as at 31 December 2015, pre-approval of the Central Bank is not necessary. However, undertakings were required to provide certain information to the Central Bank regarding such in-situ function holders by 30 November 2015. Section 5 of the Guidance sets out detailed requirements for the HoAF role including the preferred nature and depth of experience. The Central Bank expects that the HoAF will be able to influence decision making at board level in relation to key areas of actuarial expertise. (Re)Insurers are reminded to conduct due diligence on the function holder and ensure the individual complies with the Fitness & Probity Standards.
Section 4 of the Guidance covers aspects of the fitness and probity regime more generally and includes direction on the outsourcing of, as well as combining, Key Functions. A useful section of frequently asked questions is included in the Guidance. The Guidance attaches two useful “Decision Trees” setting out instructions for undertakings regarding the impact of the new regime for PCF 12– 15 and PCF 48.
A link to the Guidance is here.