The Institute and Faculty of Actuaries (IFoA) has launched a new monitoring scheme, designed to improve the effectiveness of actuarial regulation, as well as make wide-spread improvements across the profession. The Actuarial Monitoring Scheme was created following a consultation by the IFoA.
First announced in 2018, the IFoA has recently unveiled the Actuarial Monitoring Scheme (AMS), designed to "improve the effectiveness of actuarial regulation in the public interest, provide meaningful, credible, independent feedback to Members and their employers and promote ongoing reinforcement and continuous improvement."
The AMS is part of a new framework, which aims to improve professionalism across the industry by:
- Providing evidence of the quality of actuarial work;
- Promoting best practice; and
- Considering issues of relevance to members in the profession.
The FRC was supportive of the review with Stephen Haddrill, Chief Executive stating:
"We welcome the IFoA’s new monitoring scheme which will provide insight into the quality of actuarial work and the effectiveness of actuarial standards. By promoting best practice and the importance of actuarial work the new scheme is a positive step for the actuarial profession."
The IFoA has confirmed that regular Thematic Reviews will take place (ensuring that areas or work relevant to actuaries are covered) as well as data gathering on an ad hoc basis. These will include questionnaires and analysis of insights from other regulators. The changes will also see the introduction of a new Actuarial Review Team which will undertake reviews on topics relevant to actuaries.
The AMS will encompass two thematic reviews in 2020, focusing respectively on pensions and insurance (areas where it was felt that the profession requires the most assistance and guidance).
The pensions review will focus on the actuarial factors used to calculate member benefits. It will look at current practices adopted by actuaries including how factors such as commutation at retirement are determined for pension schemes and how frequently these factors are reviewed.
This review will consider the role of actuarial advice in the pricing of specific general insurance products. The IFoA has recognised that pricing is a complex area for actuaries and the review will consider the processes adopted by actuaries and the challenges they face when providing advice in this area.
We can expect the AMS to produce regular feedback in relation to the findings of the thematic reviews, which will be of wide interest within the industry. Here at RPC we will await the AMS' findings with interest and report further upon any significant findings.