SUP 4
Actuaries
SUP 4.1
Application
- 31/12/2004
SUP 4.1.1
See Notes
- 01/04/2013
SUP 4.1.2
See Notes
This chapter applies to long-term insurers (including friendly societies) and other friendly societies and to the Society of Lloyd's and managing agents at Lloyd's. This chapter does not apply to actuaries advising the auditors of long-term insurers under IPRU(INS) 9.35(1A) or IPRU(FSOC) 5.11(2A), as they are not appointed to act on behalf of the firm.
- 01/04/2013
SUP 4.1.3
See Notes
Applicable sections
| (1) | Category of firm | (2) Applicable sections | |
| (1) | A long-term insurer, other than: | SUP 4.1, SUP 4.2, SUP 4.3 and SUP 4.5 | |
| (a) | a registered friendly society which is a non-directive friendly society; | ||
| (b) | an incorporated friendly society that is a flat rate benefits business friendly society; and | ||
| (c) | an incoming EEA firm | ||
| (2) | A friendly society, other than a friendly society within (1). | SUP 4.1, SUP 4.2, SUP 4.4 and SUP 4.5 | |
| (3) | A Lloyd's managing agent, in respect of each syndicate it manages | SUP 4.1, SUP 4.2, SUP 4.5, SUP 4.6 | |
| (4) | The Society of Lloyd's | SUP 4.1, SUP 4.2, SUP 4.5, SUP 4.6 | |
- 01/04/2013
SUP 4.2
Purpose
- 31/12/2004
SUP 4.2.1
See Notes
Section 340 of the Act gives the
PRA
power to make rules requiring an authorised person, or an authorised person falling into a specified class, to appoint an
actuary
. Section 340 further empowers the
PRA
to make rules governing the manner, timing and notification of such an appointment and, where an appointment is not made, for the
PRA
to make an appointment on the firm's behalf. The rule-making powers of the PRA and FCAunder section 340 of the Act also extend to an actuary's duties.
- 01/04/2013
SUP 4.2.2
See Notes
This chapter defines the relationship between firms and their actuaries and clarifies the role which actuaries play in the appropriate regulator's monitoring of firms' compliance with the requirements and standards under the regulatory system. The chapter sets out rules and guidance on the appointment of actuaries, and the termination of their term of office, as well as setting out their respective rights and duties. The purpose of the chapter is to ensure that:
- (1) long-term insurers (other than certain friendly societies) have access to adequate actuarial advice, both in valuing their liabilities to policyholders and in exercising discretion affecting the interests of their with-profits policyholders; and
- (2) other friendly societies carrying on insurance business (and which have traditionally relied upon actuarial expertise) employ or use an actuary of appropriate seniority and experience to evaluate the liabilities of that business; and
- (3) managing agents of Lloyd's syndicates employ or use an actuary of appropriate seniority and experience to evaluate the liabilities associated with insurance business carried on at Lloyd's.
- 01/04/2013
SUP 4.2.3
See Notes
The functions described by SUP 4.2.2.G (1) are performed by one or more actuaries who are required to hold office continuously and must be approved persons. The principal duty of an actuary appointed to perform these functions is to advise the firm (see SUP 4.3.13 R to SUP 4.3.18 G for the rights and duties of such an actuary).
- 01/04/2013
SUP 4.2.4
See Notes
The function described by SUP 4.2.2 G (2) is performed by an appropriate actuary who is appointed to prepare the triennial investigation and interim certificate or statement required by IPRU(FSOC) 5.2(1) (see SUP 4.4.6 R and SUP 4.5.12 G to SUP 4.5.14 G for the rights and duties of an appropriate actuary).
- 01/04/2013
SUP 4.2.5
See Notes
Actuaries
act as a valuable source of information to the appropriate regulator in carrying out its functions. For example, in determining whether a firm satisfies the threshold conditions, the appropriate regulator has regard to whether the firm has appointed an actuary with sufficient experience in the areas of business to be conducted by the firm.
- 01/04/2013
SUP 4.2.6
See Notes
In making appointments under this chapter and in allocating duties to actuaries, firms are reminded of their obligation under SYSC 2.1.1 R to maintain a clear and appropriate apportionment of significant responsibilities so that it is clear who has which of those responsibilities and that the business and affairs of the firm can be adequately monitored and controlled by the directors, relevant senior managers and governing body of the firm.
- 01/04/2013
SUP 4.3
Appointment of actuaries
- 31/12/2004
Appointment by firms
SUP 4.3.1
See Notes
A firm to which this section applies (see SUP 4.1) must:
(1) appoint one or more actuaries to perform:
(a) the actuarial function (see SUP 4.3.13 R) in respect of all classes of its long-term insurance business; and
(b) the with-profits actuary function (see SUP 4.3.16A R) in respect of all classes of its with-profits business (if any);
(2) notify the PRA , without delay, when it is aware that a vacancy in the office of any such actuary will arise or has arisen, giving the reason for the vacancy;
(3) appoint an actuary to fill any such vacancy that has arisen; and
(4) ensure a replacement actuary can take up office at the time the vacancy arises or as soon as is reasonably practicable after that.
- 01/04/2013
SUP 4.3.2
See Notes
The provisions relating to the duties of an actuary appointed to perform these functions are set out in SUP 4.3.13 R to SUP 4.3.18 G. The functions performed by actuaries appointed by a firm under SUP 4.3.1 R are specified as controlled functions (CF 12, the actuarial function, and CF 12A, the with-profits actuary function) in SUP 10B ( PRA- Approved persons). As a result, an application must be made to the PRA under section 60 of the Act (Applications for approval) for approval by the PRA with the consent of the FCA of the person proposing to take up such an appointment. Section 61(3) of the Act (Determination of applications) gives the PRA three months to grant its approval or give a warning notice that it proposes to refuse the application. A firm should not appoint an actuary until the PRA with the consent of the FCA has approved the actuary. In order to comply with SUP 4.3.1 R, a firm should ensure it applies to the PRA as soon as practicable before the date when it needs the actuary to take office. The PRA will need time to consider the application before deciding whether to grant approval. See SUP 10B ( PRA- Approved persons).
- 01/04/2013
Appointment by the FCA
SUP 4.3.3
See Notes
If a firm, which is required to appoint one or more actuaries under SUP 4.3.1 R, fails to do so within 28 days of a vacancy arising, the PRA may appoint one or more actuaries to perform any function corresponding to the actuarial function or the with-profits actuary function on the following terms:
- 01/04/2013
SUP 4.3.4
See Notes
SUP 4.3.3 R allows but does not require the PRA to appoint an actuary if the firm has failed to do so within the 28 day period. When it considers whether to use this power, the PRA will take into account the likely delay until the firm can make an appointment and the urgency of any pending duties of the actuary.
- 01/04/2013
SUP 4.3.5
See Notes
- 01/04/2013
SUP 4.3.6
See Notes
- 01/04/2013
SUP 4.3.7
See Notes
If the PRA appoints an actuary under SUP 4.3.3 R, he will not be an approved person (not being appointed under SUP 4.3.1 R). However, the firm is still under an obligation to appoint an actuary under SUP 4.3.1 R and will need to seek prior approval of that person (even if the individual it proposes to appoint is the person who has been appointed by the PRA under SUP 4.3.3 R).
- 01/04/2013
Actuaries' qualifications
SUP 4.3.8
See Notes
The appropriate regulator is concerned to ensure that every actuary appointed by a firm under this section has the necessary skill and experience to provide the firm with appropriate actuarial advice. SUP 4.3.9 R to SUP 4.3.10 G set out the appropriate regulator's rules and guidance aimed at achieving this.
- 01/04/2013
SUP 4.3.9
See Notes
Before a firm applies for approval of the person it proposes to appoint as an actuary under SUP 4.3.1 R, it must take reasonable steps to ensure that the actuary:
(1) has the required skill and experience to perform his functions under the regulatory system; and
(2) is a Fellow of the Institute of Actuaries or of the Faculty of Actuaries.
- 01/04/2013
SUP 4.3.10
See Notes
To comply with SUP 4.3.9 R and Principle 3, before an actuary takes up his appointment the firm should ensure that the actuary:
(1) has skills and experience appropriate to the nature, scale and complexity of the firm's business and the requirements and standards under the regulatory system to which it is subject; and
(2) has adequate qualifications and experience, which includes holding an appropriate practising certificate under the rules of the Institute of Actuaries or the Faculty of Actuaries;
and seek confirmation of these from the actuary, or the actuary's current and previous employers, as appropriate.- 01/04/2013
Disqualified actuaries
SUP 4.3.11
See Notes
- 01/04/2013
SUP 4.3.12
See Notes
If it appears to the
FCA or PRA that an actuary has failed to comply with a duty imposed on him under the Act, it have the power to and may disqualify him under section 345 or 345A respectively of the Act. A list of actuaries who are disqualified may be found on the
FCA
website (
http://www.fca.org.uk
).
- 01/04/2013
SUP 4.3.12A
See Notes
A firm must take reasonable steps to ensure that an actuary who is to be, or has been, appointed under SUP 4.3.1 R:
(1) does not perform the function of chairman or chief executive of the firm, or does not, if he is to perform the with-profits actuary function, become a member of the firm's governing body; and
(2) does not perform any other function on behalf of the firm which could give rise to a significant conflict of interest.
- 01/04/2013
SUP 4.3.12B
See Notes
Both the actuarial function and the with-profits actuary function may be performed by employees of the firm or by external consultants, and performing other functions on behalf of the firm will not necessarily give rise to a significant conflict of interest. However, being a director, or a senior manager responsible, say, for sales or marketing in a firm (or for finance in a proprietary firm), is likely to give rise to a significant conflict of interest for an actuary performing the with-profits actuary function. He nevertheless retains direct access to the firm's governing body under SUP 4.3.17 R (2).
- 01/04/2013
The actuarial function
SUP 4.3.13
See Notes
An
actuary appointed to perform the actuarial function must, in respect of those classes of the firm's long-term insurance business which are covered by his appointment:
(1) advise the firm's management, at the level of seniority that is reasonably appropriate, on the risks the firm runs in so far as they may have a material impact on the firm's ability to meet liabilities to policyholders in respect of long-term insurance contracts as they fall due and on the capital needed to support the business, including regulatory capital requirements;
(2) monitor those risks and inform the firm's management, at the level of seniority that is reasonably appropriate, if he has any material concerns or good reason to believe that the firm:
(a) is not meeting liabilities to policyholders under long-term insurance contracts as they fall due, or may not be doing so, or might not have done so, or might, in reasonably foreseeable circumstances, not do so;
(b) is, or may be, effecting new long-term insurance contracts on terms under which the resulting income earned is insufficient, under reasonable actuarial methods and assumptions, and taking into account the other financial resources that are available for the purpose, to enable the firm to meet its liabilities to policyholders as they fall due (including reasonable bonus expectations);
(c) does not, or may not, have sufficient financial resources to meet liabilities to policyholders as they fall due (including reasonable bonus expectations) and the capital needed to support the business, including regulatory capital requirements or, if the firm currently has sufficient resources, might, in reasonably foreseeable circumstances, not continue to have them;
(3) advise the firm's governing body on the methods and assumptions to be used for the investigations required by IPRU(INS) 9.4R or IPRU(FSOC) 5.1R and the calculation of the with-profits insurance capital component under INSPRU 1.3 as applicable;
(4) perform those investigations and calculations in (3), in accordance with the methods and assumptions determined by the firm'sgoverning body;
(5) report to the firm's governing body on the results of those investigations and calculations in (3); and
(6) in the case of a friendly society to which this section applies, perform the functions of the appropriate actuary under section 87 (Actuary's report as to margin of solvency) of the Friendly Societies Act 1992.
- 01/04/2013
SUP 4.3.14
See Notes
IPRU(INS) 9.4R and IPRU(FSOC) 5.1R require firms to which this section applies to cause an investigation to be made at least yearly by the actuary or actuaries appointed to perform the actuarial function, and to report on the result of that investigation. INSPRU 1.3 requires realistic basis life firms to calculate the with-profits insurance component as part of their capital resources requirements.The firm is responsible for the methods and assumptions used to determine the liabilities attributable to its long-term insurance business. The obligation on friendly societies to obtain a report from the 'appropriate actuary' under section 87 of the Friendly Societies Act 1992 applies to a friendly society which is to receive a transfer of engagements under section 86 (transfer of engagements to or by a friendly society). The 'appropriate actuary' in this context is the actuary appointed to perform the actuarial function, rather than the appropriate actuary under SUP 4.4 (Appropriate actuaries).
- 01/04/2013
SUP 4.3.15
See Notes
SUP 4.3.13 R is not intended to be exhaustive of the professional advice that a firm should take whether from an actuary appointed under this chapter or from any other actuary acting for the firm. Firms should consider what systems and controls are needed to ensure that they obtain appropriate professional advice on financial and risk analysis; for example:
(1) risk identification, quantification and monitoring;
(2) stress and scenario testing;
(3) ongoing financial conditions;
(4) financial projections for business planning;
(5) investment strategy and asset-liability matching;
(6) individual capital assessment;
(7) pricing of business, including unit pricing;
(8) variation of any charges for benefits or expenses;
(9) discretionary surrender charges; and
(10) adequacy of reinsurance protection.
- 01/04/2013
The with-profits actuary function
SUP 4.3.16
See Notes
An actuary appointed to perform the with-profits actuary functions must:
(1) advise the firm's management, at the level of seniority that is reasonably appropriate, on key aspects of the discretion to be exercised affecting those classes of the with-profits business of the firm in respect of which he has been appointed;
(2) where the firm is a realistic basis life firm advise the firm's governing body as to whether the assumptions used to calculate the with-profits insurance component under INSPRU 1.3 are consistent with the firm's PPFM in respect of those classes of the firm's with-profits business;
(3) at least once a year, report to the firm's governing body on key aspects (including those aspects of the firm's application of its Principles and Practices of Financial Management on which the advice described in (1) has been given) of the discretion exercised in respect of the period covered by his report affecting those classes of with-profits business of the firm;
(4) request from the firm such information and explanations as he reasonably considers necessary to enable him properly to perform the duties in (1) to (3);
(5) advise the firm as to the data and systems that he reasonably considers necessary to be kept and maintained to provide the duties in (4); and
(6) in the case of a friendly society to which this section applies, perform the function of appropriate actuary under section 12 (Reinsurance) of the Friendly Societies Act 1992 or section 23A (Reinsurance) of the Friendly Societies Act 1974 as applicable, in respect of those classes of its with-profits business covered by his appointment.
- 01/04/2013
SUP 4.4
Appropriate actuaries
- 01/12/2004
Appointment of an appropriate actuary
SUP 4.4.1
See Notes
A firm to which this section applies (see SUP 4.1) and required by IPRU(FSOC) 5.2(1) to ensure that an investigation is carried out must:
(1) appoint an actuary (the "appropriate actuary") to carry out the triennial investigation and prepare an abstract of the report as required by IPRU(FSOC) 5.2(2) and provide the interim certificate or statement as required by IPRU(FSOC) 5.2(3); and
(2) appoint a replacement for that actuary if he ceases to hold office before he has carried out the duty described in (1).
- 01/04/2013
Appropriate actuaries' qualifications
SUP 4.4.2
See Notes
Before a friendly society appoints an appropriate actuary, it must take reasonable steps to ensure that the actuary is a Fellow of the Institute of Actuaries or of the Faculty of Actuaries.
- 01/04/2013
SUP 4.4.3
See Notes
An appropriate actuary should have skills and experience appropriate to the nature, scale and complexity of the firm's business and the requirements and standards under the regulatory system to which it is subject. In complying with Principle 3, a
firm should have regard to whether its proposed appropriate actuary has adequate qualifications and experience, and seek confirmation of this from the actuary, or the actuary's current and previous employers, as appropriate.
- 01/04/2013
SUP 4.4.4
See Notes
A firm must not appoint as appropriate actuary an actuary who has been disqualified by the
FCA
under section 345 of the Act (Disciplinary measures: FCA) or the PRA under section 345A of the Act (Disciplinary measures: PRA) from acting as an actuary either for that firm or for a relevant class of firm.
- 01/04/2013
SUP 4.4.5
See Notes
If it appears to the
FCA or PRA that an appropriate actuary has failed to comply with a duty imposed on him under the Act, it may have the power to and may disqualify him under section 345 or 345A respectivelyof the Act. A list of actuaries who have been disqualified may be found on the
FCA
website (
http://www.fca.org.uk
).
- 01/04/2013
Specific duties of the appropriate actuary
SUP 4.4.6
See Notes
An appropriate actuary must carry out the triennial investigation and prepare an abstract of the report as required by IPRU(FSOC) 5.2(2) and provide the interim certificate or statement as required by IPRU(FSOC) 5.2(3).
- 01/04/2013
SUP 4.5
Provisions applicable to all actuaries
- 31/12/2004
Objectivity
SUP 4.5.1
See Notes
An
actuary
appointed under this chapter must be objective in performing his duties.
- 01/04/2013
SUP 4.5.2
See Notes
Objectivity requires the
actuary
to perform his duties in such a manner that he can have an honest belief in his work and does not compromise the quality of his work or his judgment. An
actuary
should not allow himself to be placed in situations where he feels unable to make objective professional judgments.
- 01/04/2013
SUP 4.5.3
See Notes
An
actuary appointed under this chapter must take reasonable steps to satisfy himself that he is free from bias, or from any conflict of interest from which bias may reasonably be inferred. He must take appropriate action where this is not the case.
- 01/04/2013
SUP 4.5.4
See Notes
- 01/04/2013
SUP 4.5.5
See Notes
If the
actuary
is an employee of the firm, the ordinary incentives of employment, including profit-related pay, share options or other financial interests in the firm or any associate, give rise to a conflict of interest only where they are disproportionate, or exceptional, relative to those of other employees of equivalent seniority.
- 01/04/2013
SUP 4.5.6
See Notes
The guidance and professional conduct standards in current issue from the Institute of Actuaries and the Faculty of Actuaries are relevant to compliance with SUP 4.5.1 R and SUP 4.5.3 R.
- 01/04/2013
Actuaries' statutory duty to report
SUP 4.5.7
See Notes
(1)
Actuaries appointed under this chapter made by the Treasury under sections 342(5) and 343(5) of the Act (Information given by auditor or actuary to a regulator). Section 343 and the regulations also apply to an actuary of an authorised person in his capacity as an actuary of a person with close links with the authorised person.
(2) These regulations oblige actuaries to report certain matters to the
appropriate regulator. Sections 342(3) and 343(3) of the Act provide that an actuary does not contravene any duty by giving information or expressing an opinion to the
appropriate regulator, if he is acting in good faith and he reasonably believes that the information or opinion is relevant to any functions of the
appropriate regulator. These provisions continue to have effect after the end of the actuary's term of appointment.
- 01/04/2013
SUP 4.5.7A
See Notes
In relation to Lloyd's, an effect of the insurance market direction set out at SUP 3.1.13 D is that sections 342(5) and 343(5) of the Act (Information given by auditor or actuary to a regulator) apply also to actuaries who are appointed to evaluate the long-term insurance business of a syndicate.
- 01/04/2013
Termination of term of office
SUP 4.5.8
See Notes
- 01/04/2013
SUP 4.5.9
See Notes
- 01/04/2013
SUP 4.5.10
See Notes
An
actuary
who has ceased to be appointed under this chapter, or who has been formally notified that he will cease to be so appointed, must notify the appropriate regulator without delay:
(1) of any matter connected with the cessation which he thinks ought to be drawn to the appropriate regulator's attention; or
(2) that there is no such matter.
- 01/04/2013
SUP 4.5.11
See Notes
When an actuary appointed under SUP 4.3.1 R ceases to hold office, he ceases to perform a controlled function. A firm is therefore required under SUP 10B.12.10 R to tell the PRA within seven business days of its actuary ceasing to hold office and to complete a withdrawal form (Form C, SUP 10A Annex 6 R). Note also the requirement of SUP 10B.12.12 R in relation to qualified withdrawals.
- 01/04/2013
Rights and duties
SUP 4.5.12
See Notes
- 01/04/2013
SUP 4.5.13
See Notes
When carrying out his duties, an actuary appointed under this chapter must pay due regard to generally accepted actuarial practice.
- 01/04/2013
SUP 4.5.14
See Notes
The standards and guidance issued from time to time by the Institute of Actuariesandthe Faculty of Actuaries are important sources of generally accepted actuarial practice.
- 01/04/2013
SUP 4.6
Lloyd's
- 01/01/2005
Appointment of the Lloyd's actuary and syndicate actuaries
SUP 4.6.1
See Notes
The Society must:
(2) notify the
PRA, without delay, when it is aware that a vacancy in the office of Lloyd's actuary will arise or has arisen, giving the reason for the vacancy;
(4) ensure that the replacement actuary can take up office at the time the vacancy arises or as soon as reasonably practicable after that.
- 01/04/2013
SUP 4.6.2
See Notes
The functions performed by the actuary appointed as the Lloyd's actuary under SUP 4.6.1 R are specified as controlled functions in SUP 10B ( PRA- Approved persons ). As a result, an application must be made to the PRA under section 60 of the Act (Applications for approval) for approval of the person proposing to take up such an appointment. Section 61(3) of the Act (Determination of applications) gives the PRA three months to grant its approval or give a warning notice that it proposes to refuse the application. An actuary should not be appointed until the PRA with the consent of the FCA has approved the actuary. In order to comply with SUP 4.6.1 R, the Society should ensure it applies to the PRA as soon as practicable before the date when it needs the actuary to take office. The PRA will need time to consider the application before deciding whether to grant approval.
- 01/04/2013
Qualifications
SUP 4.6.3
See Notes
Before the Society applies for approval of its proposed appointment of the Lloyd's actuary under SUP 4.6.1 R, it must take reasonable steps to ensure that the actuary:
(1) has the required skill and experience to perform his functions under the regulatory system; and
(2) is a Fellow of the Institute of Actuaries or of the Faculty of Actuaries.
- 01/04/2013
SUP 4.6.4
See Notes
To comply with SUP 4.6.3 R and Principle 3, before the Lloyd's actuary takes up his appointment the Society should ensure that the actuary:
and seek confirmation of these from the actuary, or the actuary's current and previous employers, as appropriate.
(1) has skills and experience appropriate to the nature, scale and complexity of the Society's business and the requirements and standards under the regulatory system to which it is subject; and
(2) has adequate qualifications and experience, which includes holding an appropriate practising certificate under the rules of the Institute of Actuaries or the Faculty of Actuaries;
and seek confirmation of these from the actuary, or the actuary's current and previous employers, as appropriate.
- 01/04/2013
Disqualified actuaries
SUP 4.6.5
See Notes
The Society must not appoint under SUP 4.6.1 R as Lloyd's actuary an actuary who is disqualified by the FCA under section 345 of the Act (Disciplinary measures: FCA) or the PRA under section 345A of the Act (Disciplinary measures: PRA) from acting:
(2) as a syndicate actuary; or
- 01/04/2013
SUP 4.6.6
See Notes
- 01/04/2013
Conflicts of interest
SUP 4.6.7
See Notes
The Society must take reasonable steps to ensure that an actuary who is to be, or has been, appointed under SUP 4.6.1 R:
(1) does not perform the function of chairman or chief executive of the Society; and
(2) does not perform any other function on behalf of the Society which could give rise to a significant conflict of interest.
- 01/04/2013
The Lloyd's actuary function
SUP 4.6.8
See Notes
An actuary who has been appointed to perform the Lloyd's actuary function must:
(1) prepare the statement required under IPRU(INS) 9.58 (1) to be annexed to the Lloyd's Return; and
(2) take reasonable steps to ensure that the general insurance business technical provisions for each syndicate year have been reviewed by the syndicate actuary and that an appropriate opinion has been obtained under SUP 4.6.15 R; and
(3) where a syndicate actuary's opinion has not been provided, sets appropriate technical provisions and, within six months of the end of the financial year, submits a report to the PRA on the setting of those technical provisions.
- 01/04/2013
Appointment of syndicate actuaries
SUP 4.6.9
See Notes
Each managing agent must, in respect of each syndicate it manages:
(1) appoint an actuary (the "syndicate actuary") to carry out the duties described in SUP 4.6.15 R or SUP 4.6.16 R; and
(2) appoint a replacement for that actuary if he ceases to hold office before he has carried out the duties described in SUP 4.6.15 R or SUP 4.6.16 R; and
(3) ensure that the replacement syndicate actuary can take up office at the time the vacancy arises or as soon as reasonably practicable after that.
- 01/04/2013
SUP 4.6.10
See Notes
(1) The insurance market direction and guidance set out in SUP 3.1.4 G to SUP 3.1.15 G is relevant to actuaries appointed to report on the insurance business of members.
(2) References in SUP 4, as applied by SUP 4.1.3 R, to a firm include, where appropriate:
and references to an actuary of a firm should be read accordingly.
(a) a managing agent; and
and references to an actuary of a firm should be read accordingly.
- 01/04/2013
Syndicate actuaries' qualifications
SUP 4.6.11
See Notes
Before a managing agent appoints a syndicate actuary, it must take reasonable steps to ensure that the syndicate actuary:
(1) has the required skill and experience to perform his duties; and
(2) is a fellow of an actuarial body or (except for a syndicate actuary of a long-term insurance business syndicate) is a fellow of the Casualty Actuarial Society who is a member of an actuarial body.
- 01/04/2013
SUP 4.6.12
See Notes
To comply with SUP 4.6.11 R and Principle 3, before a syndicate actuary takes up his appointment a managing agent should ensure that the syndicate actuary:
and seeks confirmation of these from the syndicate actuary, or the syndicate actuary's current and previous employers, as appropriate.
(1) has skills and experience appropriate to the nature, scale and complexity of a syndicate's business and the requirements and standards under the regulatory system applicable to the activities of managing agents in relation to each syndicate which they manage; and
(2) has adequate qualifications and experience, which includes holding an appropriate practising certificate under the rules of the Institute of Actuaries or the Faculty of Actuaries;
and seeks confirmation of these from the syndicate actuary, or the syndicate actuary's current and previous employers, as appropriate.
- 01/04/2013
Disqualified actuaries
SUP 4.6.13
See Notes
A managing agent must not appoint under SUP 4.6.9 R as syndicate actuary an actuary who is disqualified by the FCA under section 345 of the Act (Disciplinary measures: FCA) or the PRA under section 345A of the Act (Disciplinary measures: PRA) from acting:
(1) as a syndicate actuary; or
(2) as a Lloyd's actuary; or
- 01/04/2013
SUP 4.6.14
See Notes
- 01/04/2013
Duties of syndicate actuaries
SUP 4.6.15
See Notes
The syndicate actuary of a long-term insurance business syndicate must:
(1) make an investigation at the end of each financial year into the financial condition of the business carried on through each syndicate year (other than a closed year);
(2) make an abstract of his report of the investigation; and
- 01/04/2013
SUP 4.6.16
See Notes
The syndicate actuary of a general insurance business syndicate must:
(1) review the technical provisions (both gross and net of reinsurance recoveries) of each syndicate year (other than a closed year); and
(2) provide his opinion confirming that the technical provisions for each syndicate year are no less prudent than his best estimate of the amounts required.
- 01/04/2013
SUP 4.6.17
See Notes
If a managing agent becomes aware that the syndicate actuary of a general insurance business syndicate will or may be unable to produce an unqualified opinion under SUP 4.6.16 R, the managing agent must promptly inform the PRA that this is the case.
- 01/04/2013
SUP 4.6.18
See Notes
In carrying out his duties a syndicate actuary must pay due regard to generally accepted actuarial best practice.
- 01/04/2013
SUP 4.6.19
See Notes
The standards and guidance issued by the Institute of Actuaries and the Faculty of Actuaries are important sources of actuarial best practice.
- 01/04/2013