Answers to the European Commission on the ... - Eiopa - Europa

Annexes
Annex A (Call for Advice No. 16)
Role of <strong>the</strong> actuarial function 147
A.1 The application of appropriate expertise is a key component in <strong>the</strong>
management of insurance undertakings, both in life and non-life
insurance. The evolution <strong>to</strong>wards a risk oriented approach and a risk
sensitive capital requirement gives <strong>the</strong> actuarial function within <strong>the</strong>
company more relevance and responsibilities. Given this, insurers
should be required <strong>to</strong> have actuarial expertises, disregarding whe<strong>the</strong>r
<strong>the</strong> model in use is 'responsible actuary', advisory actuary model or any
o<strong>the</strong>r model.
A.2 In a responsible actuary approach it is expected that <strong>the</strong> actuarial
function is exercised by a person acting as a front-line controller of
prudential financial management. Never<strong>the</strong>less <strong>the</strong> existence of
responsible actuary does not diminish <strong>the</strong> responsibility of <strong>the</strong> Board of
Direc<strong>to</strong>rs.
A.3 The actuary’s responsibility in an advisory actuary model would be <strong>to</strong>
give a professional opinion based on his skills, his experience and, if
applicable, his compliance with <strong>the</strong> Code of Conduct of his association.
It is clear that <strong>the</strong> responsibility for decisions always rests with <strong>the</strong>
Board of Direc<strong>to</strong>rs.
Fit and proper issues
A.4 The appointment of a responsible actuary should be subject <strong>to</strong>
supervisory review and <strong>the</strong> supervisor should have <strong>the</strong> powers <strong>to</strong> have
an unsatisfac<strong>to</strong>ry appointee removed from <strong>the</strong> position.
A.5 The term actuary should not be limited <strong>to</strong> members of an actuarial
society. The term actuary should cover all persons who are
knowledgeable and have relevant experience. Criteria for an actuary
may include:
• Qualified by specified initial and ongoing educational
requirements;
• Membership in <strong>the</strong> local professional body at an appropriate level;
147 When using <strong>the</strong> word "actuarial" in <strong>the</strong> draft answers and annexes it is not CEIOPS’ intention <strong>to</strong> specify <strong>the</strong>
use of professional actuaries. The concept is used <strong>to</strong> describe a specific function applying statisticalma<strong>the</strong>matical
methods developed for <strong>the</strong> use in insurance undertakings.
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