The ABI has today launched a consultation on proposed guidance for life insurers on when internally sourced actuarial advice should be subject to external review.
The draft guidance aims to help governing bodies of life insurers identify when they should consider obtaining external reviews of internal actuarial advice. Broadly, the guidance outlines this should happen when such advice:
. influences decisions that can result in significant changes in the running of life insurance policies and therefore policyholder benefits.
. affects the decision to enter into and/ or the price paid in large transactions.
. is critical to the implementation of material new regulatory or equivalent requirements.
. is provided in an area where the governing body is aware that industry practice may have developed significantly since the last such advice was obtained.
Subject to responses - due by 31 March 2009 - the ABI's guidance will be issued in July 2009 and will apply from 30 September 2009. The background to the guidance lies in the Morris Review of the actuarial profession and in subsequent work by the Actuarial Profession, the Professional Oversight Board and the Financial Reporting Council.
Peter Vipond, the ABI's Director of Financial Regulation and Taxation, said:
"The ABI guidance will codify existing best practice and will help life insurers take decisions on the basis of robust actuarial advice. It is vital that governing bodies are confident that they can rely on the actuarial advice they receive."
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