Asian News - Australia: Regulator reviews role of Appointed Actuary
Source: Asia Insurance Review | Aug 2016
Prudential regulator APRA is conducting a review of the role of the Appointed Actuary, with the key objective of streamlining and sharpening the actuary’s role and ensuring it has the capacity to provide independent and unbiased advice in an efficient and effective manner.
“This should allow the Appointed Actuary greater capacity to play a strategic role within insurers,” said the regulator in a statement.
The Appointed Actuary, which is a statutory role, provides independent advice to boards and senior management of insurance companies on the key financial risks they face. However, as the responsibilities of the Appointed Actuary have expanded, feedback from actuaries and APRA’s own observations suggest the role has become increasingly compliance-focused. In particular, stakeholders have told APRA that this has limited the ability of the Appointed Actuary to provide strategic advice to the board and senior management. This issue has been particularly acute in the life insurance sector.
Exploring to improve the role of the Appointed Actuary
APRA has also observed the increased turnover of Appointed Actuaries within life insurers, and difficulties in recruiting into Appointed Actuary roles in recent years, and is concerned that these trends are driven by the demanding nature and compliance focus of the role.
To explore the potential to significantly improve the functioning of the role of the Appointed Actuary and ensure that it remains fit-for-purpose, APRA has issued a discussion paper titled “The role of the Appointed Actuary and actuarial advice within insurers”. Key elements of proposals in the paper include increased flexibility, streamlined requirements and greater clarity over the role that Appointed Actuary plays within an insurer.