POB to consult on quality rules for pension actuaries
UK - The Professional Oversight Board, an operating body of the Financial Reporting Council (FRC), is to consult on possible improvements to the professional quality assurance requirements for actuaries, following a review of the monitoring and scrutiny of actuarial work.
In its publication of a summary of responses to a previous discussion paper on the progress made in relation to the Morris Review recommendations in 2005, and feedback on three possible regulatory strategies going forward, the Oversight Board rejected the idea of external monitoring of actuarial work.
Instead, the report revealed, in the area of pensions it would pursue options put forward under Strategy 2 - improving professional quality assurance requirements - through working with the Actuarial Profession, the principal regulators and others to develop draft recommendations.
Under this strategy possible options the Oversight Board will examine includes whether it should:
The Oversight Board said it would assess the regulatory impact and cost of the options, and will "seek views through a further public consultation", which is expected to be published in the first half of 2009.
Final recommendations would then be presented to the Actuarial Profession by the end of the year, and although the recommendations will be directed at actuarial work in pensions, the Board admitted it intends to consider "whether any of these recommendations should also be applied more generally so as to apply in other areas of actuarial work".
The report, which noted there is enhanced independent scrutiny of actuarial advice since the Morris Review but limited monitoring of compliance with professional standards, also said the next consultation will "explore the possibility of a greater regulatory emphasis on the role of firms" rather than the individual.
The summary of responses, published alongside the 'Actuarial Quality Framework', also dismissed the idea of external monitoring of actuarial work "at this stage" and instead said it would monitor the operation of the other strategies "to see if they are effective in enhancing proportionately the monitoring and scrutiny of actuarial work".
Dame Barbara Mills, chair of the Oversight Board Chair, said: "We shall not at this stage be calling for active external monitoring, such as an actuarial inspection unit, as there are more proportionate actions whose impact should be considered first.
"The responses we received to our discussion paper on monitoring and scrutiny of actuarial work have been well thought through and insightful. They have helped us formulate our approach to professional regulation generally and encouraged us to consult further on quality assurance options," she added.
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