1. THE ROLE OF THE ACTUARY IN PRUDENTIAL SUPERVISION
Michael North
Government Actuary’s Department

2. The role of the actuary in prudential supervision
What is an Actuary?
Technical Grounding
Practical Subjects
Broader Experience

3. The role of the actuary in prudential supervision
IAA Core Syllabus - 1
Financial mathematics
Probability and mathematical statistics
Economics
Accounting
Modelling
Statistical methods

4. The role of the actuary in prudential supervision
IAA Core Syllabus - 2
Actuarial mathematics
Life insurance
General insurance
Pensions
Health care
Investment and asset management
Principles of actuarial management
Professionalism

5. The role of the actuary in prudential supervision
General
Insurance
Country Specific
Technical
Application
Pensions
General Investment
Finance
Health
Banking
Business Leader
Life
Research
Analyst
Risk
Compliance
Super- Technician
Education
Capital Projects
Generalist - Modern
Generalist - Traditional
International
Social Security
Government
Applications
Core
Technical
Core
Pre-entry
Knowledge

6. The role of the actuary in prudential supervision
Broader Experience
Some actuaries remain in a technical role
But many go on to other roles:
Finance Director
Marketing
Operations/IT
Managing Director

7. The role of the actuary in prudential supervision
Elements of supervision
Authorisation
Premium rates
Financial soundness
Systems and controls
Policyholder reasonable expectations
Intervention possibilities
Provisions for handling insolvency

8. The role of the actuary in prudential supervision
Life Insurance – Long Term
Appointed Actuary system?
Mathematical Reserves – Basis and Calculations
Assets and ALM
Premium Rates/Product Design
Reinsurance
Business Planning

9. The role of the actuary in prudential supervision
General Insurance – Short Term
Premium and Claims reserves
Asset Liability matching
Premium rates
Reinsurance strategy
DFA (Dynamic Financial analysis)
Risk Based Capital
Assessment of credit and operational risk

10. The role of the actuary in prudential supervision
Government Actuary’s Department in UK
Independent Government Department
Provides consultancy services
Charges fees to cover expenses (non-profit)
Appointed to advise insurance supervisors
Experienced actuaries, primarily from the insurance industry
Clients include new EU members and Middle Eastern countries

11. The role of the actuary in prudential supervision
GAD Services
Regular review of returns and accounts
Product authorisation
New company authorisation (Business Plans)
Drafting law, regulations, Supervisory returns
Guidance manuals for companies and supervisors
On-site inspection manual
Review of reinsurance arrangements

12. The role of the actuary in prudential supervision
Looking forward
Challenges of more open markets
International accounting standards
DFA and financial condition reporting
Increased role for actuaries
Importance of professional associations
Increasing internationalisation

13. The role of the actuary in prudential supervision
Whistle blowing
Professional responsibility
Underpinned by legislation
Interests of policyholders
Responsibility to company
Responsibility to regulator
Need for protection or indemnity?