The Treasury has published a consultation paper linked to the independent review of the actuarial profession sparked by criticism contained in the Penrose Report.
That Report suggested flaws within the profession were one of the reasons behind the Equitable Life debacle. In response the government asked Sir Derek Morris to conduct a wide-ranging review of the actuarial profession.
The Morris review will look at the role of actuaries, the current regulatory framework of the profession, and the roles and responsibilities of the Government Actuary’s Department (GAD). The latter was fiercely criticsed by Penrose.
Lord Penrose argued in his inquiry into the Equitable Life fiasco that too much reliance has been placed on appointed actuaries. He also suggested chief executives should be banned from also being appointed actuaries.
As a result of the findings, the appointed actuary role is to be discontinued at the end of this year. Latest FSA proposals suggest the new regime will give rise to three different actuarial roles: actuarial function holder, with-profits actuary and reviewing actuary.
The Morris review questions whether this will address Lord Penrose’s concerns or not.
“Is there a need to do anything further to address Lord Penrose’s concerns,” is one of the questions Morris asks in the consultation paper.
Morris says: “I hope that all interested parties will feed in their views on all aspects of the Review, and I look forward to discussing the issues with members of the actuarial profession, their customers and other interested parties.”
Consultation ends on 10 September this year, and an interim report will be published in the autumn. A final report, which will include recommendations for change, will be issued in spring 2005.IFAonline
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Alongside Barrett, Boston, Hopkins and Thorman on 17 October