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The IAA and its contribution to the actuarial profession: The importance of Professionalism


The IAA and its contribution to the actuarial profession: The importance of Professionalism Bogota, Colombia 21 November 2011 Chris Daykin, Chief Executive, IAA Fund – PowerPoint PPT presentation

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Title: The IAA and its contribution to the actuarial profession: The importance of Professionalism

The IAA and its contribution to the actuarial
professionThe importance of Professionalism
  • Bogota, Colombia
  • 21 November 2011
  • Chris Daykin, Chief Executive, IAA Fund

International Actuarial Association
  • A short history
  • established 1895 at 1st International Congress
  • association of individual members
  • organising Congresses
  • and, from 1957, starting up Sections
  • International Forum of Actuarial Associations
    formed 1995
  • IAA established with new constitution in 1998
  • to take over role of IFAA
  • worldwide association of professional associations

International Actuarial Association
  • Vision of IAA
  • To seek worldwide recognition of the actuarial
  • as a major player in the decision-making process
  • within the financial services industry,
  • in the area of social protection
  • and in the management of risk,
  • for the well-being of society as a whole

International Actuarial Association
  • Principle of subsidiarity
  • The IAA restricts its activities to strategies
    and programmes which require international
    co-ordination or direction
  • It does not become involved with actions at
    national level, except at express invitation of
    actuarial association or group
  • It avoids duplication or overlap with activities
    of Member Associations or regional groups of
    actuarial associations

International Actuarial Association
  • Requirements for associations to become Full
  • code of conduct meeting minimum requirements
  • disciplinary scheme meeting certain requirements
  • due process before adopting standards of practice
  • education of newly qualified actuaries meets
    requirements of core syllabus and guidelines
  • pay annual dues to IAA

International Actuarial Association
  • Membership
  • Full Member Associations 63
  • Associate Member Associations 26
  • assisting development of profession in 30
    additional countries
  • fully qualified actuaries 60,000 in more than
    100 countries

International Actuarial Association
  • Institutional Members
  • International Association of Insurance
    Supervisors (IAIS)
  • International Accounting Standards Board (IASB)
  • International Social Security Association (ISSA)
  • International Organization of Pension Supervisors
  • Organization for Economic Cooperation
    Development (OECD)
  • Observer Member
  • Asian Development Bank (ADB)

International Actuarial Association
  • Strategic Plan - Five strategic objectives
  • Build relationships with key supranational
  • Expansion of scientific knowledge to wider fields
    to enhance the scope, quality, and availability
    of actuarial services

International Actuarial Association
  • Strategic objectives
  • Common standards of actuarial education and
    principles of professional conduct as well as
    guidance for actuarial practice promote
    development and issuance of actuarial standards
    in jurisdictions of Full Member associations, and
    the global convergence of actuarial standards

International Actuarial Association
  • Strategic objectives
  • Support the development, organization, and
    promotion of the actuarial profession around the
  • Provide a forum for discussion for actuaries and
    actuarial associations

Committees and Working Groups
  • Executive
  • Nominations
  • Audit
  • Accreditation
  • Advice Assistance
  • ERM and Financial Risk
  • Insurance Accounting Standards
  • Insurance Regulation
  • Education
  • Professionalism
  • Pensions and Employee Benefits
  • Social Security
  • Supranational Relations
  • Mortality Working Group
  • Population Issues Group
  • Actuarial Standards

IAA Sections
  • ASTIN general insurance, risk and research
  • AFIR investments and financial risk
  • IACA consulting
  • IAAHS health and care
  • PBSS pensions, benefits and social security
  • IAALIFE life insurance
  • AWB Actuaries without Borders

IAA Activities
  • 30th International Congress of Actuaries,
  • Washington DC, 30 March 4 April 2014
  • IAA Council and Committee meetings
  • Los Angeles, 23-26 May 2012
  • Bahamas, 15-18 November 2012
  • Netherlands, 23-26 May 2013 -
  • Joint Colloquium of PBSS/IAAHS/IACA
  • Hong Kong, 6-9 May 2012
  • Joint Colloquium of ASTIN/AFIR/IAALS
  • Mexico City, 1-4 October 2012

IAA Activities IAA Fund
  • Regional Meeting for Southeast Europe
  • Zagreb, Croatia, 3-4 October 2011
  • Asian Regional meeting
  • Kuala Lumpur, Malaysia, 10 October 2011
  • 2nd African Actuarial Congress
  • Nairobi, Kenya, 24 November 2011
  • Introduction to the actuarial profession seminar
  • Ulan Bator, Mongolia, 14-15 November 2011
  • Latin American meeting
  • Bogota, Colombia, 21-23 November 2011
  • Introduction to the actuarial profession seminar
  • Luanda, Angola, 24-25 November 2011

The importance of professionalism
What is a profession?
  • Six key characteristics of a profession are
  • members join together to apply a specialised
  • the skill has been developed through appropriate
  • members have a special relationship with those
  • recognised by the public as an authority in field
    of expertise, able to serve the public interest
  • standards of competence and conduct of members
  • high level of integrity by members in exercising

What is expected of us as professional people?
  • demonstrating, and applying appropriately,
    specialist skills
  • providing reliable up-to-date technical knowledge
    and advice
  • complying with Professions code of conduct and
  • complying with legislation and regulators
  • performing statutory roles to a high standard
  • behaving ethically
  • exercising judgement with high level of integrity
  • communicating well
  • having due regard to the interests of those
  • (continued)

What is expected of us as professional people?
  • respecting and supporting others
  • relationship of trust with clients (fiduciary
  • being reliably confidential
  • life-long learning developing our knowledge and
  • having no adverse disciplinary record
  • assisting the profession to serve the public
  • contributing to public debate
  • contributing to the work of the profession

Some key principles of professionalism
  • Integrity
  • respect, confidentiality, honesty, openness
  • Competence and Care
  • understand the client and keep competence
  • Impartiality
  • avoidance of bias and conflict of interest
  • Compliance
  • compliance and challenging non-compliance
  • Open Communication
  • clear, appropriate and accurate

IAA Core Syllabus
  • Subject 10 Professionalism
  • characteristics and standards of a profession,
    including need for
  • specialised skill and education
  • ongoing training and development
  • high quality of advice
  • exercise of independent judgement
  • objectivity, integrity and accountability
  • code of conduct
  • discipline process
  • practice standards set by actuarial bodies or
    other stakeholders
  • regulatory roles of actuaries
  • the professional role of the actuary

International Actuarial Association
  • Work on professionalism
  • Common understanding of principles of
  • International actuarial work
  • Development of model standards of practice
  • Preparation of a pack for professionalism

International Actuarial Association
  • Principles of professionalism
  • Professionalism, for the actuarial profession,
  • The application of specialist actuarial knowledge
    and expertise,
  • The demonstration of ethical behaviour,
    especially in doing actuarial work, and
  • The actuarys accountability to a professional
    actuarial association or similar professional
    oversight organisation.

International Actuarial Association
  • Three high level principles of professionalism
  • Knowledge and expertise
  • Values and behaviour
  • Professional accountability

International Actuarial Association
  • Knowledge and expertise
  • An actuary shall perform professional services
    only if the actuary is competent and
    appropriately experienced to do so
  • This principle is supported by the following four
  • Specialist knowledge
  • Professional communication
  • Required education
  • Continuing professional development

International Actuarial Association
  • Values and behaviour
  • An actuary shall act honestly, with integrity
    and competence, and in a manner that fulfils the
    professions responsibility to the public and
    upholds the reputation of the actuarial
  • This principle is supported by the following five
  • Ethical behaviour
  • Integrity
  • Independent advice
  • Trust and reputation
  • Public interest

International Actuarial Association
  • Professional accountability
  • An actuary shall be accountable to a
    professional actuarial association or similar
    professional oversight organisation.
  • This principle is supported by the following
    three elements
  • Entry and qualification standards
  • Code of conduct
  • Disciplinary process

Standards of practice
  • whilst the Code of Conduct deals with broad
    ethical and behavioural issues
  • Standards of Practice are concerned with
    specific behaviours required of the actuary in
    relation to particular practice area
    applications, often in connection with statutory
    duties imposed on the actuary.

Standards of practice
  • neither the IAA nor the Groupe Consultatif
    requires Full Member Associations to issue
    Standards of Practice
  • however, if they do, they must first have in
    place a compliant due process for consulting on
    the introduction and wording of Standards of

Standards of practice
  • the Associations in North America and in the UK
    have issued many Standards of Practice
  • also in a number of other countries
  • in some countries actuarial standards of practice
    are laid down by the regulator
  • actuaries should take care to understand which
    Standards of Practice (if any) apply to any
    actuarial services they are providing in any
    jurisdiction where they are working.

What is going on out there?
  • globalization of business and commerce, WTO and
  • demand for level playing field and transparency,
    including in the financial sector
  • Regulated Professions Task Force (reported to G20
    on 11 Nov)
  • recommendation for global convergence of
    standards, including actuarial standards
  • International Financial Reporting Standards
    (IFRS) being developed by the IASB (International
    Accounting Standards Board)
  • in September 2009, G20 called the accounting
    bodies to redouble their efforts

What is going on out there?
  • IAIS is developing international standards for
    solvency regulation and supervisory purposes
  • Common Framework for the Supervision of
    Internationally Active Insurance Groups
    expected to take three years to develop
  • financial stability issues
  • Own Risk Solvency Assessment (ORSA)
  • cooperation with banking and securities

Why develop actuarial standards of practice?
  • To serve the public interest
  • enhance the quality of delivery of actuarial
  • ensure actuarial services meet the needs of users
  • narrow the range of results
  • contribute towards harmonisation and convergence
  • To support professionalism
  • promote consistency
  • provide guidance on good practice
  • To protect actuaries
  • reduce the likelihood of the actuary being sued

What is happening now?
  • Due Process Task Force (DPTF)
  • Interim Actuarial Standards Sub-committee (of EC)
  • Develop the following standards (to be confirmed)
  • generic standard on data, modelling, reporting,
    etc. (ISAP1)
  • specific standard on actuarial work for IFRS4
  • specific standard on actuarial work for IAS19
  • specific standard for social security actuaries
  • specific standard on actuarial work on ERM
  • Task force on permanent structure for
  • Groupe Consultatif will develop specific
    standards for Solvency II

Objectives of standards (IASSC paper at Zagreb)
  • International Standards of Actuarial Practice are
    established to promote high quality actuarial
    practice globally.
  • High quality actuarial practice
  • helps serve the public interest by benefiting
    users of actuarial work, regulators, and
    participants and beneficiaries of financial
    security programs and
  • benefits both actuarial associations and
    individual actuaries by providing clear guidance
    and enhancing the credibility of the actuarial

Objectives of standards (IASSC paper at Zagreb)
  • Characteristics of high quality actuarial
    practice include
  • Consistency providing users of the actuarial
    work product with confidence that practice is
    consistent over time and across clients subject
    to similar requirements
  • Usefulness adding substantial value to
    financial analysis and,
  • Clarity clearly articulated and understandable.

Exposure draft for International Standard of
Actuarial Practice 1 (ASAP1)
  • exposure draft issued 26 July 2011
  • deadline for comments is 1 December 2011
  • The IASSC particularly asks us to consider the
    following questions
  • 1. Is the guidance clear and unambiguous?
  • 2. Is the guidance at the right level of detail,
    or should it be more or less detailed?
  • 3. Is the guidance on when to issue an actuarial
    report and what should be covered in the report
  • 4. Are there other matters that should be
    included in this standard on general actuarial
    practice? Are there some included here that
    should not be?
  • 5. The intent is to use the same format for
    future ISAPs. Is the format of this ISAP
  • 6. Is the change in nomenclature (from IASP to
    ISAP) appropriate?

Exposure draft for International Standard of
Actuarial Practice 1 (ASAP1) - topics
  • Section 3. Appropriate Practices
  • 3.1 Acceptance of Assignment
  • 3.2 Knowledge of Relevant Circumstances
  • 3.3 Employed Actuaries
  • 3.4 Reliance on Others
  • 3.5 Materiality
  • 3.6 Data Quality
  • 3.7 Assumptions and Methodology
  • 3.8 Assumption Setting
  • 3.9 Process Management
  • 3.10 Responsibility for Assumptions and
  • 3.11 Peer Review
  • 3.12 Documentation

Continuing Professional Development
  • Formally defined by the IAA as
  • The development of knowledge and of technical,
    personal, professional, business and management
    skills and competencies throughout a persons
    working life.
  • CPD guidelines approved by IAA Council on 2
    October 2011

Continuing Professional Development
  • CPD and the individual actuary
  • CPD is an important element of the actuarys
    lifelong process of learning and development
    within the profession. The initial qualification
    process is the first step in this journey.
    Thereafter, it is the responsibility of all
    actuaries to plan their own professional
    development programme.

Continuing Professional Development
  • The importance of CPD for the individual actuary
  • to ensure competence for everything you do
  • to gain knowledge and experience
  • to keep up to date and stay abreast of
  • to learn about new methodologies
  • to develop non-technical and professional skills
  • to be able to move into new fields of activity
  • to keep up with new standards of practice and

Continuing Professional Development
  • CPD should include
  • technical skills
  • professionalism
  • personal skills
  • communication skills
  • management skills
  • business skills
  • IT skills
  • keeping up to date with developments

The IAA and its contribution to the actuarial
professionThe importance of Professionalism
  • Bogota, Colombia
  • 21 November 2011
  • Chris Daykin, Chief Executive, IAA Fund
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