STD 029-5 Appointed Actuary: Appointment and Duties 

The new standard on Appointed Actuary: Appointment and Duties is now finalised following the release of the concept paper a year ago and after a 2-month consultation period.

The following are the changes made that we observe when comparing the concept paper and the final standard:

  • The decision to remove AA from product pricing accountability remains. To mitigate the potential pricing risk, AA is now required to provide opinions on product pricing and the opinions will be tabled at the relevant committees.
  • The effective date of the Standard is 1 January 2015.  For general insurance/takaful business, the effective date of the following requirements will be postponed to 1 January 2017:
    • AA as an employee of the insurer
    • AA not allowed to be accountable for product pricing
    • AA is a resident in Malaysia
  • FSA and FCAS are no longer restricted to be only AA for life and general respectively.  We understand that the fit and proper clause will be relied upon in judging the candidate on a case-by-case basis.
  • The Standard does not apply to reinsurers and retakaful operators.  The requirements will be modified to suit the business models of reinsurers and retakaful operators, presumably through a different standard to be issued subsequently.

The following are additional information related to this matter that you may find useful:

  • A concept paper on FCR will be released
  • AA is allowed to double-up as the CRO
  • The responsibility of ensuring fair treatment of policyholders lies with the CEO and Board, no longer with the AA.  However, AA plays a significant role in advising CEO and Board on the fair treatment.
Tuesday, May 6, 2014 10:53:00 AM Categories: Appointed Actuary BNM FCR
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