IFoA Progress and Priorities in Regulating its Members
The actuarial profession is relatively small, but actuaries are particularly influential in advising insurers, pension schemes and other financial institutions that require long-term planning and modelling of financial risk. The Institute and Faculty of Actuaries (IFoA) regulates its members, and the FRC oversees the IFoA by virtue of an agreement in 2006 (now updated) between the FRC and the IFoA following the Morris Review in March 2005.
The FRC monitors developments, assessing those issues that could adversely affect public confidence in actuaries and, where appropriate, undertakes more detailed research and makes recommendations to the IFoA and to other relevant bodies.
See section (v) of the Appendix to the FRC Annual Report and Accounts 2015/16.
Promoting the public interest
The IFoA has made significant progress towards meeting our expectations in response to most of the challenging recommendations we made in May 2009: The Actuarial Profession's Progress and Priorities in Regulating its Members.
It recognises, however, that it still needs to complete a number of projects, to show that it has responded in full to all the outstanding recommendations, and has developed a work programme to complete its response.
The IFoA has responded positively to our recommendations and has agreed to report against the drivers and indicators in the Actuarial Quality Framework. However, we have also encouraged the IFoA not just to respond to our recommendations, but also to consider the public interest outcomes it is looking to achieve in regulating its members, and the quality of its regulatory processes for achieving them.
The IFoA published a new overall strategy in June 2011 and a new regulatory strategy framework in April 2012, which emphasises:
- an integrated approach to regulation across the IFoA's functions and activities;
- strong leadership and a professional executive function, less reliant on volunteers for regulatory policy-making and direction; and
- a more confident relationship with the FRC, responding to our recommendations and challenges but taking responsibility for developing its own regulatory solutions.
The IFoA is supporting its regulatory strategy with additional resources, overseen by an autonomous Regulation Board with a lay chairman. The IFoA has also adopted a more open approach to consultation on its proposals, involving external stakeholders and publishing feedback statements to explain their regulatory decisions.
We welcome the IFoA's development and publication of a regulatory strategy, its enhanced executive function and resources and its greater openness to external stakeholders in its regulatory decision-making.