Joint Forum on Actuarial Regulation publishes risk perspective

News types: Consultation Announcement, Publications

Published: 28 October 2014

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The Joint Forum on Actuarial Regulation (JFAR), through its discussion paper issued by the FRC ‘Joint Forum on Actuarial Regulation: A risk perspective,’ is seeking views on its identification of risks to the public interest where actuarial work is relevant. The JFAR will use feedback to guide its further analysis.
Actuarial work is central to many financial decisions in insurance and pensions and is an important element in other areas requiring the evaluation of risk and financial returns. High quality actuarial work promotes well-informed decision-making and mitigates risks to users and the public; poor quality actuarial work can result in decisions being made which are detrimental to the public interest.
 
Stephen Haddrill, CEO of the FRC and Chair of the JFAR said:

“Actuarial work is vital in promoting trust in financial markets among the millions of UK pensioners and savers and the many investors and investor groups who allocate capital. We want to build justifiable confidence in that work. This paper is very much a “think-piece” - a vehicle for seeking wider input at this preliminary stage on the JFAR’s analysis. In particular we are seeking:
 

  • to improve our analysis of risks to the public interest to guide our future work;

  • to raise awareness of the risks to help mitigate them; and

  • to inform stakeholders about what regulators are doing;

Actuarial involvement is central to some of the risks (for example in modelling in insurance and pensions). In some areas actuarial work supports decisions that have the potential to create a risk to the public interest (for example in the design and distribution of insurance products). Some of the risks we consider are very broad (for example environmental concerns) and actuarial work is just one strand among many that have an impact on the public interest.”

Roundtable events will be organised by the FRC and IFoA to discuss the Risk Perspective. Comments are invited by 20 February 2015 via email to [email protected]. or by post to, Natasha Regan, Financial Reporting Council, 8th Floor, 125 London Wall, London EC2Y 5AS.
 
Notes to editors:

  1. The FRC is responsible for promoting high quality corporate governance and reporting to foster investment.  We set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work.  We represent UK interests in international standard-setting.  We also monitor and take action to promote the quality of corporate reporting and auditing.  We operate independent disciplinary arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies.

    • The Joint Forum on Actuarial Regulation (‘JFAR’) was established in 2013 by the Financial Reporting Council, the Institute and Faculty of Actuaries, the Financial Conduct Authority, the Pensions Regulator and the Prudential Regulation Authority. The JFAR is a unique collaboration between regulators to co-ordinate, within the context of its members’ objectives, the identification and analysis of public interest risks to which actuarial work is relevant. Actuarial work is critical to many members of society, including;


       

      Individuals The financial system The community as a whole
      Insurance policyholders Stability of the UK financial system Taxpayers
      Pension scheme members Consumers / savers / potential policyholders Wider economic activity
      Investors (shareholders) Confidence in the accountancy / actuarial professions Welfare and social inclusion
      Creditors (bondholders) Government / regulators / auditors The environment
      Creditors (others) Boards of companies / sponsors of pension schemes Future generations
      Employees    
      Suppliers    

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