Appointed Actuary Guidelines

Bank Negara Malaysia had recently issued a concept paper titled “Appointed Actuary: Appointment and Duties” where the consultation period for the paper ended on 2nd August 2013. The concept paper proposed BNM’s enhanced supervisory expectations on the duties and responsibilities of the Appointed Actuary as well as greater clarity on the Appointed Actuary’s relationship and interaction with various stakeholders. Some of the major changes are: Appointed Actuary requirement extended to general insurance business, removal of product pricing duty from the Appointed Actuary and, greater oversight by the Board of Directors on actuarial issues. The introduction of the Appointed Actuary system to the general insurance industry is a timely development as it moves towards a de-tariffied business environment. Furthermore, this is also in tandem with the new regulation under FSA and IFSA to split composite license into separate life/family and general entities. The removal of the pricing role from the Appointed Actuary will necessitate more clarity on the requirements and duties of the Pricing Actuary which will hopefully be addressed soon. Additionally, it is a welcome development that the concept paper proposes an explicit condition on the appointment of an Appointed Actuary, that the candidate meets relevant CPD requirements. The final major change, the greater oversight by the Board of Directors on actuarial issues, means that actuaries must rise up to the communication challenge of explaining technical issues using less jargon and to make complex issues comprehensible to non-actuarial stakeholders.