The International Actuarial Association Approves ISAP 1

The International Actuarial Association (IAA) approved its first International Standard of Actuarial Practice, ISAP 1, on general actuarial practice, at its Council meeting held in Nassau, Bahamas on the 18th of November 2012.  

An ISAP is a model for actuarial standard-setting bodies to consider. The IAA encourages actuarial standard-setting bodies to study the ISAP and to consider taking one of the following courses of action, if it has been determined that this ISAP is relevant for actuaries in their jurisdiction:

• Adopting this ISAP as a standard with appropriate modification;
• Endorsing this ISAP as a standard as an alternative to existing standards;
• Modifying existing standards to obtain substantial consistency with this ISAP; or
• Confirming that their existing standards are already substantially consistent with this ISAP.

This model standard was proposed by the Actuarial Standards Committee (ASC) of the IAA in compliance with the IAA’s due process for International Standards of Actuarial Practice. As the finalized standard was developed, the ASC took into consideration the numerous comments received on the exposure draft published in July 2011, resulting in several improvements.

The intention of a standard of actuarial practice is to promote a greater consistency of approach to actuarial practice in a given situation, so as to increase the confidence of clients and the public in the actuarial work product, but without unnecessarily constraining the exercise of actuarial judgment or creativity.

ISAP 1 is a general standard intended to apply to all actuarial services performed by an actuary except for those elements of guidance that are explicitly superseded by another standard such as a practice-specific standard or by law.

The purpose of ISAP 1 is to provide guidance to actuaries so that the intended users of actuarial services will have confidence that:

• Actuarial services are carried out professionally and with due care;
• The results are relevant to their needs, are presented clearly and understandably, and are   complete; and
• The assumptions and methodology employed (including, but not limited to, models and modelling techniques) are disclosed appropriately.

ISAP 1 is available on the IAA website (www.actuaries.org) under publications and can also be accessed by clicking on the link provided under ‘Hot Topics’ on the homepage.

This new standard directly supports the IAA’s strategic objective to promote the development and issuance of actuarial standards in the jurisdictions of all Full Member Associations, and the global convergence of actuarial standards. If you have any questions about ISAP 1 or wish to learn more about it, please contact the Director of Technical Activities at the IAA Secretariat.