IAC Chair Given IASB Observer Role
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Congratulations to William Hines, Insurance Accounting Committee (IAC) Chair, who has been appointed to serve as an observer to the International Financial Reporting Standard (IFRS) 17 Transition Resource Group (TRG) of the International Accounting Standards Board (IASB).
IFRS 17, issued in May of 2017 and applicable from 2021, is a principles-based standard that requires the application of significant amounts of judgement by actuaries and accountants within preparers and auditors. Due to the complexity and nature of IFRS 17, the IASB has decided to seat a TRG to discuss issues that may arise in the application of the standard and provide input to the Board. The IASB has recognized that many aspects of the application of IFRS 17 will not be purely accounting in nature, but have a blend of accounting and actuarial components. The selection of the IAC chair as an official observer acknowledges the nature of the standard and the value the IASB places on the input from the IAA. This will provide the international actuarial profession with the opportunity to directly dialogue with other stakeholders regarding the application of IFRS 17 and provide an actuarial perspective on those topics to the IASB.
The IAA has worked closely with the IASB over the last 20 years as it has developed both an interim and final accounting standard for insurance contracts. IASB staff have attended many IAC meetings. The IAA was an official member of the IASB’s Insurance Working Group (IWG) and the IAA commissioned several related research projects. |
Joint IAIS–IOPS–OECD–NBS Conference on Consumer Protection in Insurance and Pensions
By Philip Shier, a member of the Pensions and Employee Benefits Committee
I attended the first day of the above conference—which was organized by the International Association of Insurance Supervisors (IAIS), International Organisation of Pension Supervisors (IOPS), Organization of Economic Co-operation and Development (OECD) and National Bank of Slovakia—representing the IAA and the Actuarial Association of Europe (AAE) and, as a guest, was invited to comment at the end of the presentations in Sessions 1 and 2. In my intervention, I noted that the vision statements of both associations referred to contributing to the well-being of society, which encompassed a consumer protection agenda. The most important consumer protection role undertaken by an actuary was helping to ensure the security of the promise made by the institution (insurer, pension fund) to the individual saver, but the actuary also contributed to the design and pricing of insurance products/pension plans and had a duty to ensure that consumers had “fair, clear and not misleading” information on the risks and potential rewards of long-term saving.
Session 1
This was a roundtable on current consumer protection issues in pensions and insurance sectors—commonalities and differences, which included presentations from several countries on consumer protection structures and recent developments. Marius du Toit, a member of our Actuarial Standards Committee, who was also present, highlighted the South African Financial Services Board’s Treating Customers Fairly initiative. There was also a presentation from the European Insurance and Occupational Pensions Authority.
Session 2
This was a roundtable on market trends and their implications for consumer protection in the future, during which participants considered the impact on consumers of Fintech/digitalization. There was also an overview of consumer protection challenges and opportunities from the digitalization of pensions and insurance by Jessica Mosher of the OECD.
The conference provided a good opportunity to develop our relationship with the IOPS and OECD, promote the role of the actuary in consumer protection and network with international regulators.
AAE Committee Meetings
By President Tom Terry
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The meetings of the OECD Working Party on Private Pensions and the Insurance and Private Pensions Committee (jointly with the committee meetings of the IOPS) took place from June 19–21. IAA OECD Subcommittee Chair Christelle Dieudonné, Insurance Regulation Committee Chair Dave Sandberg, IOPS delegate Esko Kivisaari and Pensions and Employee Benefits Committee member Charles Cowling attended.
The funding monograph was discussed; there is some overlap with work relevant to the IAA that the OECD is undertaking on pension fund solvency and interest rates. It has been agreed to forward the monograph to the OECD and ensure there is detailed cross-referencing in the next OECD document on solvency and interest rates.
Present at the IOPS committee meetings were Dariusz Stanko of the IOPS and Esko Kivisaari and Christelle Dieudonné of the IAA. It was noted that the joint publication on actuaries in pension supervision was a success and more joint projects are planned. |
| Picture from left to right: Mathieu Langelier; Jan Svab, Czech association president; Kristoffer Bork, AAE Chairman; Bjarni Gudmundsson, Icelandic association president; Tom Terry. |
Session on Inclusive Insurance and Proportionality of Actuarial Services
The Microinsurance Working Group hosted a session entitled Inclusive Insurance and Proportionality of Actuarial Services at the Microinsurance Network’s annual member meeting in Luxembourg earlier this year. The network brings together multi-stakeholder microinsurance experts for the sustainable development of the industry. The session focused on the IAA paper on proportionate actuarial services in inclusive insurance markets, which is being developed as part of a joint project with the IAIS, and provided an opportunity for key microinsurance industry stakeholders to provide input to the paper’s development.
It was well received, giving rise to some excellent discussion on when and how actuarial skills could and should be involved in microinsurance, and concluded with two prominent microinsurance providers offering to test the draft risk assessment framework being developed for assessing when and to what level actuarial skills are required.
Workshop in Panama City
A workshop entitled Building a Canal from Data to Improved Results was hosted by the Central American Actuarial Association and the Latin America Subcommittee of the IAA Advice and Assistance Committee, in collaboration with Willis Towers Watson. The event, which took place immediately after the ASTIN/AFIR-ERM Colloquium, was attended by 56 participants from various countries.
Experts from Willis Towers Watson led a full-day session on predictive modelling and gave an overview of their basic applications. The agenda for this event provided participants with an opportunity to learn from experts in this field and engage through lively group discussions, and a friendly competition among groups. More details can be found on our website. |
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