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Committees

Enterprise and Financial Risk

Terms of Reference

Created – 1 September 1995, Updated – 9 August 2016

1. Membership

To consider, from the point of view of the actuarial profession, matters relating to enterprise, financial and investment risk, especially where referred to the committee by the IAA Executive Committee, the Council or by the President, and to make proposals on action required.

2. Purpose

To consider, from the point of view of the actuarial profession, matters relating to enterprise, financial and investment risk, especially when referred to the committee by the IAA Executive Committee, the Council or by the President, and to make proposals on action required.

3. Role

In particular, the Committee will:

  • Develop actuarial interest in "whole of enterprise" risks in a systematic and holistic manner, particularly for financial institutions.
  • Develop thought in the area of asset and liability matching and management.
  • Advocate consistency in actuarial practice and understanding of economic theory with particular reference to financial economics.
  • Consider broad themes of investment such as efficient markets, behavioural finance and complex adaptive systems.
  • Promote standards, credentials and long term market research in the area of risk.
  • Develop and promote multi-disciplinary communication and approaches to the study of risk.
  • Develop and coordinate interfaces with other risk (ERM) organisations.
  • Where appropriate, cooperate with other IAA Committees and Sections in considering issues of joint interest to ensure a coordinated approach in making submissions to interested organisations.
  • Promote and encourage the development of skills in risk and investment within the actuarial profession worldwide, having regard to the IAA's Education Syllabus and make recommendations, wherever appropriate, to the IAA Education Committee on subjects related to risk and investment.

4. Decision-making authority

The Committee operates within the IAA Statutes and Internal Regulations and makes recommendations for action by Council or the IAA Executive Committee as appropriate.

5. Operational matters

Frequency of meetings: The Committee meets at least twice a year in conjunction with each IAA Council meeting and may also meet by teleconference or electronic link as required.

Agendas and papers: All meetings will have a formal agenda prepared by the Chairperson that generally must be distributed, along with required papers, at least one week before each meeting and made available on the Committee page on the IAA website.

Minutes: Minutes will be prepared and distributed as soon as practicable after each meeting and will be made available on the Committee page on the IAA website.

Votes: The committee shall attempt to make decisions by consensus. However, where necessary, decisions may be made by a simple majority of the Committee members voting either at the meeting or electronically, with the Chairperson having a casting vote in the event of a tie.

Reporting: The Committee reports to the Executive Committee (EC). To facilitate communication, the EC appoints one of its members to serve as the EC liaison person.
The Committee Chairperson will submit a proposed workplan and, where applicable, a related budget for the coming year, for EC consideration and approval.
The Chairperson will provide a written update report to the IAA Secretariat after each bi-annual Committee meeting.

IAA Liaison: The Committee will liaise with other IAA Committees and Sections as required to carry out its role and activities, and help these committees achieve theirs. This will include at least, where relevant, Actuarial Standards Committee (ASC) and its task forces; Pensions and Employee Benefits, Insurance Regulation, and Insurance Accounting Committees; and the AFIR/ERM Section.

External Liaison: The Committee will liaise with external stakeholders as required to undertake its role and activities, including, where relevant, the IAIS, IMF, World Bank, and international risk management organizations.
These liaisons are subject to any requirements or processes of the IAA Statutes and Internal Regulations, and established policies and protocols. Public statements are made in accordance with the Branding Policy and the Due Process for Making a Public Statement.

Other operational matters: The Committee will share information regarding developments and initiatives in relation to matters relevant to enterprise and financial risk via the Committee page on the IAA website.

6. Subcommittees, Working Groups and Task Forces reporting to the Committee

Own Risk Solvency Assessment Subcommittee (Joint subcommittee with the Insurance Regulation Committee)