1
Application and Definitions
1.1
This Part applies to:
- (1) a UK Solvency II firm;
- (2) in accordance with Insurance General Application 3, the Society, as modified by 7;
- (3) in accordance with Insurance General Application 3, managing agents, as modified by 7; and
- (4) third country branch undertakings excluding Swiss general insurers.
- 01/01/2016
- Legal Instruments that change this rule 1.1
1.2
- 01/01/2016
- Legal Instruments that change this rule 1.2
1.3
In this Part, the following definitions shall apply:
has the meaning given in Insurance – Senior Management Functions 3.1.
has the meaning given in Insurance – Senior Management Functions 8.2.
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2
Appointment of Actuaries
2.1
A firm must appoint an external actuary if it does not have the capability within the firm or the firm’s group to comply with Conditions Governing Business 6.1 or the relevant requirements of the Solvency II Regulations.
2.2
A firm carrying on with-profits insurance business must appoint one or more actuaries to perform the With-Profits Actuary function in respect of all classes of its with-profits insurance business.
- 01/01/2016
- Legal Instruments that change this rule 2.2
2.3
A firm must:
- (1) when it becomes aware that a vacancy of an actuary required under 2.1 or 2.2 will arise or has arisen:
- (a) notify the PRA; and
- (b) give reasons for the vacancy,
- without delay, using the form referred to in Notifications 10.3;
- (2) appoint an actuary to fill any vacancy of an actuary required under 2.1 or 2.2;
- (3) ensure that the replacement actuary can take up the vacant post at the time the vacancy arises or as soon as reasonably practicable after that; and
- (4) when a new actuary is appointed:
using the form referred to in Notifications 10.3.
- 01/01/2016
- Legal Instruments that change this rule 2.3
2.4
- 01/01/2016
- Legal Instruments that change this rule 2.4
2.5
- 01/01/2016
- Legal Instruments that change this rule 2.5
2.6
- 01/01/2016
- Legal Instruments that change this rule 2.6
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3
Actuaries’ Qualifications
3.1
Before a firm appoints an actuary under 2.1 or 2.2, it must take reasonable steps to ensure that the actuary has the required skill and experience to perform his functions under the regulatory system commensurate with the nature, scale and complexity of the firm’s business and the requirements and standards under the regulatory system to which it is subject.
- 01/01/2016
- Legal Instruments that change this rule 3.1
3.2
- 01/01/2016
- Legal Instruments that change this rule 3.2
3.3
- 01/01/2016
- Legal Instruments that change this rule 3.3
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4
Conflicts of Interest
4.1
A firm must take reasonable steps to ensure that an actuary that it appoints:
- (1) does not perform the function of Chief Executive function;
- (2) does not, if he is to perform the With-Profits Actuary function, become a member of the firm's governing body; and
- (3) does not perform any other function on behalf of the firm which could give rise to a significant conflict of interest.
- 01/01/2016
- Legal Instruments that change this rule 4.1
5
With-Profits Actuary Function
5.1
An actuary appointed to perform the With-Profits Actuary function must:
- (1) advise the firm's management, at the level of seniority that is reasonably appropriate, on key aspects of the discretion to be exercised affecting those classes of the with-profits insurance business of the firm in respect of which he has been appointed;
- (2) advise the firm's governing body as to whether the assumptions used to calculate the future discretionary benefits within the technical provisions under Technical Provisions 9.1 are consistent with the firm's PPFM in respect of those classes of the firm's with-profits insurance business;
- (3) at least once a year, report to the firm's governing body on key aspects (including those aspects of the firm's application of its PPFM on which the advice described in (1) has been given) of the discretion exercised in respect of the period covered by his report affecting those classes of with-profits insurance business of the firm;
- (4) request from the firm such information and explanations as he reasonably considers necessary to enable him properly to perform the duties in (1) to (3);
- (5) advise the firm as to the data and systems that he reasonably considers necessary to be kept and maintained to provide the duties in (4); and
- (6) in the case of a friendly society to which this section applies, perform the function of appropriate actuary under section 12 (Reinsurance) of the Friendly Societies Act 1992 or section 23A (Reinsurance) of the Friendly Societies Act 1974 as applicable, in respect of those classes of its with-profits insurance business covered by his appointment.
- 01/01/2016
- Legal Instruments that change this rule 5.1
6
Duties of Actuaries
6.1
An actuary appointed under this Part must be objective in performing his duties.
- 01/01/2016
- Legal Instruments that change this rule 6.1
6.2
An actuary appointed under this Part must take reasonable steps to satisfy himself that he is free from bias, or from any conflict of interest from which bias may reasonably be inferred. He must take appropriate action where this is not the case.
- 01/01/2016
- Legal Instruments that change this rule 6.2
6.3
When carrying out his duties, an actuary appointed under this chapter must pay due regard to generally accepted actuarial practice.
- 01/01/2016
- Legal Instruments that change this rule 6.3
6.4
An actuary must notify the PRA without delay if the actuary:
- (1) is removed from office by a firm;
- (2) is formally notified of such removal from office;
- (3) resigns before the term of office expires;
- (4) is not re-appointed by a firm; or
- (5) is disqualified from being the actuary of:
- (a) any undertaking or particular class of undertaking; or
- (b) any firm or particular class of firm.
- 01/01/2016
- Legal Instruments that change this rule 6.4
6.5
- 01/01/2016
- Legal Instruments that change this rule 6.5
7
Lloyd’s
7.1
This Part applies to the Society and managing agents separately.
- 01/01/2016
- Legal Instruments that change this rule 7.1