The Society of Actuaries in Ireland has today responded to the Central Bank of Ireland “Consultation on Requirements for Reserving and Pricing for Non-Life Insurers and Reinsurers” (Consultation Paper CP 73).
The Society supports many aspects of the proposals, such as the improved governance of the reserving process for non-life direct insurance business.
We welcome the statement in the Consultation Paper of the respective roles and responsibilities of the Board of Directors and the Signing Actuary. We also welcome the responsibility placed on Boards to ensure that information and analysis provided to them by the Signing Actuary is actively reviewed and challenged.
However, further work is needed to clarify a number of aspects of the proposed requirements, including the extent of the data checks to be performed by Signing Actuaries. It is important that users of actuarial work know what that work encompasses (and excludes). We suggest that guidance should be developed on this subject. We also suggest that the responsibilities of all the key parties involved in managing an insurer’s data accuracy and integrity should be clearly set out, whether in statutory or regulatory requirements or regulatory guidance, in order to improve the effectiveness of the regulatory regime.
We welcome the proposals to introduce peer review of Signing Actuary work. We suggest that the Central Bank could usefully retain discretion to waive some of the proposed restrictions on who should conduct the peer review, subject to appropriate justification from the (re)insurer. We also propose that the Reviewing Actuary should have flexibility to decide how best to perform the peer review, drawing on his or her knowledge, experience and expert judgement.
We encourage the Central Bank to provide insights into their thinking on how the CP 73 regime will transition into Solvency II, so that firms can manage the transition to Solvency II effectively while engaging with the CP 73 requirements in the meantime.