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The Actuary The magazine of the Institute & Faculty of Actuaries

A good year for the IAA

Supranational outreach

The International Actuarial Association (IAA)’s first strategic objective is to promote the role, reputation and recognition of the actuarial profession in the international domain.

Much work has been done with the International Accounting Standards Board on the Exposure Draft of IFRS4, the insurance contracts standard, and with the International Association of Insurance Supervisors on solvency and systemic risk issues. The influence of these bodies on UK financial reporting and solvency requirements is considerable. We have also held meetings with the International Monetary Fund and Geneva Association and presented to the Organisation for Economic Cooperation and Development (OECD) on insurance topics, held meetings with the World Bank on pensions in developing countries, attended meetings of the International Organisation of Pension Supervisors and OECD on private pensions, and arranged a discussion forum in Geneva with the International Labour Organization, Information Systems Security Association and Aga Khan Foundation on social security and microinsurance topics.

In addition, we met the World Trade Organization to keep up to date with developments on the global agreement on trade in financial services.

Actuarial standards, strategic discussions
A task force set up to address the strategic goals of the IAA for international actuarial standards recommended a goal of ’medium convergence‘. This means that model International Actuarial Standards of Practice (IASPs) should be developed for member associations to adopt, adapt or confirm congruence with, on a voluntary basis over the foreseeable future.

This was agreed by Council in October and an interim structure is being introduced in 2011 to develop IASPs for IFRS4, IAS19, Social Security calculations and for work in enterprise risk management (ERM), together with a generic IASP to accompany them. A more permanent standard-setting structure is to be developed to replace the interim structure after 2012.

The IAA also hosts a standard-setters roundtable, which includes the UK’s Board for Actuarial Standards, the US’s Actuarial Standards Board and other actuarial standard-setting bodies from around the world.

A special task force addressed the question of how to promote the role of the actuary in ERM. Their recommendations included extending the AFIR Section to include ERM topics and discussing the role of actuaries in ERM with key stakeholders.

Discussions have also been taking place around the strategic goals of the IAA in education. This is likely to result in greater availability of education programmes and qualifications for the developing countries, something that the UK profession has long espoused, along with the development of a global distance learning toolkit.

Membership and engagement
A milestone has been the achievement by the China Actuarial Association of full membership, representing the fruition of many years of support and encouragement, not least by the Institute and Faculty. We also saw Kenya become a full member and the admission as associate members of the associations in Azerbaijan, Mongolia and Tanzania. There are now 63 full member associations and 26 associate member associations. The number of fully qualified actuaries represented is around 55,000.

The IAA Council meets twice a year, along with the main committees. There are typically around 300 people involved in these meetings and the UK Actuarial Profession is well represented.

Publications, working groups, sections
The IAA has a virtual library enabling access to over one million titles. In addition to the regular issues of ASTIN Bulletin, which is the official journal of the IAA, major publications this year were a book on stochastic modelling and a monograph on internal models.

Working groups have been established for mortality, microinsurance, population issues and, most recently, environment issues. A group of experts has also been assembled to identify the specific requirements of Takaful and other Shariah-compliant products.

The IAA Sections cover life, non-life, pensions and social security, investment and enterprise risk and health, as well as a section for consulting actuaries, the International Association of Consulting Actuaries (IACA), and a section for volunteers, actuaries without borders. They have around 3,600 members overall and rising. The International Congress in Cape Town this year involved all the Sections and nearly 1,600 actuaries from over 100 countries. Look on www.actuaries.org for details of 2011 Section colloquia.

Paul Thornton, IAA president