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The Actuary The magazine of the Institute & Faculty of Actuaries

General InsuranceBoard news

Board membership changes

We are very pleased to welcome a new member to the General Insurance Board, Andrew Hitchcox. Andrew is well known to many of you through his membership of the GIRO and Sessional Meetings Committee.

Terry Clarke is standing down as deputy chairman of the board. We are very grateful to him for his contributions and hard work over the past years and wish him well in his new appointment in Switzerland. Terry’s place as deputy chairman is being taken by Derek Newton. Derek is also chairman of the GI Current Issues Committee. Please read its latest Current Issues Newsletter which is on the website at: www.actuaries.org.uk/files/pdf/general_insurance/gicinews20040928.pdf

New guidance

The board is issuing a draft new guidance note for exposure as an exposure draft (EXD53) under due process. The guidance note is entitled ‘Transfer of general insurance business of an authorised insurer – role of the independent expert’ and can be found on the website at: www.actuaries.org.uk/files/pdf/general_insurance/exd53.pdf

The exposure draft provides professional guidance to actuaries who act in the role of an independent expert in connection with the transfer of the general insurance business of an authorised insurer. The board considers that the extension of the ‘independent expert’ regime into non-life business makes it desirable that a new guidance note is developed for actuaries in this area. We are introducing this new guidance following the disapplication of GN15 ‘Transfer of long-term business of an authorised insurance company – role of the independent actuary’.

This is a new role for general insurance actuaries and, in this context, the General Insurance Board considers that it is necessary to provide professional guidance in addition to the guidance provided already by the Financial Services Authority in SUP18 ‘Transfers of business’.

It is considered that this new guidance will encourage a consistent approach and high professional standards among general insurance actuaries acting as independent experts, and should therefore be beneficial to policyholders who are affected by such transfers of business.

If you have any comments on this EXD53 please send them by 31 December 2004 to Peter Stirling, secretary, Professional Standards and Guidance Committee of the General Insurance Board, at Staple Inn. It would be helpful if you could co-ordinate comments in the usual manner with colleagues in your organisation.

If significant comments are forthcoming, or a significant demand is evident, we will be pleased to arrange for consultation meetings to be held to discuss this proposed new guidance.

If you require a printed copy of the exposure draft, please contact Peter Stirling (tel 020-7632 2177, fax 020-7632 2131, email peters@actuaries.org.uk).

Amendment to GN20 Actuarial Reporting under the Lloyd’s Valuation of Liabilities Rules

Lloyd’s signing actuaries will be aware that Lloyd’s wishes to remove the requirement for an Opinion on Canadian dollar business. This was advised in the corporation’s recent market bulletin as follows: ‘SR16 – Solvency Reserves: Reserves established in respect of Canadian dollar-denominated business are no longer subject to a separate actuarial opinion. A breakdown of the reserves by currency including Canadian dollars will still be required.’

The appropriate technical amendment to GN20 will be made removing reference to Canadian dollar business from both the guidance notes and the appendix 1 (Opinion on Solvency Reserves).