Actuaries Barnett Waddingham have called for more detail from the Central Bank of Ireland on its proposals to strengthen regulation for insurers.
In September, the CBI, which is responsible for financial regulation in the Republic of Ireland, launched a consultation that would strengthen its supervisory framework with regards to reserving and pricing for non-life insurers and reinsurers. The proposals were designed to ensure firms maintain appropriate reserves and make submission of a statement of actuarial opinion (SAO) a statutory requirement.
It also suggested that firms commission an external actuary - to be known as a reviewing actuary - to review the SAO and underlying report and comment on the methodologies, assumptions and any uncertainties.
The consultation (CP 73) closed yesterday. But speaking today, Cherry Chan, partner and head of general insurance at Barnett Waddingham, said greater clarification of the benefits gained from the addition of the reviewing actuary role was needed.
'Additionally, I would like to seek more clarification on the process around setting the risk margin and the accompanying risk margin report. If the risk margin is to be included in the SAO does this mean that the Signing Actuary is expected to take a view on the risk margin in their report accompanying the SAO?' she said.
'Otherwise how else could they sign off the SAO? Is the risk margin report anticipated to be a tool which is used by the board in setting the risk margin? Or is it designed to set out the justification for the risk margin set by the board?'
Chan also highlighted what she said was a 'minimal focus' on pricing in the bank's consultation.
'We believe if the CBI wants to ensure a company has adequate reserves and assets to pay its liabilities as they fall due, then ensuring data accuracy and reserve adequacy are important but more critically, the CBI should ensure that the pricing of risks and reinsurance are sufficient in the first place.'
In the consultation, the bank said full compliance with the new requirements was expected by the end of the financial year ending December 31 2014.