On 1 July, the IFoA's new requirements in relation to work review will come into force for all members.
The new Actuarial Profession Standard (APS) X2: Review of Actuarial Work is a truly cross-practice standard and will apply to all members responsible for actuarial work, regardless of where that work is being carried out or the member's geographic location.
The IFoA has also produced guidance to help members understand the APS and how to apply the requirements.
The APS requires members to:
l Consider whether to apply work review to actuarial work for which they are responsible; and
l Give particular consideration to whether it would be appropriate and proportionate for such work review to be in the form of independent peer review.
Where it is deemed appropriate and proportionate to apply work review and/or independent peer review to the actuarial work, members should apply that review to the work. APS X2 therefore introduces a presumption that it will be applied in those circumstances. Members must exercise their professional judgement in determining the most appropriate and proportionate form of review to apply in the particular circumstances.
The APS sets out a range of different factors to take into account when making that judgement.
The term 'work review' has a wide definition and is intended to cover a broad spectrum of different types of processes that involve having work considered by at least one other individual.
'Independent peer review' is a particular type of work review that involves the review being undertaken by someone not otherwise involved in the work in question (someone 'independent') and who would have had the appropriate experience and expertise to take responsibility for the work themselves (a 'peer').
'Actuarial work', in this context, is also broadly defined.
Members must ensure that they are in a position to justify the approach which they have taken to the application of work review, if reasonably called upon to do so. The APS is not prescriptive in terms of how members meet this requirement and does not specifically require record
keeping, although this may be good practice in certain cases.
APS X2 also includes certain requirements about the work review itself, including a requirement to ensure that everybody involved has appropriate experience and expertise and that they have a clear understanding of their role.
Work review must also be undertaken at a time such as to be capable of influencing the conclusions and output of the work.
Withdrawal of APS P2
The existing APS P2, which imposes requirements in relation to compliance review for certain reserved scheme actuary work, will be withdrawn on 1 July.
The shift for scheme actuaries will therefore be from a rules-based requirement for simple compliance review to a principles-based requirement.
This is intended to ensure that good-quality, proportionate review processes will be applied where appropriate.
Specific guidance for scheme actuaries on the transition from APS P2 to APS X2 is available.
For further information, contact the IFoA's regulation team at [email protected]