Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • February 2017
02

Paper thin

Open-access content Monday 6th February 2017 — updated 5.50pm, Wednesday 29th April 2020

I would like to comment on actuarial research papers on policyholder reasonable expectation (PRE). Actuaries have been taking an unduly narrow understanding of the issues of fairness


I would like to comment on actuarial research papers on policyholder reasonable expectation (PRE). Actuaries have been taking an unduly narrow understanding of the issues of fairness.

It is not just a case of whether or not PRE is the same as treating customers fairly (TCF), or achieving fairness in bonus systems between cohorts of policyholders, or fairness between policyholders and shareholders.

Even other tramlines such as Life Assurance and Unit Trust Regulatory Organisation (Lautro) rules and the FCA's Conduct of Business Sourcebook (COBS) rules are important but, not so to speak, the last word, as life offices are also bound by the law of the land. I refer, for example, to the case of O'Hare v Coutts. The judge said COBS added very little to what is already in common law.

In particular, actuaries take cognisance of contractual benefits but interpret this concept in a malevolently inadequate way. When actuaries talk about contractual benefits, what they really mean could be termed 'policy document' benefits. In fact, contractual benefits are much wider, including oral promises or collateral guarantees. The actual liability to the life office can be more than what is in the policy document, as a contract can be part spoken and part written - for example, where a company rep promises that a specified target amount will be achieved. 

Barrister Adam Samuel is the leading light in this area. His book on financial services gives examples of contracts that are part oral and part written.

Anthony Pepper

18 January 2017

This article appeared in our February 2017 issue of The Actuary .
Click here to view this issue

You may also be interested in...

Spreading the word

Spreading the word - Colin Wilson
Monday 6th February 2017
Open-access content

Don't be afraid to give advice

Recently I read a wonderful book called Being Mortal by Atul Gawande, a US doctor of Indian origin. It is extremely well written. What struck me particularly was how the issues facing the medical profession are not dissimilar to those facing the actuarial profession.
Monday 6th February 2017
Open-access content

Horizon scanning

In light of political and technology changes, Richard Purcell outlines the challenges and opportunities for the profession in the coming year
Monday 6th February 2017
Open-access content
2

Meaningful measures of pension scheme strength

Chris O’Brien says actuaries should seek more relevant ways to measure the financial strength of pension schemes
Tuesday 7th February 2017
Open-access content

Actuarial altruism

On 18 October 2016, 11 members of staff at APR raised thousands of pounds for the charities of their choice without baking any cakes or running any marathons.
Tuesday 7th February 2017
Open-access content

Irish students celebrate the season

The 2016/2017 committee of the Student Society of Actuaries in Ireland held their first event on 1 December, where members were invited to come along to Christmas drinks, which took place in The Jar.
Tuesday 7th February 2017
Open-access content

Latest from February 2017

2

Global banks at risk from 'rising tide' of regulation after being fined $321bn since financial crisis

Banks worldwide must create more efficient and effective processes if they hope to survive increasing regulatory requirements, according to a report by The Boston Consulting Group (BCG).
Friday 3rd March 2017
Open-access content
2

Optimism rising for London's economy but infrastructure improvement is vital

London firms feel more positive about the economy than just after the EU referendum, but believe improving the capital’s infrastructure is key, according to the Confederation of British Industry (CBI).
Wednesday 1st March 2017
Open-access content
2

Financial Services Industry most concerned about digital disruption

It has been found that 78% of financial services firms are worried about the impact digital disruption could have on their organisation, making it the most concerned industry in the UK.
Wednesday 1st March 2017
Open-access content

Latest from no_opening_image

TPR publishes coronavirus guidance

The Pensions Regulator (TPR) has published guidance to help UK pension trustees, employers and administrators deal with the financial and regulatory risks posed by coronavirus.
Monday 23rd March 2020
Open-access content
web_p24_cat-and-fish_iStock-483454069.png

Sensitivity analysis: swimming lessons

Silvana Pesenti, Alberto Bettini, Pietro Millossovich and Andreas Tsanakas present their alternative approach to sensitivity analysis
Wednesday 4th March 2020
Open-access content
ta

IFoA adjudication panel: Mr Jack Wicks, student

On 30 October 2019 the Adjudication Panel considered an allegation of misconduct against Mr Jack Wicks (the respondent).
Friday 28th February 2020
Open-access content

Latest from missing_standfirst

news in brief

March news in brief

Paper: A Cashless Society in 2019 Cash is under pressure. A tense 2018 led to a tumultuous 2019: Facebook's announcement of plans to launch its Libra cryptocurrency with a consortium of companies united all regulators against the project.
Friday 28th February 2020
Open-access content
2

Forging new paths

The Terminator is coming!  At least that's one potential vision of the future, invoked by Boris Johnson at the UN last year while he speculated about artificial intelligence (AI). We can certainly debate how realistic that vision is, and what the possible timescales might be.
Friday 28th February 2020
Open-access content
2

Expert advice

This edition of the magazine focuses on data science and its applications, which will be a recurring theme for the IFoA.
Friday 28th February 2020
Open-access content

Latest from 02

2

Share and share alike

Damian Sivajoti reports on his experience of shared parental leave and how it can help propel gender diversity within the profession
Wednesday 8th February 2017
Open-access content
2

Engaged tone

Derek Cribb takes stock of the profession’s successes in 2016 and outlines the plans for the year ahead
Monday 6th February 2017
Open-access content
2

Expert witnesses

In line with his presidential theme of ‘thought leadership’, Colin Wilson describes the rise of the IFoA’s public profile
Monday 6th February 2017
Open-access content
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Reinsurance Pricing, Bermuda - World-leading Reinsurer

Bermuda (BM)
Outstanding package in a low tax environment
Reference
148937

Senior P&C Consultant (Non-life) – Bermuda Consultancy

Up to $130,000
Reference
148925

P&C Manager (Non-life) - Cayman Islands

Up to $190,000
Reference
148924
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ