APN 106 PZ Flashcards
To whom does this Advisory Practice Note (APN) apply?
This APN applies to the Head of Actuarial Function, as well as Actuaries who support or review this function or who act in a similar capacity. Additionally, Actuaries responsible for the underlying work on which the Head of Actuarial Function relies should duly consider this practice note.
What are the two main parts of the Head of Actuarial Function’s role?
The Head of Actuarial Function’s role can be considered in two parts: oversight/review and reporting.
Who is expected to perform the reporting function, particularly when providing opinions or advice to the Board?
The duly appointed Head of Actuarial Function is expected to perform the reporting function, especially when providing opinions or advice to the Board.
What level of independence should the Head of Actuarial Function maintain?
The Head of Actuarial Function should be sufficiently independent from the activities associated with the underlying actuarial roles to appropriately perform their responsibilities of oversight and review.
Does this APN apply to both life and non-life insurers?
Yes, this APN covers both life and non-life Insurers. However, some points may be more or less relevant to one or the other, and distinctions are drawn in a limited number of cases. The Head of Actuarial Function should use their professional judgement to decide on relevance and the level of attention required.
What are the two categories of responsibilities addressed in this section?
This section addresses both statutory duties arising in terms of the Act, as well as professional responsibilities which stem from ASSA.
Where are the statutory duties relevant to the Head of Actuarial Function set out?
Requirements relevant to the Head of Actuarial Function’s statutory duties are set out in the Prudential Standards under the Act.
What should the Head of Actuarial Function do if the APN does not provide guidance corresponding to the Act?
Where no guidance corresponding to the Act is provided in this APN, the Head of Actuarial Function is expected to apply their own professional judgement, or to discuss with the Prudential Authority or an appropriate senior Actuary.
Where can the Head of Actuarial Function find information regarding their professional responsibilities?
The Head of Actuarial Function is reminded of their responsibilities under ASSA’s Code of Professional Conduct.
To whom is a Head of Actuarial Function strongly advised to seek help if they are doubtful about the proper course of action for a potentially significant problem?
A Head of Actuarial Function who becomes doubtful as to the proper course of action in relation to a potentially significant problem is strongly advised to seek help and advice through the President or President-Elect of ASSA, or the Prudential Authority or the Financial Sector Conduct Authority as the case may be.
What steps should the Head of Actuarial Function take to ensure appropriate interaction with the Insurer’s governance structures?
The Head of Actuarial Function should take reasonable steps to ensure access to the Board, the Audit Committee and other relevant committees at appropriate times. They should also request copies of Board minutes and relevant tabled documents and take reasonable steps to attend any meeting where their own report is discussed.
What should the Head of Actuarial Function ensure the Board understands about the advice they provide?
The Head of Actuarial Function should take all reasonable steps to ensure that the Board understands when they are providing advice in accordance with statute (including Prudential Standards and regulations) or actuarial professional guidance, as opposed to providing advice or expressing opinion in another capacity such as an employee, director or external adviser.
What should the Head of Actuarial Function pay due regard to as generally accepted actuarial best practice?
The Head of Actuarial Function should pay due regard to generally accepted actuarial best practice including SAPs and APNs issued by ASSA. They should also consider whether there are any other practices that may be considered as generally accepted actuarial best practice.
Under what circumstances can the Head of Actuarial Function place reliance on the work of others, and what must they do in such cases?
Where necessary and appropriate (for example assessing adequacy and effectiveness of controls, or maintaining risk registers), the Head of Actuarial Function may place reliance on the work of other Control Functions or on appropriate third party providers. The Head of Actuarial Function should clearly disclose when and where such reliances have been placed.
What is the requirement for the Head of Actuarial Function regarding reporting to the Board?
The Head of Actuarial Function must provide regular reports on any opinions and advice to the Board.
What are the options for the format and frequency of these reports?
Such reporting can be a single overall report or made up of individual component reports completed at suitable points in the Head of Actuarial Function’s work cycle. The report should be produced at least annually or more frequently as the Board requires. Components of the annual report may also be produced as and when required.
