CIA (e)Bulletin/(e)Bulletin de l'ICA
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May 2016
 
 

Practice Council Update

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By Pierre Dionne, FCIA

This article provides updates on two recent Practice Council activities and looks at some upcoming initiatives.

The SKIs Have Landed

The SKIs were created in 2007 by the Committee on Continuing Education. Their primary purpose was to support members’ continuing professional development programs by providing a summary of skills required to perform specific duties by practice area. The SKIs also provided a very handy resources list, complete with hyperlinks, to CIA documents, accounting documents, regulatory requirements and guidelines, and legislative texts.

A year ago, a few people pointed out that the SKIs had fallen out of date, mostly with respect to the resources list, which had not been maintained. The Practice Council, through its various practice committees, undertook to review and update the SKIs. This process is not yet complete for a few areas of practice, but updated SKIs are available for pensionproperty and casualty insurance, actuarial evidence, and enterprise risk management.

 

More importantly, the Practice Council has established a process to continuously update the resources list, adding new educational notes to the list as they are published by the CIA. Practice committees, who remain current with regulatory and legislative changes, will inform the CIA staff of any updates on that front. A footnote showing the latest revision date will help ensure members are looking at the most recent document.

All practice committees agreed that the resources list is very helpful to members. Keeping this in mind, it was decided to create a dedicated landing page for the SKIs. You can also access this page by selecting the Professional Development tab, scrolling down to Continuing Professional Development, and selecting the SKIS submenu. As the missing areas are completed, they will be added to the web page. This dedicated page means members do not have to search the publications in order to find the relevant SKIs.

We trust you will find the updated SKIs easy to find, and of value in your day-to-day practice. Should you find that some important documents are missing from the resources list, do not hesitate to inform the appropriate committee, or let anyone on the Practice Council know.

The New Life Insurance Capital Adequacy Test

At the end of March 2016, the Office of the Superintendent of Financial Institutions (OSFI) released the new draft guideline on the Life Insurance Capital Adequacy Test (LICAT). The LICAT will replace the current Minimum Continuing Capital and Surplus Requirements (MCCSR) for reporting periods ending on or after January 1, 2018.

The LICAT was a long time coming, with several rounds of quantitative impact studies performed by the life insurance industry over the last several years. Throughout this process, the CIA was also involved, through the Practice Council and several of its committees.

 

Most recently, however, the Practice Council was approached by OSFI to review the draft guideline before it was even published. Even though OSFI released the confidential draft on January 15—right in the middle of the year-end reporting period for life insurers—committees of the Practice Council were hard at work, providing a response to OSFI by the targeted deadline of mid-February. By all accounts, OSFI was very satisfied with the constructive feedback, and incorporated several of the suggestions in the final version of the released draft guideline.

Following the March release, a drafting team was established from members of several committees, in order to provide official comments on behalf of the CIA. Working against a tight deadline, the team reviewed the 194-page document and provided 42 recommendations to OSFI.

Over the coming year, members can expect more communications from the Practice Council on this important topic. Guidance around performing dynamic capital adequacy testing in the transition period, and guidance on narrowing the range of practice around best estimate and provision for adverse deviations, are some of the areas the Practice Council will be addressing in the coming months.

As usual, every member of the Practice Council remains available to discuss any issues you may have, either on the above two subjects, or any other areas of actuarial practice. You can find the current list of Practice Council members, and the list of committees and members, under the Organization tab of the member-only section of the CIA website.

Pierre Dionne, FCIA, is Chair of the Practice Council.

 

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