International Actuarial Association Update

 

By Chris Fievoli, FCIA

The International Actuarial Association (IAA) held its latest council and committee meetings in St. Petersburg, Russia, from May 25 to 29. In our last IAA meeting update, published in December’s (e)Bulletin, we promised to provide an update on future meetings, focusing on key topics of interest to Canadian actuaries. (Note you must log in to the members’ site to view the linked article.) This time, we will look at education issues, as well as the latest on international insurance accounting standards.

Revised International Syllabus

The IAA Education Committee has been very focused on the development of a revised international syllabus. The Syllabus Review Task Force was established in September 2014 with a mandate to recommend new education requirements and a resulting syllabus for a member to be recognized as a fully qualified actuary in a full member association of the IAA. The task force completed this mandate, and released a revised IAA minimum syllabus. The proposed syllabus expands on the 2013 version in a number of areas:

In general, the CIA has supported the adoption of the revised IAA syllabus. The IAA Education Committee has now approved the new syllabus, which it feels provides appropriate flexibility in interpretation, to aid with adaptation to local full member association circumstances.

Work will now be turned over to a new task force that will focus on governance and implementation issues. It is envisioned that, in addition to a minimum level of syllabus coverage, there will also be an aspirational level against which member associations will be able to assess themselves. The CIA will monitor these developments carefully to ensure that the CIA Education Syllabus and timeline for implementation by the CIA’s education partners, including universities, is appropriately aligned.

 

IFRS X and ISAP 4

Turning to accounting standards, International Financial Reporting Standard (IFRS X)—the proposed accounting standard that deals with insurance contracts—continues to be a key focus of attention for the Insurance Accounting Committee (IAC). This topic is getting increased focus again, given that the IAA’s International Accounting Standards Board (IASB) is now expected to release its long-awaited final standard around the end of 2016. The area attracting the most attention currently by the IAC pertains to unit of account definitions in the current draft. Indications are that these will be very granular, as opposed to taking a broad portfolio view, which has implications on assumptions, the contractual service margin (CSM), and other aspects. The IASB does not plan to revisit this topic, so this issue will need to be addressed going forward in implementation guidance.

The IAC also discussed ISAP 4, the international standard of actuarial practice governing insurance contract valuation, which is closely related to IFRS X. There is a chance that the ultimate actuarial standard will be focused on how the actuary should perform the work related to IFRS X, as opposed to providing a technical application of the accounting standard. Consequently, international actuarial notes (IANs) would need to pick up the missing technical content. 

International Actuarial Notes and Canadian Standards

As far as Canada is concerned, this may create an interesting challenge as we determine how to replace the current Actuarial Standards Board (ASB) IFRS valuation standards and supporting CIA education notes with standards and notes to support IFRS X. The current approach in Canadian standards is to include key technical guidance in the standards themselves, whereas there is a good chance that the eventual ISAP 4 will be more high level with very limited or no technical content. The ASB will need to assess how the split between the ISAP and IANs will impact their incorporation into Canadian actuarial standards (i.e., does it follow the approach of the ISAP or does it follow the past practice in Canada). It will be important for the ASB and the relevant CIA groups to stay closely engaged on this.

As an aside, the IAC Subcommittee on Education and Practice is charged with developing the aforementioned IANs. There are 11 IANs currently in the works, and the goal is to have preliminary draft documents ready for the next IAA set of meetings in Cape Town in November, with final draft versions available in June 2017 for IAA approval.

We will provide further updates on these November meetings in the (e)Bulletin later this year, focusing on a couple of other areas of interest. Once again, CIA members are encouraged to stay apprised of international developments and to consider volunteering for IRC committees and/or IAA delegate and leadership roles as opportunities arise.

Chris Fievoli, FCIA, is resident actuary with the CIA Head Office.

Canadian Institute of Actuaries/Institut canadien des actuaires
http://www.cia-ica.ca/