The UK Government today (May 31 2022) released its response to the consultation on the 2021 White Paper Restoring trust in audit and corporate governance which set out proposals for the future of actuarial regulation. Matt Saker, President-elect at the Institute and Faculty of Actuaries (IFoA), said:
“We welcome the decision to have the newly established Audit, Reporting and Governance Authority (ARGA) oversee and regulate the actuarial profession, focused primarily on individuals, by reference to a clearly defined list of public interest actuarial activities. The Government has listened to our concerns and agreed it would be contrary to the public interest to deter membership of the IFoA, or the employment of IFoA members in both traditional and emerging areas of actuarial work, by regulating only the work of our members. It is also helpful the Government has confirmed the current division of responsibilities between ARGA and the IFoA will be retained, albeit on a statutory footing.
“While welcoming the consultation response, we do have questions and concerns about the detail of the Government’s proposals, which may still lead to unintended consequences, including regulatory arbitrage, contrary to the public interest. It will be critical to define the scope of ARGA regulation clearly and carefully, focused on public interest activities, and how this regulation will be monitored and enforced, consistently and proportionately.
“There remains the real risk otherwise that some rules may still apply to members of the IFoA but not to non-members, who are undertaking the same work. We believe this could undermine the profession, lead to a lowering of standards and result in regulation spanning an ill-defined range of activities which would be difficult to monitor and enforce effectively.
“Actuaries are essential to a well-functioning financial system. The work they do on a daily basis in the public interest ensures that people receive the pensions they are entitled to, that insurance products are priced accurately for customers and that companies hold sufficient capital to pay claims to their customers.
“We look forward to continued engagement with Government on the development and implementation of its proposals, in addition to other stakeholders, to ensure their success in protecting the public interest effectively and proportionately.”
If you would like to learn more about our work on the future of UK actuarial regulation, the IFoA is hosting a workshop at the IFoA Conference on 23 June, titled: What do the UK government’s changes to actuarial regulation mean for the future of the profession’. IFoA General Counsel Ben Kemp will talk through the Government’s proposals, share the IFoA’s perspective on those plans and discuss what the changes could mean for actuaries. If you’d like to attend this event at the IFoA Conference, you can register on the conference website.