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APS X1 Applying standards to actuarial work Consultation Meeting – 23 June 2014

APS X1 Applying standards to actuarial work Consultation Meeting – 23 June 2014. Introduction. Background Overview of the proposals Next steps Questions and comments. Background.

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APS X1 Applying standards to actuarial work Consultation Meeting – 23 June 2014

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  1. APS X1Applying standards to actuarial workConsultation Meeting – 23 June 2014

  2. Introduction • Background • Overview of the proposals • Next steps • Questions and comments

  3. Background • Proposal to introduce a cross practice APS that allows members to determine which standards they should apply to a particular piece of work • Recognises that the IFoA is an international organisation with members carrying out work around the world • Reflects the Equivalence Principle as set out in the IFoA’s Regulatory Strategy • Recognises the IFoA’s commitments in terms of international standards, particularly ISAP 1

  4. ISAP 1 • IAA model standard with ethical and technical content • IFoA, as a member body of the IAA, is asked to consider adopting ISAP 1, endorse it, modify existing standards to obtain substantial consistency with it or confirm that existing standards are already substantially consistent. • IFoA and FRC propose to announce steps being taken to ensure substantial consistency of the UK standards framework with ISAP 1 • Proposal for APS X1 endorses and implements ISAP 1 in terms of members outside the scope of the TASs

  5. Requirements of APS X1 • Sets out a structure within which members can determine the standards to apply to a particular piece of work • Aims to be principles based where possible • Applies to all members regardless of location or practice area (including partially-regulated members) • Builds on the non-mandatory Standards Decision Tree

  6. Requirements of APS X1 • A general requirement for all members to comply with legal requirements, the Actuaries’ Code and APSs (section 1) • Members carrying out work within ‘UK Geographic scope’ (i.e. within the geographic scope of the TASs) must apply TASs, where relevant, to that work (section 2) • Specific provisions for members carrying out work outside UK Geographic Scope (section 3)

  7. Section 3 Requirements • Apply to members carrying out work outside ‘UK Geographic Scope’ (i.e. outside the geographic scope of the TASs) • Should carry out work in a way that complies with ISAP 1 • Can be met by applying Recognised Standards which when taken together achieve substantial consistency with ISAP 1 (para 3.3) • Can be satisfied by applying ISAP 1 itself • Can be satisfied by applying the UK standards framework • Can be satisfied by applying any other combination of standards as long as they provide, as a minimum, substantial consistency with ISAP 1

  8. Section 3 Requirements Additionally: • Should apply a ‘Recognised Standard’ which is: • (i) directly applicable; or (ii) relevant in respect of both geography and subject matter and would be applicable if the member were subject to the jurisdiction of the Relevant Authority that imposed the Recognised Standard AND • not inconsistent with ISAP 1 • Where there is inconsistency between Recognised Standards, members must exercise judgement in determining which to apply

  9. Section 3 Requirements • May treat a Recognised Standard as being an alternative to all or part of an APS if it is ‘substantively similar’ • Should exercise reasonable judgement to consider whether there are other relevant standards that they ought to apply • Should have regard to all the circumstances when exercising this judgement • Particular factors to take into account

  10. Requirements of APS X1 • Must be open with Users as to the standards applied to their work (paragraph 4.1) • If necessary to avoid possible misunderstanding, should set out in writing the standards that have or have not been applied • Must be able to justify the standards applied or not applied to their work, if reasonably called upon to do so

  11. Accompanying Guide • Proposal to have a supplementary Guide to accompany the APS • Provides more detailed practical guidance on the application of the APS, including a range of different case studies and worked examples • Also incorporates an updated version of the Standards Decision Tree to reflect the new requirements

  12. Next steps • Consultation open for responses until 21 August 2014 • Paper summarising the responses expected to be produced in late Autumn 2014 • If proposals supported and are to proceed, sufficient time for transition and application will be provided for

  13. Any Questions?

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