FINMA Circular 17/4 Responsible Actuary

Laupenstrasse 27, 3003 Bern Tel. +41 (0)31 327 91 00, Fax +41 (0)31 327 91 01 www.finma.ch Circular 17/4 Responsible Actuary Requirements for the Responsible Actuary Reference: FINMA-Circular 17/4 "Responsible Actuary" Issued: 7 December 2016 Entry into force: 1 January 2017 Concordance: formerly FINMA-Circular 08/16 "Responsible Actuary" of 20 November 2008 Legal Basis: FINMA Act Art. 7 para. 1 lit. b Insurance Supervision Act (VAG) Art. 23, 24 Supervision Ordinance (AVO) Art. 99 Supervision Ordinance-FINMA (AVO-FINMA) Art. 2–4

Addressees BankG VAG FINIG FinfraG KAG GwG Others Banks Financial Groups and Conglomerates Other Intermediaries Insurers Insurance Groups and Conglomerates Intermediaries Asset Managers Trustees Managers of Collective Investment Schemes Fund Management Custodian Securities Firms Non-Custodian Securities Firms Trading Platforms Central Counterparties Central Securities Depositories Transaction Registers Payment Systems Participants SICAV KmG for Collective Capital Investments SICAF Custodian Banks Representatives of Foreign Collective Capital Investments Other Intermediaries Self-Regulatory Organizations (SRO) SRO-Supervised Audit Firms Rating Agencies X

2/3 FINMA issues this circular pursuant to Art. 2–4 of the Insurance Supervision Ordinance-FINMA (AVO-FINMA, SR 961.011.1), Art. 99 of the Supervision Ordinance (AVO; SR 961.011) as well as Art. 23 and 24 of the Insurance Supervision Act (VAG; SR 961.01). 1 The actuary title of a fully qualified actuary (fully qualified member, Full Member) of a foreign actuary association, which sets requirements equivalent to those of the Swiss Actuarial Association (SAV), is considered equivalent pursuant to Art. 99 para. 1 AVO. 2 The lists of foreign actuary associations that grant such titles can be viewed at: • Europe: actuary.eu > about-the-aae > member-associations • Overseas: www.actuaries.org > about the IAA > Membership 3 Familiarity with Swiss conditions pursuant to Art. 99 para. 3 AVO generally requires that the person has exercised a broad actuarial activity in the sectors operated by the insurance company in Switzerland during at least the last three years. Persons who do not meet this condition must demonstrate that they possess equivalent knowledge corresponding to their area of responsibility. 4 Pursuant to Art. 23 para. 2 and Art. 24 para. 1 VAG, the responsible actuary must be able to correctly assess the financial consequences of the insurance company's activities. This requires in particular in-depth knowledge of reserves and insurance risks (underwriting and reserve risks) as well as a comprehensive understanding of financial risks (market and credit risks), scenarios and their aggregation, notably in connection with the Solvency Test (SST). The responsible actuary must be able to assess reserves and insurance risks in the overall context of corporate risks and understand their impact on solvency. 5 The notification regarding the appointment of the responsible actuary must state the relationship with the insurance company. In particular, conflicts of interest must be disclosed to FINMA. 6 The organizational integration of the responsible actuary within the insurance company must be demonstrated. It must be appropriate and ensure the fulfillment of the responsible actuary's duties. 7 The information regarding the termination of the cooperation relationship pursuant to Art. 4 AVO-FINMA must include a description of the reasons for separation, resignation, or dismissal. All aspects relevant for supervision must be mentioned. 8

3/3 A deputy must be appointed for the responsible actuary. The actuarial knowledge of the deputy must ensure an orderly transition until the definitive appointment of the new responsible actuary. 9 Proposed persons for the function of responsible actuary must be available to FINMA for an interview during the approval procedure. 10