Regulatory Alerts2018-11-29
Thematic review of the appointed actuary role
The New Zealand insurance regulator published findings in June 2020 regarding the appointed actuary role within the insurance sector. The review identified that while actuaries maintain good practices, there is a critical need for clarity on regulatory expectations and safeguards to protect the role's impartiality from senior management influence. These findings led to the publication of a policy note outlining specific expectations for insurers and appointed actuaries to strengthen risk management and policyholder security.
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Thematic reviews
In June 2020, we published our findings from our thematic review of the appointed actuary role and regime in the New Zealand insurance sector. This page provides a link to the report and what we have done in response to the review.
Published:
Last updated:
Published reports
Appointed actuary thematic review report – June 2020
PDF | 715KB
Our expectations of insurers and appointed actuaries policy note – June 2020
PDF | 170KB
About the review
Within the insurance industry, appointed actuaries have a critical legislated role as they measure and report on material risks, which can threaten an insurer's financial condition and solvency.
An appointed actuary also provides impartial advice to an insurer’s board of directors and senior management to help them make sound decisions. This support can greatly strengthen an insurer’s risk and capital management and lead to the increased security of policyholders.
The review aimed to improve our understanding of how this role works in practice for insurers, actuaries and for us as the regulator. It also aimed to identify potential areas for improvement to make the role and regime more effective.
We selected 15 out of 87 licensed insurers to participate in the thematic review.
What the review found
Appointed actuaries all had good practices in place to keep their knowledge up to date, and their financial condition reports were highly valued by insurers. Many of the appointed actuaries also had their most important work peer reviewed regularly.
Our two main findings were the need for clarity and guidance around what we expect of the appointed actuary role, and the risk that the role's impartiality could be affected adversely by factors such as the influence of senior management and reporting lines.