Activities of CIA TF on IAA Insurance Standards

1. Activities of CIA TF on IAA Insurance Standards Lesley Thomson

2. Activities of CIA TF on IAA Insurance Standards • Lesley Thomson, David Congram, Jim Christie, Helmut Engels, Steve Prince, Paul Della Penna, Bob Wilson, Dale Mathews, Claudette Cantin (Mo Chambers and Paul McCrossan observers) • Provide input to IAA Exposure Drafts of practice guidelines for insurance • Enormous effort • All must read them all to understand entire context • Is the guidance clear? Complete? Appropriate for products written by Canadians? • Are there conflicts? Anomalies? • Implementation concerns?

3. Activities of CIA TF on IAA Insurance Standards • Recommend how to fit IAA standards into CIA standards • IAA’s subsidiarity principle means CIA must enforce standards on our members • Phase 1 affects FCIAs working in branches/subs of European companies and FCIAs working abroad • So we need to figure out something soon • When (if?) CICA adopts IFRS (or a modification thereof) as Canadian GAAP, big changes will be needed • Need to make sure approach we take in short term will work for long term • Need to co-ordinate with other practice areas

4. Issues with Fitting IAA Standards into CIA Standards • CSOP is “better” • Don’t want to weaken our standards • But also don’t want to conflict with IAA (consistency is the whole point of globalization) • Jurisdiction concerns • CSOP only applies to work in Canada • if guidance (outside Canada) is inadequate, CSOP may provide useful guidance, taking account of laws/customs • Should we impose our standards on FCIA’s outside Canada? • Countries with standards vs. without • IAA members vs. non-members • An FCIA “brand” may be desirable

5. Issues with Fitting IAA Standards into CIA Standards • Conflicts • Must avoid putting actuaries in position of needing to comply with more than one set of standards • Some belong to more than one actuarial organization • Other countries may have standards that conflict with CSOP • Clarity/communication • Actuaries need to know what is expected of them • Will be more situations where jurisdiction and requirements are uncertain (“international” work) • Practical concerns • Changes to rules and standards take time

6. Alternative #1 – Status Quo CSOP applies only to work in Canada + may provide useful guidance outside Canada • Advantages • Simpler – no significant changes to Bylaws, Rules, or CSOP • No possibility of conflicting standards • Respects “when in Rome” principle • Disadvantages • Will be more situations where jurisdiction and requirements are uncertain (“international” work) • Perceived as less supportive of IAA’s goals

7. Alternative #2 – Expand Scope of CSOP CSOP applies to work in Canada and “international” work unless that work is pursuant to legal or regulatory requirements of another country • Advantages • FCIA “brand” - CSOP applies wherever the FCIA works • More fully supports IAA’s goals • Disadvantages • Potential for FCIA to be subject to conflicting standards • Imposes our standards on other countries – arrogant • Might put FCIA’s at commercial disadvantage • Requires significant changes to By-laws, Rules and CSOP