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PROFESSIONAL LIABILITY INSURANCE FOR CIA MEMBERS

PROFESSIONAL LIABILITY INSURANCE FOR CIA MEMBERS. ANNUAL GENERAL MEETING Ottawa - June 29, 2006 Presented by H. Wayne Woods. CIA’s 1 st GUIDING PRINCIPLE.

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PROFESSIONAL LIABILITY INSURANCE FOR CIA MEMBERS

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  1. PROFESSIONAL LIABILITY INSURANCE FOR CIA MEMBERS ANNUAL GENERAL MEETING Ottawa - June 29, 2006 Presented by H. Wayne Woods

  2. CIA’s 1st GUIDING PRINCIPLE “In carrying on its activities and programs, the Institute holds the duty of the profession to the public above the needs of the profession and its members.” Does the Institute have a duty to make sure its Members have adequate Professional Liability Insurance?

  3. BACKGROUND • Most actuaries are covered by their Employer (Large insurance, consulting firms and government) • Individual practitioners and small actuarial firms: • have difficulties obtaining insurance • high premiums • Limits are not adequate (i.e. $1 million) • Pension and actuarial evidence practices most affected • Emerging practice areas have no coverage - future

  4. PROFESSIONAL LIABILITY INSURANCE • Negligent acts • Errors or omissions • Defense legal costs • Not! - Directors and Officers Insurance

  5. PROFESSIONAL LIABILITY INSURANCE • Covers actions in the Policy year only • Needed when actuary leaves an employer • Needed after actuary retires • No universal coverage like in other professions (e.g. lawyers and accountants)

  6. Task Force • MSC formed Task Force to asses the need for a Professional Liability Program • Initial TF recommended that the Institute commission a broker to provide insurance on a mandatory/voluntary bases • MSC set up a second TF to send out an RFP and recommend a Broker – Morris & Mackenzie choosen • MSC later set up the Professional Liability Insurance Advisory Committee (PLIAC) to work with Morris Mackenzie to implement the program -Voluntary • Members include • Joe Nunes (chairperson) • Andre Racine • Daniel Lapointe, Executive Director • Wayne Woods

  7. Process in Choosing a Broker • Identify potential brokers – 6 chosen • Criteria: • Nation wide presence • Bilingual • Coverage of insurance company markets • Short list of 3 chosen • Interviews in Ottawa on February 07, 2006 • Clarification on some points with subsequent submissions • Report submitted to MSC and appointment of Morris Mackenzie on March 21, 2006 • Meeting in Montreal with Morris Mackenzie on April 26, 2006 to work on Action Plan

  8. OTHER ISSUES • Should the Institute have mandatory or voluntary program? – Voluntary to start. • Coverage after retirement – what happens? • Responsibility to our Publics – Should actuaries have Professional Liability Insurance?

  9. PROCESS • Information on CIA • Standards • Disciplinary process (CPC) • Make up of membership (large/small firms) • Practice areas • Telephone survey of membership & larger actuarial firms – in progress • Identifying Insurance Company(s) • Solicitation • Effective Date – January 01, 2007?

  10. NEXT STEPS • Presentation to members at June meeting • Feedback from Members and Firms • Discussion with insurers during July & August • Preliminary plan design in September • Approval of Program in Fall 2006 • Roll-out to Members in Q4 2006

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