Current situation of the actuarial profession and actuarial education in the Republic of Macedonia

1. Sixth International Professional Meeting of Leaders of the Actuarial Profession and Actuarial Educators in Central and Eastern EuropeBUILDING A GLOBAL ACTUARIAL PROFESSION22 - 24 April 2004, Dubrovnik, Croatia Current situation of the actuarial profession and actuarial education in the Republic of Macedonia Biljana Petroska

2. Facts on Macedonia (1998-2002) Sources: State Statistical Office and Ministry of Finance

3. Facts on Macedonia (1998-2002) Sources: State Statistical Office and Ministry of Finance

4. Actuarial profession in Macedonia • 2 actuaries with Actuarial Diploma from former SFR Yugoslavia (1 certified actuary working in Insurance Company). • Several people working on actuarial positions, analysis and research (Insurance Companies, Ministry of Finance, Pension and Disability Insurance Fund of Macedonia, Agency for Supervision of Fully-Funded Pension Insurance, Faculty) • 2002 - Mr. Chris Daykin and Mr. Graham Luffrum engaged by the Ministry of Finance to conduct Assessment of actuarial profession and to develop a concept for accelerated and efficient actuarial training

5. Insurance Market in the Republic of Macedonia • 7 Insurance Companies operate on the insurance market in the Republic of Macedonia: • 6 with license for performing non-life insurance; • 1 with license for performing life insurance, non- life insurance and re-insurance • Attracting foreign capital and competitiveness increase expected as a result of the liberalization of the insurance market.

6. Macedonian Insurance in the Period 1998-2002 Sources: State Statistical Office and Ministry of Finance

8. Insurance Supervision Division • Earlier - no special unit responsible for control over the insurance companies; control comprised of submission of financial statements by the companies. • July 2000 - Insurance Supervision Division established in the Ministry of Finance. • More efficient supervision: on-site and off-site supervision, preparation of legislation, licensing insurance companies and insurance brokerage companies, licensing insurance brokers and actuaries etc.

9. Law on Insurance Supervision • Law adopted in April 2002 • Additional bylaws adopted in 2002: -Rulebook on the conditions for implementation of professional exam for acquiring license for certified actuary; -Decree on the chart of accounts of insurance companies; -Rulebook on amendments to the Rulebook on the form and contents of balance sheets of insurance and reinsurance companies; -Rulebook on the manner of implementation of exam for insurance broker.

10. Law on Insurance Supervision • Actuarial activities shall be performed by certified actuaries. • The Ministry of Finance shall authorize a body or legal entities that shall issue certificates for certified actuary. • Certified actuaries must meet the following requirements: • high education (University degree) • no criminal record in area of commercial or property law • the applicant has passed a professional examination which tests the expertise required to perform the tasks of certified actuary • min 3 years of experience in the insurance industry or insurance supervision

11. Law on Insurance Supervision • Tasks of certified actuary: • Verify whether data in annual accounts are consistent with insurance accounting standards • Examine whether premiums and technical provisions are calculated accordint to the law and to assure long-term meeting of all obligations • Issue certificate regarding previous activities and provide oppinion on annual reprot and report on the findinds of the certified actuary

12. Pension reform Ongoing transition from PAYG mono-pillar system towards multi-pillar pension system • 1995 Government commitment for the reform (World Bank assistance throughout the process) oPension Steering Committee established oActuarial Unit established in the public Pension and Disability Insurance Fund of Macedonia • 2000 Parametric changes of the PAYG system and framework for multi-pillar system adopted • 2002 Law on Fully Funded Pension Insurance adopted • 2002 Agency for Supervision of Fully-Funded Pension Insurance established • 2005 Actual split up of contributions for first and second pillar should start

13. Role of the Actuarial Unit in the Pension Reform • The Unit has capacity to prepare long term projections of the pension system developments, taken into consideration demography and economy, under different assumptions for the policy of pensions. • With the assistance of foreign actuarial consultants, the Unit has develop actuarial models for short-term and long-term for the public sector and for fully funded second pillar in the pension system. • The Unit had continuous on-job training and study tours on the basics of actuarial methods and techniques in life-insurance and pension schemes and model development. • Results of the scenarios important for decision making process in the pension reform.

14. Future tendencies in Insurance area • Future development of insurance industry in general • Ongoing pension reform • Reform of health insurance • Need for actuaries expected to increase in near future (in the following 5 years 30-50 licensed actuaries - Assessment of actuarial profession 2002 - Chris Daykin, Graham Luffrum)

15. Actuarial education • Non-existence of actuarial studies (graduate, post graduate) • Ministry of Finance in cooperation with FSVC set the program for Basic and Advanced course for actuarial mathematic and insurance, consisting of total 16 modules, under recommendation of IAA for qualification of education of actuaries with lecturers from Croatia and Macedonia • Basic Course (2002) - 9 participants succefully finished • Advanced Course (2003/2004) - 9 participants currently attend

16. Actuarial education Basic course Module 1 Introduction into Actuarial Mathematics Module 2 Statistics and Probability Module 3 Mathematics for Life Insurance Module 4 Mathematics for Non-Life Insurance Module 5 Financial markets and Investment Module 6 Social Security and Pension Funds Module 7 Principles and practice of Life Insurance Module 8 Principles and practice of Non-Life Insurance

17. Actuarial education Advanced course Module 1 Demography Module 2 Advanced Actuarial Mathematics Module 3 Investment and Asset/Liability Management Module 4 Actuarial Management of Life Insurance Module 5 Actuarial Management of Non-Life Insurance Module 6 Actuarial Management of Health Insurance and Health Care Financing Module 7 Principles of Accounting in Macedonia Module 8 Principles of Law in Macedonia

18. Actuarial association • April 2004 – Macedonian Actuarial Association established (aktuar@mail.net.mk) • 11 members • Mr. Simeon Gacovski – Chairman of the Association • Main objectives of the Association: • To follow developments of scientific actuarial disciplines • To assist members for the active participation in this development • To study and enhance practical implementation of actuarial discipline • To cooperate with educational institutions and international associations • To enhance actuarial and professional education of actuaries

19. Actuarial association • Membership criteria • Regular member – an individual who scientifically or in practice deals with actuarial profession or person interested to follow the actuarial practice. • Bodies of the Association • Assembly • Executive Board – 5 members (Chairman, Vise-chairman, Secretary, Cashier, and one member) • Supervisory Board – 3 members • Chairman of the Association

20. Next steps • Intensify activities of Macedonian Actuarial Association to promote actuarial profession, role of the actuaries, actuarial training • Establish a library in the Macedonian Actuarial Association • Cooperation with international Actuarial Associations • Application for participation at IAA Training of trainers program • Discuss possibility for next training cycle and/or postgraduate studies at one of Macedonian Faculties