New FRC board tasked with setting actuarial standards
Morris review recommends new insurance risk regime
The Financial Reporting Council is to add another string to its bow with the
inclusion of a board that will look at standards in insurance risk and premiums,
but the accounting profession will be spared having to fund it.
As part of Sir Derek Morris’s review of the actuarial profession, it has been
recommended that the FRC should be responsible for overseeing it and setting its
standards. The watchdog has now confirmed that it is to add to its current
five-strong boards, with the sixth tasked with setting actuarial standards.
However, it is not expected that the accountancy profession, which currently
pays a third of the FRC’s running costs, will have to pay more to cover the
recommendations.
Details of how the board will be funded will be published for consultation
next month, but its running costs, expected to be around £2m a year, should come
from contributions from the actuarial profession, insurance companies and
pension funds.
‘We intend that our approach to our new responsibilities will mirror our
market-led and consultative approach to out existing responsibilities,’ said FRC
chief executive Paul Boyle. ‘There will be a consultation to ensure that those
affected by the new regime have the opportunity to comment on the way it will be
funded.’
In addition to the new board, other parts of the FRC will also have extended
responsibilities. The Professional Oversight Board for Accountancy will be
expanded to cover the actuarial profession, while the Accountancy Investigation
and Discipline Board will be able to take on public interest cases involving
actuaries.
The board is currently looking to recruit a new team to establish its
actuarial responsibilities, with the new regime expected to commence in April
2006, just two years after it took on POBA, the AIDB and the APB.
The FRC this week appointed DTI fair markets director general John Alty to
the board.
