September 11, 2012 by Canadian Underwriter
Canada’s federal financial services regulator released its final set of guidelines related to legal requirements, qualifications and peer review for appointed actuaries.
Guideline E-15, first issued in 2003, governs, among other things, the process of external peer review, which the Office of the Superintendent of Financial Institutions (OSFI) says has “generally been accepted over the last eight years by insurance companies, appointed actuaries and the actuarial profession. However, it is OSFI’s opinion that the peer review process can be enhanced to better assist OSFI with its review of insurance companies.”
A peer review involves an external analysis of an appointed actuary’s work that affects the financial statements and the assessment of an insurance company’s financial condition. OSFI notes that there were some “prime areas for improvement” in peer review, including the need for annual reporting on material changes in methodology and assumptions, enhanced financial condition reporting (DCAT) and a tighter focus on the work that involves financial statements and conditions.
“The revised Guideline E-15 addresses (these) issues by amending the requirements of the review processes,” OSFI states. “At the same time, the requirement for review will no longer apply to the work regularly done by appointed actuaries that does not affect the financial statements or that does not relate to future financial condition work.”