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Axe hangs over appointed actuaries in FSA WP review

The life office role of appoin-ted actuary could soon be scrapped as part of proposals in the FSA&#39s review into with-profits.

In the FSA&#39s fifth and final paper on with profits, it proposes appointing policyholders to life office boards and creating a with-profits fund committee.

The paper, entitled Gov-ernance of With-Profits Funds and the Future Role of the Appointed Actuary, questions the role of the appointed actuary, saying it may already be covered by the FSA&#39s business principles which life off-ice boards must abide by.

Other less radical suggestions include barring actuaries from a senior management positions, having an external review of their work or compelling them to produce an annual financial report for their boards.

The FSA says having policyholders on boards would give direct visibility to their interests but it concedes this is unlikely as the industry believes this would not be a workable solution.

It also says the fund committee would be similar to the role played by trustees in collective investment sch-emes in monitoring the use of discretion by the life office.

FSA managing director John Tiner says: “The role of the appointed actuary is an unusual one in that specific regulatory responsibilities are placed on the holder of the role rather than on the firm as a whole.”

Scottish Equitable business development manager Steven Cameron says: “With-profits life offices would not be very keen to have policyholders on their boards. The board is there to look after the interests of all groups, shareholders, policyholders and employees.”

Scottish Mutual pensions development director Leslie Gray says: “The option that the actuarial profession favours and the one that I think we will probably end up with is having a peer review of the work that appointed actuaries do.”

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