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Watson Wyatt attacks actuary changes

Watson Wyatt is criticising the FSA&#39s with-profits proposals, saying changes to the role of the appointed actuary weaken protection for consumers.

The firm of consulting actuaries says the FSA&#39s changes – which significantly reduce the role of the app-ointed actuary and place more responsibility in the hands of company directors – will not make for better regulation.

It is concerned that the appointed actuary&#39s role to monitor a firm&#39s financial position continuously and look out for customers is being removed rather than strengthened.

The firm is also worried about plans to pass on the responsibility to report on reserves to auditors, particularly in light of recent concerns over the effectiveness of the audit process.

Wyatt joins the Faculty and Institute of Actuaries in criticising the FSA&#39s proposals and says an independent actuarial review is needed to ensure that boards receive sound actuarial advice.

Head of insurance and financial services Nick Dumbreck says: “The proposals contain major drawbacks. The aim of ensuring that the board of directors properly address their responsibilities could have been achieved more easily through improved rules and guidance, without the need for such a radical departure from a tried and tested governance model.”

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