Response to Industry Comments - Actuary's Opinion on EBS Technical Provisions (2016-05-03)

Summary

This is a letter from the Bermuda Monetary Authority responding to industry feedback on its December 2015 consultation paper and draft Guidance Note on the Actuary's Opinion on Economic Balance Sheet (EBS) Technical Provisions. It does not introduce new rules itself but explains specific amendments the Authority made to the draft Guidance Note in response to stakeholder comments.

• Actuarial body definition: The American Academy of Actuaries (AAA) has been removed from the list of recognised actuarial bodies, and the term official actuarial body has been replaced with credentialing actuarial body.
• Material adverse deviation scope: The Guidance Note has been clarified (in Part 6 - Relevant Comment) so that material adverse deviation applies only to General Business, not Long-Term Business; headers for adverse deviation and materiality now specify General Business - Only.
• Approval of actuaries: The paragraph discussing the Authority's approach to approving one or more actuaries (particularly in a Group context), originally paragraph 31, has been renumbered to paragraph 24 and moved as suggested by stakeholders.
• Future review: The Authority states it will assess initial 2017 submissions of the Actuary's Opinion and consider whether further changes to the Guidance Note are needed.

The underlying obligation to obtain a formal Actuary's Opinion on EBS Technical Provisions stems from the related Guidance Note and consultation paper, not from this response letter itself; this document mainly records clarifications and drafting changes made to that Guidance Note.

Applies to

(re)insurers subject to the Economic Balance Sheet framework, approved/credentialed actuaries providing opinions on EBS Technical Provisions