Stakeholder Letter - Consultation Paper on Group Actuary's Opinion (GAO) Guidance Note (2014-01-24)

Summary

This is a BMA stakeholder letter summarising feedback received on the draft Group Actuary's Opinion (GAO) Guidance Note and setting out resulting amendments, followed by next steps for Bermuda insurance groups. It does not itself finalise the Guidance Note but explains how comments from industry associations and professional firms were addressed and what groups must now do.

• ASB references: Wording in paragraphs 15 to 18 and 26 was softened by moving Actuarial Standards Board references to footnotes, with no change in substantive intent.
• Materiality clarified: Paragraph 18 was clarified to confirm that a Group's surplus for materiality purposes is tied to the BMA's regulatory standard.
• RMAD requirement removed for Long Term Business: The requirement to opine on risk of material adverse deviation in paragraph 57.d was removed for Long Term Business groups, to be revisited in the 2015 review.
• Accredited actuarial body list unchanged: The list of accredited actuarial bodies remains as set out in the Insurance Act 1978, though the Authority will consider Group Actuary applicants with other credentials on a fit and proper basis.
• Minor drafting clarifications: Small wording changes were made to the definition of adequate (paragraph 16), paragraph 22.a, and a document reference correction in paragraph 22.c.v.

Next Steps

The Authority now invites all Bermuda Groups to submit Group Actuary applications, with documentation as detailed in paragraph 22 of the Guidance Note, sent to their usual supervisory contact at the Authority.

Key obligations

• Bermuda Groups must submit applications for approval of their proposed Group Actuary, including the documents detailed in paragraph 22, to their usual supervisory contact at the BMA.
• Groups should ensure Group Actuary approvals are obtained from the Authority by the end of 2014.
• Groups must be prepared to issue their first Group Actuary's Opinions along with required statutory filings in 2015, with the first submissions due in May 2015.

Applies to

Bermuda (re)insurance groups, Long-Term Business groups, Group Actuaries

Deadlines

• end of 2014: Groups should ensure approvals for their proposed Group Actuaries have been received from the Authority
• May 2015: First set of Group Actuary Opinion submissions due, along with required statutory filings