Recognition and Approval of an Actuary (October 2024)

Summary

This is a Cayman Islands Monetary Authority (CIMA) Regulatory Policy, effective October 2024, setting out the minimum criteria and process CIMA uses to recognise and approve actuaries for insurers under the Insurance Act. It applies to all CIMA-regulated insurers except Class C insurers and Class B insurers that do not write long-term business, though CIMA may extend the requirements to other insurers, including short-term business writers, where it considers this appropriate.

Actuary Qualification and Approval Criteria

Professional standing: Fellowship of a recognised actuarial body, or an equivalent qualification and standing assessed by CIMA on a case-by-case basis.
Relevant experience: At least five years' post-fellowship experience in the relevant line of business, or equivalent experience.
Continuing professional development: Ongoing CPD is required.
Disciplinary record: A clean disciplinary record is required.
Conflicts of interest: Freedom from undisclosed conflicts of interest is required.

CIMA's Approach

Notification: CIMA sets out its approach to notifying applicants of approval or refusal of an actuary.
Change of actuary: CIMA sets out its approach to handling a change of actuary.
Business plan changes: CIMA sets out its approach to business plan changes that affect the actuary's role.
Disqualification: CIMA sets out the grounds for disqualifying an approved actuary who no longer meets fit-and-proper criteria.

Licensee and Actuarial Firm Responsibilities

Notify change of actuary: Licensees must notify CIMA of any change of actuary, with supporting documentation.
Prior approval for business plan changes: Licensees must seek CIMA's prior written approval for changes to an approved business plan that affect actuarial arrangements.
Maintain actuary standards: Licensees must ensure that appointed actuaries, whether in-house or via an actuarial firm, maintain their qualifications, meet CPD requirements, and disclose conflicts of interest.

Failure to seek prior approval for business plan changes is flagged as a very serious offence under the Monetary Authority (Administrative Fines) Regulations. CIMA also reserves the right to refuse or withdraw approval of an actuary, following due process, if the criteria in the policy are no longer met.

Key obligations

Insurers (other than Class C insurers and Class B insurers not writing long-term business) must submit to CIMA, by way of annual return, an actuarial valuation of assets and liabilities certified by a CIMA-approved actuary within six months of the end of the insurer's financial year (per section 9(1)(b) of the Insurance Act).
A licensee changing its approved actuary must give CIMA written notice of the proposed change, including supporting documentation such as the outgoing actuary's resignation or termination letter, for CIMA to consider approval of the new actuary.
A licensee must obtain CIMA's prior written approval before making any change to its approved business plan or to information supplied in its licence application, including changes affecting the actuary's role, and must provide reasons for the change.
Where an actuarial firm is appointed, the firm is responsible for ensuring the actuary maintains professional qualifications and complies with continuing professional development requirements; the insurer must ensure the firm has robust processes in place to meet these requirements.
Approved actuaries are expected to meet continuing professional development requirements set by their professional actuarial body and to remain free of undisclosed actual, potential, or perceived conflicts of interest.
Licensees must remove a person from the actuary role if CIMA determines the person is no longer fit and proper (e.g. unsatisfactory performance, failure to meet CPD, undisclosed conflicts of interest, or no longer meeting recognition/approval criteria).

Applies to

insurers, long-term insurers, actuaries, actuarial firms, licensees

Deadlines

within six months of the end of its financial year: Insurers subject to section 9(1)(b) of the Insurance Act must submit an actuarial valuation of assets and liabilities, certified by a CIMA-approved actuary, as part of their annual return.