Guidance Note on Actuarial Requirements and Standards

Summary

This guidance note explains the actuarial requirements applicable to insurance companies licensed in Guernsey under the Insurance Business (Bailiwick of Guernsey) Law 2002 (the IBL), and sets out the professional standards the Commission expects actuaries to follow. It does not override the IBL, its regulations, or the separate Guidance Note on Actuarial Valuations.

• Appointment of actuary: Companies writing long term business must appoint an actuary unless the Commission agrees in writing otherwise; if an appointment ends, the Commission must be informed and a new actuary appointed within 28 days.
• Change of actuary: An actuary who leaves before the end of their term must inform the Commission within 7 days whether there are circumstances connected to their departure that should be brought to the Commission's attention.
• Actuarial investigation: Long term insurers must provide an actuarial investigation into their financial condition, in accordance with relevant professional standards, at the end of every accounting period.
• Transfers of long term business: A scheme of transfer cannot be determined by the Royal Court unless accompanied by an independent actuary's report on the terms of the scheme.
• Liquidation: On liquidation of a long term insurer, the Royal Court may appoint an independent actuary to investigate the business and report to the liquidator and the Commission.
• Duty to report to the Commission: An actuary must report to the Commission any matter giving reasonable cause to believe it is, or is likely to be, materially significant to protecting policyholders from significant risk of loss.
• Meetings and disqualification: The Commission may require meetings with actuaries and has power to disqualify an actuary who fails to comply with duties under the regulatory laws or is otherwise unfit.
• Professional standards: Actuarial reports relied upon by insurers should be prepared by a member of a recognised actuarial body that is a full member of the International Actuarial Association, and, where the actuary is a member of the Institute and Faculty of Actuaries, in accordance with APS X1; actuaries from other bodies should state compliance with any other applicable professional or technical standard.

The note confirms there are currently no specific actuarial standards issued by the Channel Island Actuarial Association, so the Commission's own expectations described above apply in the interim. It was first issued 1 January 2018 and reissued in November 2021.

Key obligations

• Insurers writing long term business must appoint an actuary unless the Commission agrees in writing to waive this requirement.
• If an actuary's appointment ends, the company must inform the Commission and appoint a new actuary within 28 days.
• An actuary ceasing to hold office before the end of their term must inform the Commission within 7 days of any relevant circumstances connected with their departure.
• Long term insurers must provide an actuarial investigation into their financial condition at the end of every accounting period, in accordance with relevant professional standards.
• A scheme of transfer of long term business must be accompanied by an independent actuary's report before the Royal Court can determine it.
• An actuary must report to the Commission any matter giving reasonable cause to believe it is materially significant to the protection of policyholders.
• Actuarial reports relied upon by insurers must be prepared by a member of a recognised actuarial body that is a full member of the International Actuarial Association.
• Actuaries who are members of the Institute and Faculty of Actuaries must comply with Actuarial Professional Standard APS X1; actuaries from other bodies must state compliance with any other applicable professional or technical standard.

Applies to

international insurance companies, locally incorporated domestic insurance companies, long term business insurers, actuaries

Deadlines

• 28 days: Company must appoint a new actuary within 28 days after an appointment comes to an end, and inform the Commission.
• 7 days: An actuary leaving their position before the end of their term must inform the Commission within 7 days of relevant circumstances.
• end of every accounting period: Long term insurers must provide an actuarial investigation into their financial condition.