Actuarial associations should take advantage of “Fit and Proper” requirements
Fit and Proper – an opportunity for the actuarial profession
By Lutz Wilhelmy and Christophe Heck
|Lutz Wilhelmy is Director Group Risk Management at Swiss Re and Chairperson of the AAE|
|Christophe Heck is Market Head Life & Health France at Swiss Re and Chair of the AAE Professionalism Committee|
‘Fit and Proper tests’ have been introduced at the beginning of the millennium as supervisory tests for those that run a financial undertaking (e.g., a bank, an insurer, or a pension provider). The 2005 IAIS ‘Supervisory standard on fit and proper requirements and assessment for insurers’ keeps the responsibility with supervisory authority but extends the scope to key functions of insurance undertakings. While the succeeding and in-force Standard of IAIS Insurance Core Principles (ICPs) avoids the notion of ‘Fit and Proper’, it effectively lists requirements for being ‘Fit and Proper’ while requiring supervisors to ensure that insurers have effective key functions, including an actuarial function. So, the ultimate responsibility is shifted to the insurance and reinsurance undertaking. The ICPs are soft laws that are applicable for European supervisory systems and regularly assessed by the IMF’s Financial Sector Assessment Program (FSAP).
This article represents the opinion of the authors, and not necessarily the opinion of the AAE.
This article was published in The European Actuary No. 32 – December 2022