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Professional Standards Directory Updates

 

The Professional Standards Directory is designed to permit members and others to access the current Board for Actuarial Standards (BAS) standards, together with the current version of the Actuarial Profession standards.

 

Update 25 - issued 20 January 2012: TM1: Statutory Money Purchase Illustrations: Version 2.0 - 22 December 2011

Please click on the hyperlinked Professional Standards Directory Update 25 to access the full update.

 

Update 24 - issued 1 September 2011: Cross-practice area announcement: new APSs, new TASs and withdrawal of GNs with effect from 1 October 2011

Please click on the hyperlinked Professional Standards Directory Update 24 to access the full update.

 

Update 23 - issued 1 March 2011: New Pensions APSs

Actuarial Profession Standards (APSs)
The Actuarial Profession has published two new APSs for pensions actuaries:

The introduction of APS P1 and APS P2 is part of the Actuarial Profession’s GN Transitions Project designed to replace Guidance Notes (GNs) containing ethical material with APSs which will complement the BAS’s Technical Actuarial Standards (TASs). 

These new APSs signal a departure from a reliance on detailed rules to a more principles-based regime of ethical and professional standards.

Version 1.0 of APS P1 builds on the Actuaries’ Code and sets out practice-specific ethical obligations for pensions actuaries working for trustees or similar governing and decision-making bodies.  It replaces GN29, while also picking up ethical issues which are currently contained in other GNs to be withdrawn at midnight on 31 March 2011.

The main changes in APS P1 compared with Exposure Draft (ED) 24 (published on 15 December 2010) are:

  • The difference between “must and should” has been explained;
  • More explicit freedom has been provided in paragraphs 3.1 to 3.3 to deviate from the standard form of written agreement with trustees in Appendix 1;
  • Paragraph 3.6 on absence arrangements has been expanded upon; and
  • The extension in paragraph 5.2 to actuaries in roles that are analogous to the role of Scheme Actuary has been completely rewritten.

Version 1.0 of APS P2 sets out the criteria for the compliance review of work undertaken by Scheme Actuaries.  It replaces GN48, including amendments to the scope of the work covered and to reflect the introduction of the TASs.

The main changes in APS P2 compared with ED25 (published on 15 December 2010) are:

  • The difference between “must and should” has been explained;
  • The attributes required to be a Reviewer (paragraphs 2.1 and 2.2) have been modified, so that the Reviewer does not necessarily need to hold a Scheme Actuary Certificate;
  • Some changes have been made to the order and wording of paragraphs 3.6 to 3.10 but the intention as regards the nature of the review required is unchanged; and
  • The transitional arrangements have been amended and now include reference to GN16 and GN28 (which had previously been expected to be withdrawn on 1 April 2011).

BAS Standards
The Board for Actuarial Standards is responsible for producing technical actuarial standards and the Actuarial Profession is responsible for implementing those standards.  Each body is responsible for the content on its own website. 

The BAS published its Pensions TAS in October 2010 which comes into effect with APS P1 and APS P2 on 1 April 2011.

APSs and BAS Standards being withdrawn
Consequently, the following BAS adopted GNs are withdrawn from midnight 31 March 2011:

  • GN9, GN21, GN26, GN34, GN36 and GN49.

Further details on the phasing out of the BAS adopted GNs can be found in the letter from the Chairman of the BAS to the President of the Actuarial Profession dated 17 February 2011 which can be found by clicking here.

Similarly, the following APSs are withdrawn from midnight on 31 March 2011:

  • GN29, GN48 and GN51.

Consultation feedback
A detailed consultation feedback and responses document is being prepared and will be published on the Profession’s website as soon as it is available.

  

Update 22 - issued 18 February 2011: Funeral Plans TAS

The Board for Actuarial Standards (BAS) has published a new Technical Actuarial Standard (TAS) covering work performed by actuaries for trust-based funeral plans (TAS FP). The text of the TAS is available on BAS’s website by clicking here.

Along with other interested parties, the Profession has been consulted in the development of the TAS, which comes into effect on 1 October 2011. We commend the TAS – which replaces GN 38 – to members who are engaged in this area of practice.

The prudential regulatory regime relating to trust-based funeral plans is less comprehensive than in other areas of practice and it is therefore particularly important that members engaged in this area of work have in mind relevant provisions of the Actuaries’ Code. These include section 2 - which requires members only to act where they have an appropriate level of relevant knowledge and skill - and section 4 - which requires members to comply with all relevant legal, regulatory and professional requirements (including Technical Actuarial Standards issued by the BAS) and to speak up or report to the Profession or, in certain circumstances, other appropriate regulatory authority where they believe that a course of action is unlawful, unethical or improper.

The Profession is continuing discussions with the BAS and other interested parties about the overall regulatory framework for trust-based funeral plans and the support given to members engaged in this area of work. In that context, it is keen to harness the experience of members who have knowledge of this area of practice. If you are interested in assisting the Profession in this way, please contact Fiona Goddard at fiona.goddard@actuaries.org.uk

 

Update 21 - issued 2 December 2010:  Amendments to GN09 and GN12

The Board for Actuarial Standards (BAS) has advised that some amendments to reflect changes in underlying regulation have been made to GN09 Funding Defined Benefits – Presentation of Actuarial Advice and GN12 General Insurance Business: Actuarial Reports.  Those changes are:

GN09: Funding Defined Benefits – Presentation of Actuarial Advice
Changes to previous Version 8.1 are reflected in the following paragraphs, and exist in the current Version 9.0: (effective from 01.11.10):

  • Under sub heading “Classification”, Version 9.0 amends its predecessor to read: “MEMBERS ARE REMINDED THAT THEY MUST ALWAYS COMPLY WITH THE ACTUARIES’ CODE AND THAT GUIDANCE NOTES AND TECHNICAL ACTUARIAL STANDARDS IMPOSE ADDITIONAL REQUIREMENTS UNDER SOME CIRCUMSTANCES.”
  • Under the sub heading “Application”, the following paragraph is added to the end of the section: “An Actuary may comply with this Guidance Note by complying with sections 1 to 4 or by complying with the Generic Technical Standards on Data (TAS D), Modelling (TAS M) and Reporting Actuarial Information (TAS R) and the Specific Technical Actuarial Standard on Pensions (the Pensions TAS).”
  • Updated version history included under sub heading “Version” – revised to reflect Version 9.0

Version 9.0 can be found here.  

GN12: General Insurance Business: Actuarial Reports
Changes to Version 4.0 are reflected in the following paragraphs, and can be found in version 5.0: (Effective from 01.12.10):

  • Under sub heading “Classification”, Version 5.0 amends its predecessor to read: “MEMBERS ARE REMINDED THAT THEY MUST ALWAYS COMPLY WITH THE ACTUARIES’ CODE AND THAT GUIDANCE NOTES AND TECHNICAL ACTUARIAL STANDARDS IMPOSE ADDITIONAL REQUIREMENTS UNDER SOME CIRCUMSTANCES.”
  • Under the sub heading “Application”, the following paragraph is added: “A member may comply with this Guidance Note either by complying with sections 1 to 8 or by performing the work and providing information in compliance with the Generic Technical Actuarial Standards on Data (TAS D), Modelling (TAS M) and Reporting Actuarial Information (TAS R) and the Specific Actuarial Standard Insurance (the Insurance TAS).” 
  • Updated version history included under sub heading “Version” – revised to reflect Version 5.0, effective from 01.12.10
  • Under the sub heading “Definitions”, the first sentence of the paragraph, “Takes the meaning assigned in PCS,” is omitted.  
  • Under the sub heading Introduction, paragraph 1.5, Version 5.0 replaces the Version 4.0 title “Faculty and Institute of Actuaries” with “Institute and Faculty of Actuaries or the Board for Actuarial Standards”.
  • Each mention of the word “member” or “members” is no longer in italics.
  • In section 1.8, the words “Sections four and later” are replaced with the words “Sections 4 to 8”.

Please note the following link to BAS' website relating to questions raised by members: http://www.frc.org.uk/documents/pagemanager/bas/FAQs/Question%206.1.pdf

Version 5.0 of GN12 can be found here.

 

Update 20 - issued 15 November 2010

APS G2: Actuarial reporting for Lloyd's syndicates writing US business
Version 1.0 of APS G2: Actuarial reporting for Lloyd's syndicates writing US business can be accessed here.

This Actuarial Profession Standard (APS) replaces GN33 which will be withdrawn by the Board for Actuarial Standards from 15 December 2010.

The Profession's Standards Review Committee notes that:

  • while GN33 is a technical Guidance Note and should prima facie be under BAS’ remit, the current GN33 deals with matters outside of BAS’ geographical scope.   APS G2 mirrors GN33, enabling the transfer of the Standard from the BAS to the Profession;
  • the Profession intends to review APS G2 in light of the emerging requirements of Solvency II and to reflect the implementation of the Insurance TAS from 1st October 2011;
  • there are no substantive changes between GN33 and APS G2.  With the exception of a few minor updates (e.g. references to appendices in the Lloyd’s Valuation of Liabilities Rules), the principle change is in turning it into the new APS format; and
  • the Standard reference APS G1 has been reserved for a general insurance mandatory ethical Standard which is currently being developed.

 

Update 19 - issued 29 December 2009: GN48: Compliance Review: Pensions
Version 2.1 of GN48: Compliance Review: Pensions which comes into effect on 1 February 2010, can be accessed here.

The Profession's Standards Review Committee has approved some minor changes to GN48: Compliance Review: Pensions, as follows:

  • In the definitions for 'Type 1 Reviewer' and 'Type 2 Reviewer' ,'The actuary' has been changed to 'a Fellow of the Faculty of Actuaries or the Institute of Actuaries' (recognising that an Associate cannot peer review under this Guidance Note).
  • Appendix 3 of GN48 has been updated to reflect current versions of those Guidance Notes still in force following the issue of revised versions and the withdrawal of certain Guidance Notes by the Board for Actuarial Standards (BAS).
  • Revisions to reflect the introduction of the Actuaries' Code from 01 October 2009.

The Profession continues to review and develop policy on peer review and the current practising certificates regime and a fundamental review of GN48 is planned in the light of this and the development of the BAS Framework of Standards, at which time a full consultation will take place.

 

Update 18 - issued 31 October 2009: APS D1

Actuarial Profession Standards
Version 1.0 of APS D1: Investment Related Business Activities for Authorised Professional Firms which comes into effect on 1 December 2009, can be found at: http://www.actuaries.org.uk/ap_standards/APS_DS1.

This AP Standard replaces GN35 which is withdrawn from midnight on 30 November 2009.

The Information and Assistance Note, The Actuary & Activities Regulated under FSMA 2000, which contains references to APS D1, also comes into effect on 1 December 2009 and can be found at: www.actuaries.org.uk/ian/IAN_ActivitiesRegulatedFSMA_20091201

 

Update 17 - issued 1 September 2009: Presidents endorse new Actuaries' Code

The Presidents of the Faculty and Institute have published a new Code setting out the ethical principles all actuaries are expected to follow in their professional life. A joint letter from the Presidents to all members of the Profession, can be accessed here.

The new Code, is both shorter and simpler for both actuaries and the public to understand than the Professional Conduct Standards (PCS), which it replaces. Unlike the PCS, breach of the Code will not of itself be grounds for disciplinary action. However, where an actuary's conduct is called into question the Code will be taken into account in any determination of whether there has been misconduct within the terms of the Profession's Disciplinary Scheme.

Next month's edition of the Actuary will carry articles by Sir Philip Mawer, the new Chairman of the Professional Regulation Executive Committee, introducing the Code and by Roger Dix, Chairman of the Professional Awareness Committee, setting out ways in which the Profession will be trying to help all members to think through the implications of the Code for them and their professional practice.

The Actuaries' Code which is effective from 1 October 2009, can be accessed here.

The Professional Conduct Standards (PCS) will be withdrawn at midnight on 30 September 2009.

From 1 October 2009, any reference to the PCS in existing Guidance Notes maintained by the Profession or the BAS, should be read as referring to the Actuaries' Code.

 

Update 16 - issued 1 November 2008: Re-adoption of Guidance Notes

Members will be aware that responsibility for Technical Standards passed to the Board for Actuarial Standards with effect from April 2006. As part of this process, the Profession transferred the responsibility for a large number of its Guidance Notes to the BAS on 19 May 2006.

The BAS has reviewed the Guidance Notes that it adopted from the Profession, and consulted on the results of the review in its Consultation Paper: Structure of new BAS Standards (and implications for adopted GNs). In September it published an analysis of the responses it received. Subject to confirmation at its Board meeting on 10 November, it intends to withdraw nine of the adopted GNs, and to reduce the content of GN19 - Retirement Benefit Schemes Winding-up and Scheme Asset Deficiency V4.8 significantly, as follows:

from midnight on 1 November 2008

  • GN22 Disclosure FSA Rules V3

from midnight on 30 November 2008

  • GN03 Contracted-out Pension Schemes where Wind-up commenced before 6 April 1997 V3.4
  • GN04 Insolvency of Employers Safeguard of Pension Scheme Contributions V2.4
  • GN10 Valuation of Reversions and Life Interests V3.1
  • GN13 Statements Required in Connection with FAS 87, 88 & 132 V3.3
  • GN17 Accounting for Pension Costs under Statement of Standard Accounting No 24 V1.0
  • GN39 Reserved Roles in Long-term Insurance Business V2.1
  • GN42 The Reviewing Actuary V2.0
  • GN51 Retirement Benefit Schemes Modification of Subsisting Rights Without Consent V1.1

Acknowledging that some elements of the Guidance Notes need to be retained meantime, the Profession will re-adopt four of them:

from midnight on 30 November 2008

  • GN10, GN39, GN42 and GN51.

Copies of the withdrawn Guidance Notes will be maintained on the BAS website.

In parallel with this, the Profession has been developing its thoughts on the Actuaries Code and supporting Standards and in due course will bring forward a range of Standards which will subsume and replace the relevant parts of the Guidance Notes now being re-adopted.

 

Update 15 - issued 22 September 2008

BAS Standards

The Board for Actuarial Standards is responsible for producing technical actuarial standards and the Actuarial Profession is responsible for implementing those standards. Each body is responsible for the content on its own website.

GN11: Retirement Benefit Schemes Transfer values
The Board for Actuarial Standards (BAS) has advised that the adopted Guidance Note GN11 Retirement Benefit Schemes Transfer Values will be disapplied with effect from 1 October 2008, when the Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 SI 2008/ 1050 come into force.

 

Update 14 - issued 25 March 2008

BAS Standards

The Board for Actuarial Standards is responsible for producing technical actuarial standards and the Actuarial Profession is responsible for implementing those standards. Each body is responsible for the content on its own website.

GN19: Retirement Benefit Schemes winding-up and Scheme Asset Deficiency
The Board for Actuarial Standards (BAS) has advised that an amended version of: GN19 has been posted on the Future Versions page of the BAS website at: http://www.frc.org.uk/documents/pagemanager/bas/GN19.pdf

The revised version 4.8 will disapply GN19 to deficiency calculations carried out from 6 April 2008 onwards (the same day that new Deficiency Regulations from the DWP come into effect) and is effective from that date. There are no changes to the actual text of GN19 other than in the preamble (Application and Legislation sections).

 

Update 13 - issued 13 March 2008

Actuarial Profession Standards

Version 7.1 of GN29: Occupational pension schemes - Advisers to the trustees, which comes into effect on 31 March 2008, can be found here.

Changes from the previous version 7.0 have been made to paragraph 2.1 to grant an extension, to 30 June 2008, to the transitional period for the implementation revised terms of appointment. The changes also outline steps to be followed in the event of failure to meet the revised deadline.

 

Update 12 - issued 31 January 2008

BAS Standards

 

Update 11 - issued 30 November 2007

  • GN20: Actuarial Reporting under the Lloyd's Valuation of Liabilities Rules
    Version 7.0 BAS amendment 1 came into effect on 12 November 2007.

The revised GN is available on the BAS website.

 

Update 10 - issued 30 October 2007

Actuarial Profession Standards (formerly known as MAP)

Version 3.1 of GN5 : The prudential supervision outside the UK of long-term insurance business, which comes into effect on 1 December 2007

A letter from the Chairman of the Life Board

 

Update 9 - issued 20 June 2007

The full Professional Standards Directory is designed to permit members and others to access the current BAS standards, together with the current version of the Actuarial Profession Standards.

  • Professional Conduct Standards (PCS)
    Version 3.0 came into effect on 1 August 2007.

The changes to the PCS have been made to recognise the establishment of the Board for Actuarial Standards (BAS) and, as set out in the Memorandum of Understanding between the Profession and the Financial Reporting Council dated 17 May 2006, to recognise that the responsibility for setting and maintaining actuarial technical standards now lies with BAS. The opportunity has also been taken to clarify some paragraphs which feedback suggests were unclear in the previous Version 2.3.

 

Update 8 - issued 11 April 2007

The Actuarial Profession transferred responsibility for five outstanding technical Guidance Notes (GNs 11, 19, 28, 49 and 51) and Technical Memorandum 1 (TM1) to the Board for Actuarial Standards (BAS) on 6 April 2007.

To achieve this final transfer the Department for Work & Pensions (DWP) had to amend relevant legislation, to alter the statutory references to these Guidance Notes. This completes the process started in May 2006 when BAS, as part of the Financial Reporting Council, took responsibility for setting actuarial technical standards. BAS now has responsibility for ensuring 37 Guidance Notes are kept up-to-date and for incorporataing any legislative or regulatory changes.

The Profession has retained responsibility for setting and maintaining professional conduct and ethical standards, including eight existing Guidance Notes. This includes one technical note (GN27) which remains with the Profession because the MFR legislation has been repealed (save only for limited purposes) and it was not possible for the DWP to make the necessary legislative amendments to allow its handover.

The Board for Actuarial Standards is responsible for producing technical actuarial standards and the Actuarial Profession is responsible for implementing those standards. Each body is responsible for the content on its own website. The following Guidance Notes were adopted by BAS with effect from 6 April 2007:

  • GN11: Retirement benefit schemes - transfer values
    Version 9.2. Effective 30.12.05
  • GN19: Retirement benefit schemes - winding-up and scheme asset deficiency
    Version 4.7. Effective 02.09.05
  • GN28: Retirement benefit schemes - adequacy of benefits for contracting-out
    Version 2.1. Effective 29.07.06
  • GN49: Occupational pension schemes - scheme funding matters on which advice of actuary must be obtained
    Version 1.0. Effective 30.12.05
  • GN51: Retirement benefit schemes - modification of subsisting rights without consent
    Version 1.1. Effective 06.11.06
  • Technical Memorandum (TM1): Statutory money purchase illustrations
    Version 1.2. Effective 01.11.06

These Guidance Notes are available on the BAS website.

 

Update 7 - issued 27 February 2007

Actuarial Profession Standards
(formerly known as the Manual of Actuarial Practice (MAP))

 

Update 6 - issued 19 January 2007

BAS Standards

The Board for Actuarial Standards is responsible for producing technical actuarial standards and the Actuarial Profession is responsible for implementing those standards. Each body is responsible for the content on its own website.

Further to PSD Update 5 (issued on 27 December 2006), the Board for Actuarial Standards (BAS) has advised that a further change has been made to:

  • GN46: Individual capital assessment
    Version 2.0. BAS amendment 1

The revised GN is available on the BAS website. The change adds the words "in respect of long-term insurance business" to the 'Application' section of the GN. There has been no change to the version/amendment number of the GN or the effective date.

 

Update 5 - issued 27 December 2006

BAS Standards

Please note that the Actuarial Profession is not responsible for the BAS Standards or for the contents of the BAS website.

Following the proposals in FSA PS 06/14, Prudential changes for insurers, a number of revisions have been made to the following Guidance Notes:

  • GN44: Mathematical reserves and resilience capital requirement
    Version 2.0. BAS amendment 1
  • GN45: Determining the with-profits insurance capital component
    Version 2.0. BAS amendment 1
  • GN46: Individual capital assessment
    Version 2.0. BAS amendment 1
  • GN47: Stochastic modelling of economic risks in life insurance
    Version 2.0. BAS amendment 1

These GNs are the responsibility of the Board for Actuarial Standards and the BAS has published versions of the GNs on its website at: http://www.frc.org.uk/bas/actuarial/index.cfm.

Members were alerted to near final versions of the GNs in Professional Standards Directory (PSD) - Update 4 issued on 20 December 2006. The GNs have now been replaced with final versions which take effect on 31 December 2006.

As stated in the PSD Update of 20 December 2006, the profession considered what changes to the GNs might be appropriate as a result of the proposals in PS06/14 and shared its work with the BAS as input to the BAS's thinking. Paul Seymour, Chairman of the BAS, has written to the Presidents setting out the various options which the BAS considered in amending the GNs - see full text of letter.

 

Update 4 - issued 20 December 2006

Actuarial Profession Standards
(formerly known as the Manual of Actuarial Practice (MAP))

The following process documents will come into effect on 1 January 2007:

BAS Standards

  • GN44: Mathematical reserves and resilience capital requirement
    Version 2.0. BAS amendment 1
  • GN45: Determining the with-profits insurance capital component
    Version 2.0 BAS amendment 1
  • GN46: Individual capital assessment
    Version 2.0. BAS amendment 1
  • GN47: Stochastic modelling of economic risks in life insurance
    Version 2.0. BAS amendment 1

These guidance notes are the responsibility of the Board for Actuarial Standards and the BAS has published versions of the GNs on its website at: http://www.frc.org.uk/bas/actuarial/index.cfm.

The revised versions are currently near final versions which will be replaced in the next couple of days with final versions which take effect on 31 December 2006.

See the letter to the Presidents from Paul Seymour, Chairman, BAS.

 

Update 3 - issued 30 November 2006

Actuarial Profession Standards
(formerly known as the Manual of Actuarial Practice (MAP))

 

Update 2 - issued 3 October 2006

Actuarial Profession Standards
(formerly known as the Manual of Actuarial Practice (MAP))

BAS Standards

Please note that the Actuarial Profession is not responsible for the BAS standards or for the contents of the BAS website.

 

Update 1 - issued 7 July 2006

Actuarial Profession Standards
(formerly known as the Manual of Actuarial Practice (MAP))

 

Page updated: 1 September 2011