Mudi Ugono provides an update on the IFoA Life Board activities.
The chair of the IFoA Matching Adjustment (MA) working party provided an update of their latest discussions with HMT. The MA working party chair reminded the Life Board of the PRA’s concerns with the current fundamental spread (FS) and the evidence, informed by the working party’s literature review, of spreads being an indicator of expected credit losses. The MA working party also shared a non-exhaustive list of potential amendments that could be considered to the FS within the current MA framework to try to address the points raised in the recent speech by John Glen MP to the Association of British Insurers Annual Dinner on 21 February 2022.
The chair of the CMI gave an update of the committee’s recent activity and future outputs. Highlights include:
- The CMI published a blog in November 2021 setting out its intentions regarding the use of 2020 and 2021 data in forthcoming investigations.
- Planned outputs for the coming year (to February 2023) include analysis of equity release mortgages and a joint project with the Society of Actuaries to calibrate a version of the CMI Model to US data.
Sustainability / Climate Change Engagement plans
Climate remains an important theme for the Board. Bringing the actuarial practice closer to the 17 sustainable development goals (SDGs) was the theme of the most recent call between the Practice Board Engagement Plan Leads and the Sustainability Practice Board Liaisons. SDGs give a new lens as to how we can look at the different areas of the work of actuaries and is broader than climate change. For example, some of the SDGs relate to diversity, equity and inclusion (DEI). The Sustainability Board are looking to roll out a series of CPD Professionalism videos, amongst other activities, to look at how actuaries can incorporate sustainability issues through the lens of each practice area.
Responses to consultations
The IFoA responded to four consultations since the last Life Board meeting.
- PRA: CP17/21 Solvency II Definition of an Insurance Holding Company (submitted 6 December 2021)
- UK Endorsement Board: IFRS 17 Endorsement Criteria Assessment (submitted 3 February 2022)
- HMT: Future Regulatory Framework (FRF) review (submitted 11 February 2022)
- FCA: New Consumer Duty (submitted 15 February 2022)
Details of the consultations and the IFoA response can be found on the Public Affairs and Policy Consultation webpage
Digital Community Platform
Three sessions for IFoA volunteers to discuss the community strategy and the digital community platform took place in January 2022 ahead of next year’s proposed autumn launch. The purpose of the platform is to provide a two-way communication link between the members and the Practice Boards. The digital community has been positioned as an IFoA member-benefit for members. However, connecting and networking with non-members could benefit the membership. How to achieve the right balance of members and non-members will need to be considered in the coming months.