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Kingman review

The Kingman Review is an independent review of the Financial Reporting Council (FRC), the regulator for auditors, accountants and actuaries. The review will be led by Sir John Kingman, who has extensive private and public sector experience. Find out more about how the IFoA is responding to the review

Independent Review of the Financial Reporting Council

The Independent Review of the Financial Reporting Council issued a Call for Evidence in June 2018. On 6 August, the IFoA submitted its response to the consultation.

You can read our response.

 

FAQs

What is the Independent Review of the Financial Reporting Council and why is it taking place?

In April 2018, the Government announced its intention to conduct an independent review of the FRC. This followed a number of high profile corporate collapses, notably Carillion, which subsequently led to a joint inquiry by the Work and Pensions and the Business, Energy and Industrial Strategy Select Committees

The Government is therefore undertaking this review to assess the effectiveness of the FRC’s governance, impact and powers, to ensure it is fit for the future.

Find the Review’s Terms of Reference here

 

Who is Sir John Kingman?

Sir John Kingman was appointed by the Secretary of State for Business, Energy and Industrial Strategy to lead the Review. As a consequence, it is sometimes referred to as the Kingman Review.

Sir John is a former senior civil servant who was Second Permanent Secretary to HM Treasury until 2016. He is currently the Chairman of Legal & General.

He is supported by a small secretariat team and an Advisory Group.

 

What is the Financial Reporting Council (FRC)?

The FRC is a UK Non Departmental Public Body that has regulatory roles in relation to auditors, accountants and actuaries in the UK, and is responsible for the UK’s corporate governance code.

Since 2005, the FRC has had specific responsibilities in relation to the regulation of actuaries carrying out work within UK geographic scope (more details below).

 

Why is the Review important to the IFoA?

Whilst the call for evidence predominantly focuses on how the FRC regulates audit and accountancy, the Review also asks whether the existing arrangement for the regulation of actuaries in the UK (put in place following a review in 2005 (the Morris Review)) is still fit for purpose.  

 

What are the current regulatory arrangements for IFoA members?

Since the 2005 Morris Review, the FRC has, by agreement with the IFoA set out in a Memorandum of Understanding, been responsible for three functions relating to the regulation of actuaries in the UK:

  • Independent oversight of IFoA regulation in the UK (including the IFoA qualifications system);
  • Setting of Technical Actuarial Standards (TASs) in relation to UK actuarial work (the IFoA is responsible for all ethical/conduct standards, including the Actuaries’ Code); and
  • Disciplinary enforcement in relation to cases involving IFoA members that potentially give rise to “important issues affecting the public interest in the UK” (the IFoA deals with other disciplinary cases through its Disciplinary Scheme).

The IFoA is responsible for all other aspects of the regulation of its members, including all non-UK work/members, CPD requirements and Practising Certificates, as well as the regulation of the different qualification standards and admissions. The IFoA also retains responsibility for enforcing the TASs in relation to members carrying out UK work.

 

What changes would we like to see as a result of the Review?

The IFoA believes that the model of professional self-regulation subject to effective independent oversight remains the most appropriate arrangement for the regulation of actuaries in the UK.

However, our response highlights some specific aspects of the arrangements where there may be an opportunity to make changes to improve effectiveness as well as to reflect developments in the actuarial profession since the time of the Morris review.

In particular, the IFoA considers that the current arrangements could be sensibly improved by:

  1. clearer distinction between regulatory/qualification (IFoA) and independent oversight (FRC) roles; and
  2. simplified arrangements in relation to the setting of professional standards.

One area where we see no need for change is a suggestion in the consultation for the FRC to receive statutory powers in relation to actuarial regulation.

We believe that there no evidence to suggest that the current arrangements are not serving to protect the public interest and the introduction of a system of statutory regulation, where there is not an identifiable need to do so, seems disproportionate.

 

How was the IFoA’s response developed?

The IFoA established a Steering Group comprised of senior volunteers and the IFoA Executive. The Group worked together throughout the consultation period to inform our response, which was then reviewed and signed off by the Regulation Board, the Policy and Public Affairs Board (PPAB) and Council.

 

Which other professions are affected by the Review?

The Financial Reporting Council also oversees the professional bodies for accountants and auditors in the UK and has particular regulatory roles in relation to audit and accountancy, therefore those professions are also in scope of the Review.

 

What happens next?

The call for evidence closed on 6 August 2018. The Review Secretariat will now consider the evidence it receives and will produce a final report for Government on its findings towards the end of 2018. The Government will then consider the report and will consult on any necessary recommendations or changes in 2019.

In the interim, members of the IFoA Steering Group will continue to engage with the FRC Secretariat Team.

For more information regarding the Review, please visit the review website

For more information regarding the IFoA’s response, please contact the IFoA Regulation team

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Events calendar

  • CILA 2022

    23 May 2022 - 24 May 2022

    Spaces available

    We continue to live in a world of global uncertainty. Survival depends on our ability to simultaneously navigate through the diverse root-causes, ranging from: the consequences of Climate Change; transitioning to Net Zero; increased inflationary pressures and supply chain issues; to self-imposed changes in regulatory requirements. CILA 2022 focuses on these challenges to ensure we continue to be informed and remain battle ready, as well as showcasing highlights of recent CMI outputs.

  • Spaces available

    In the spirit of fostering the IFoA’s vibrant, global community and enabling our members to participate, we have decided to hold our AGM virtually again this year. This allows for greater accessibility to this important annual event, and for greater accountability of our organisation.

    The Business of the AGM

  • The IFoA Conference 2022

    133 Houndsditch, London EC3A 7BX and Online
    22 June 2022 - 23 June 2022
    Spaces available

    We’re delighted to welcome you back to our first in-person conference since early 2020, also being delivered virtually in our first-ever hybrid event. The theme of our inaugural two-day conference is ‘Focusing on tomorrow’s actuary’ and will explore the contribution actuarial science is making to some of tomorrow’s biggest issues.

     

  • Spaces available

    This webinar will cover:

    • Some background on the risks of misselling in an ESG context, including the DWS case

    • Achieving positive impact is a strong antidote to the risks of greenwashing or ESG misselling, however this risks having a tension with fiduciary responsibilities

    • This tension can be resolved with a concept called Universal Ownership

    • Under Universal ownership, investors have an appetite to make a loss in order to achieve positive impact, and yet still have no compromise on their fiduciary responsibilities

  • Spaces available

    This session will focus on the transformation roadmap of the healthcare sector in KSA and the role of actuarial capabilities in enhancing its evolution to the desired end stage as per the objectives of the Vision 2030. The discussion will focus how the system has evolved so far and shed light on  the expected future changes. Through examining  the transformation, we will highlight how the sector is and can use actuarial  expertise to not only assist with this transformation but also use basic actuarial principles to identify the key risks and their respective mitigation strategies.