§ Mr. Ernest G. Perryasked the Secretary of State for Trade whether he will make a statement concerning the operating arrangements for the appointment of actuaries to life offices under Section 15 of the Insurance Companies Act 1974, with responsibilities for reporting on the financial condition of the life assurance business.
§ Mr. Clinton DavisI welcome the issue by the Institute of Actuaries and Faculty of Actuaries of a "Guide for Appointed Actuaries" in May 1975 setting out in some detail the nature of their responsibilities. I commend its contents to all managing directors, directors and chief executives of life offices because I regard it as being of the greatest importance that all concerned in life offices should have a clear understanding of the vital role in the conduct of their affairs which the actuary appointed under Section 15 of the 1974 Act should play, and of the need to afford him the necessary access at all times to the information he needs to perform his task.
Although the statutory duty of the appointed actuary is confined to making periodic investigations into the financial condition of the company's long-term business, in practice, if he is to make a full contribution to the affairs of the life office, he needs to be given enough information on a continuing basis to satisfy himself that such an investigation, if carried out at any time, would demonstrate a satisfactory financial position. In this context, I agree with the importance attributed by the guide to inter alia, information about the terms and conditions on which new contracts are issued, the office's continuing investment policy 657W and its future marketing plans. In its day-to-day dealings with life offices, my Department takes every opportunity to ensure that these offices are acting with the full knowledge and assent of their appointed actuaries, but particularly when life offices are contemplating some major new initiative. In this action I have the active support and assistance of the Government Actuary and his staff.