The Institute and Faculty of Actuaries (IFoA) has welcomed the Government’s proposals on a regulatory regime for actuaries, ‘Audit, Reporting and Governance Authority’ (ARGA), but stated that the scope should be clearly specified.
In response to the Government’s consultation on ‘Restoring trust in audit and corporate governance’, the IFoA expressed concern regarding the details of the proposal which it believes may lead to consequences such as regulatory arbitrage. As a result, the IFoA urges that the scope of ARGA regulation be clearly defined.
IFoA president-elect Matt Saker says: “We welcome the decision to have the newly established Audit, Reporting and Governance Authority (ARGA) oversee and regulate the actuarial profession, focused primarily on individuals, by reference to a clearly defined list of public interest actuarial activities.
“The Government has listened to our concerns and agreed it would be contrary to the public interest to deter membership of the IFoA, or the employment of IFoA members in both traditional and emerging areas of actuarial work, by regulating only the work of our members. It is also helpful the Government has confirmed the current division of responsibilities between ARGA and the IFoA will be retained, albeit on a statutory footing.
“While welcoming the consultation response, we do have questions and concerns about the detail of the Government’s proposals, which may still lead to unintended consequences, including regulatory arbitrage, contrary to the public interest. It will be critical to define the scope of ARGA regulation clearly and carefully, focused on public interest activities, and how this regulation will be monitored and enforced, consistently and proportionately.
“There remains the real risk otherwise that some rules may still apply to members of the IFoA but not to non-members, who are undertaking the same work. We believe this could undermine the profession, lead to a lowering of standards and result in regulation spanning an ill-defined range of activities which would be difficult to monitor and enforce effectively.
“Actuaries are essential to a well-functioning financial system. The work they do on a daily basis in the public interest ensures that people receive the pensions they are entitled to, that insurance products are priced accurately for customers and that companies hold sufficient capital to pay claims to their customers.
“We look forward to continued engagement with Government on the development and implementation of its proposals, in addition to other stakeholders, to ensure their success in protecting the public interest effectively and proportionately.”