President's Message (October 14, 2011)


News from the American Academy of Actuaries
 

Mary Frances Miller
Dear Academy colleague,

As part of our mission to serve the U.S. actuarial profession, the Academy is committed to advancing the U.S. profession’s interests in the international actuarial arena. Just as is true in the global economy in which we live, an increasing number of international issues can affect U.S. practitioners. Through our participation as a member of the International Actuarial Association (IAA), the Academy monitors these issues and serves as the voice of the U.S. profession internationally. The IAA has nearly 100 full and associate member organizations, and is comprised of committees with expertise in such areas as social security, insurance regulation, education, and mortality. More information about the IAA is available at this link.

The Academy works to identify emerging international issues affecting the U.S. profession and, where possible, to seek consensus on positions among the other four major U.S.-based actuarial associations that may be under consideration by international organizations. One area that has received an increasing amount of attention over the past few years is the development of model standards of international actuarial practice. While the U.S.-based actuarial profession has a robust set of standards of practice to rely upon, promulgated by the Actuarial Standards Board, that is not always the case for other member associations of the IAA.

Three years ago, the IAA developed a process for developing model International Standards of Actuarial Practice (ISAPs). The model standards are intended to be suitable for voluntary adoption or adaptation by IAA Member Associations, in particular those who may not have their own national standards of practice. These models will have no mandatory effect in the United States. As an association of associations, the IAA only has authority to work on matters that its membership requests, and it cannot regulate the U.S. actuarial profession in any way. Additionally, as you know, the U.S actuarial profession adopts standards only through the Actuarial Standards Board.

The first exposure draft of an IAA model standard, ISAP 1 — General Actuarial Practice, has recently been released by the IAA. The exposure draft is open for comments from IAA association members as well as individuals. A transmittal letter and copy of the exposure draft are available at this link.

In order to provide a comprehensive review of the IAA model standard, the five U.S.-based actuarial organizations asked the Actuarial Standards Board (ASB) to establish a process for reviewing the ISAP 1 exposure draft and all subsequent exposure drafts issued by the IAA. The ASB has established a substantive and thorough review process and has now issued a report to the Council of U.S. Presidents (CUSP) on the ISAP 1 exposure draft. The ASB report is online.

The ASB has not found any material issues with proposed ISAP 1 and has not suggested any substantive changes to the ISAP or to existing U.S. standards of practice in light of its review.

The Academy is considering whether to file any additional comments to those of the ASB and welcomes member input. If you would like us to consider incorporating your comments in any response we make, please provide comments by November 4 via this email address: international@actuary.org.

You are of course also able to submit individual comments directly to the IAA via the instructions available at the IAA website until December 1, 2011. If you do so, we would greatly appreciate your sharing those with the Academy via this email address, international@actuary.org, so we can better know your concerns.

Going forward, the IAA has authorized four other task forces with drafting model standards in the following areas: Enterprise Risk Management, International Accounting Standard 19, Insurance Accounting, and Social Security. We will keep you informed of developments on these models as they occur. The Academy plans to follow the same process if and when those models are released by the IAA — asking the U.S. Actuarial Standards Board first to review any proposed ISAPs; and then to share the IAA model standard and the ASB comments directly with our membership before any comment period closes.

Thank you. I look forward to hearing from you.

 

Sincerely,

Mary Frances Miller
President
American Academy of Actuaries