The Actuarial Society of India (ASI) is likely to get the coveted statutory status, like the chartered accountants, cost accountants and company secretaries' institutes. It is learnt that the Insurance Regulatory and Development Authority (IRDA), after spending a year or so, has drafted the Institute of Actuaries of India Act to regulate the actuaries profession and also to set up an institute for replacing/taking over ASI. The draft law, now being studied by the Law Ministry, is expected to be placed before the Parliament soon.
The move will give the needed boost to the actuarial profession on the whole. Currently ASI, which governs the profession, is registered under the Literary, Scientific and Charitable Societies Act and is meeting its expenditure out of donations and the small corpus set up when it was initially formed.
Ever since the insurance industry was nationalised -- life in 1956 and general in 1972 -- the growth impetus for actuarial science was curbed. The four public sector general insurance companies did not bother to hire qualified actuaries to design and price their products. And this crucial function was delegated to Tariff Advisory Committee (TAC). On the other hand, Life Insurance Corporation of India (LIC) was content with a small department headed by its Chief Actuary.
Though the Income Tax Act states that gratuity and pension valuations of corporates are to be certified by qualified actuaries, the lack of them in sufficient numbers made the legal provision ineffective. Hence, many corporates got their gratuity accounts certified by chartered accountants. Given this situation, those who passed the tough Fellowship examination of ASI went abroad to work for foreign insurance companies for fancy salaries.
Fortunately, this dismal condition is likely to change when private insurance companies -- general and life -- are allowed to transact business. The IRDA has drafted the regulations governing the Appointed Actuaries systems, which inter alia makes it compulsory for an insurance company to have a qualified actuary as its Appointed Actuary/Chief Actuary.
With the underwriting industry likely to witness drastic changes and seeing the overseas markets where general insurance companies have benefited by using actuarial practices, General Insurance Corporation of India (GIC) and Insurance Institute of India have asked ASI to conduct an examination on the Casualty Actuarial Course in non-life insurance business.
ASI will conduct the exam with the support of the Casualty Actuarial Society
of America (). It is hoped that in due course, accreditation would be possible from the American society.
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