recent draft regulation issued by the Insurance Regulatory
and Development Authority (IRDA) relating to actuaries
[The Insurance Regulatory and Development Authority
(Actuary) Regulations, 2000] has kicked up yet another
debate among domestic actuarial professionals.
regulation is warranted, as the amendment to Section
2(1) of the Insurance Act 1938 required IRDA to define
the term actuary through a separate regulation. However,
the entire draft the definitions and other provisions
turned out to be contentious.
regulation defines an actuary as an individual who is:
1. A citizen of India
2. A fellow member of the Actuarial Society of India
3. Not less than 21 years of age
4. Registered as a member of ASI with his/her name entered
in its register as its fellow member
case an individual is a non-Indian, then s/he should
be a citizen of a country, which is friendly with India
and with whom reciprocal arrangements exists. According
to the regulations, reciprocity means that if the government
of a country recognises a fellow of ASI (FASI) without
any conditions then the recognised fellowship(s) of
that country shall be recognised in India, too.
further, the regulation states that if country A recognises
FIA (Fellow of Institute of Actuaries, London) and also
recognises FASI without laying down any conditions,
then FIA too shall be recognised in India by IRDA. Indeed
a strange way of defining reciprocity.
draft also states that IRDA will not recognise a person
as an actuary if s/he does not follow the prescribed
code of conduct. IRDA will take such a decision only
after allowing the concerned person an opportunity of
being heard in this regard.
from timing and its need, IRDA's draft throws up issues
(a) should the mutual recognition of qualification/disciplinary
proceedings be the domain of the regulator or that of
the professional body
(b) Indian versus foreign actuary
the need for the draft, an actuary argues: "The
definition of actuary is relevant to IRDA only
where an actuary has a statutory signing role like an
appointed actuary. The draft is an unnecessary confusion
when the Actuaries Bill 2002 is pending and also when
there is a regulation governing the appointed actuaries."
appointed actuaries' regulations do not define the term
actuary. But it states that only an actuary
to be appointed as appointed actuary subject to other
conditions. Hence the definition the term actuary
in the latest draft regulation assumes significance.
about the definition of the term actuary, ASI president
Liyaquat Khan says: "At a time when foreigners
are heading insurance companies, insistence of Indian
citizenship for an actuary is unwarranted." Today
many foreign actuaries are working in insurance companies
as appointed/chief actuary.
his turf being encroached upon by IRDA in respect of
mutual recognition to equivalent courses/institutes
and professional misconduct by actuaries Khan says:
"Reciprocal recognition of qualification and disciplinary
proceedings against an actuary are always the domain
of the professional body and not the function of the
government or the regulator."
to him ASI will soon sign a mutual recognition agreement
with the Institute of Actuaries, UK. "The UK institute
has agreed to exempt all but one of the 15 subjects.
The one subject that a FASI has to write to become a
FIA is UK-specific." A similar agreement is expected
to be signed with the Australian actuarial institute.
made easier for foreign actuaries
Curiously, in September 2003, ASI paved an easy route
to foreign actuaries to become its fellow members by
diluting the conditions. Strong lobbying by foreign
actuarial bodies is said to be the reason for the sudden
per the new conditions, a foreign actuary to become
a FASI should acquire one year's work experience in
India and attend a three-day course on Indian legislation
to be conducted by ASI.
s/he could only enter only as an affiliate actuary without
signing and voting power. S/he will be admitted as a
FASI only after acquiring one-year jurisdictional experience
and passing of two exams conducted by ASI. The two papers
are India-specific 305 and one out of two subjects
in the 400 series.
subject code 305 or India Specific Legislation, Environment
and Practices deals with insurance, taxation and accounting
laws, while the two 400 series subjects (Investment
& Asset Management and Life Insurance) are about
application of the knowledge and demonstration of skills,
professionalism and judgement in a practical situation.
three foreign actuaries have passed the 305 subject
and some are finding it difficult to clear the same.
And no foreign actuary has appeared for the 400 series
papers. "If someone wishes to work in a statutory
position like an appointed actuary, then an in-depth
knowledge of Indian laws and environment is essential
and not just desirable," says former ASI president
the rule change, Khan says: "Many foreign actuaries
are in influential positions in domestic insurance companies.
And if they are not under the ASI fold, then the professional
code of conduct
will not be applicable. And this is not a desirable
aspect. Hence we have changed the rules to bring them
under our fold."
up an actuary: "There has to be a transparent and
consultative process within ASI."