Actuarial argument

Chennai:
07 October 2003

The 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.

The regulation defines an actuary as an individual who is:
1. A citizen of India
2. A fellow member of the Actuarial Society of India (ASI)
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

In 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.

Explaining 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.

The 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.

Apart from timing and its need, IRDA's draft throws up issues like:
(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