Chennai: Even as the 'standing committee on finance' is examining the Actuaries Bill 2005, the Actuarial Society of India (ASI) says such a statue would not add any value to the profession. The bill was introduced in the Parliament, which referred it to the standing committee.

The bill proposes to confer on ASI, a chartered status and is modelled along the lines of governing statues of accounting institutes like chartered and cost accountancy and company secretaries.

The conversion of ASI into a chartered institute has its roots in the 'Malhotra committee' report. The committee recommended that the insurance industry should fund ASI while the government should consider according it a statutory status. The work on the bill started in 1996 and has now reached the Parliament.

According to Liyaquat Khan, president, ASI's, one of the provisions in the bill stipulates that the proposed institute would have three central government nominees and one from the IRDA on its governing council. This when there will be no government funding for the proposed institute.

Running a rapidly developing profession by a governing body as mentioned in the bill will not be effective and will go against the profession." Khan strongly feels that the current structure is robust enough to take the profession forward.

He adds, "The ASI has gained enough experience in running and expanding the institute's activities under the current structure. The institute works in close coordination with IRDA and global actuarial bodies like the International Actuarial Association (IAA). The latter feels that actuarial bodies are best governed if organised under self regulatory and non governmental structure but under overall guidance of the stakeholders and the sector regulator."

According to him, ASI is considering inclusion of persons from government, IRDA, legal and accounting professions on its governing council. "This is different from what the Actuaries Bill proposes. The inclusion of people from the above walks of life is our own initiative." ASI is also considers setting up of a disciplinary committee headed by a person having judicial background and with members for other professions apart from its own members.

However, the sudden stance change by ASI has raised many an eyebrows within and without the profession. "When the ASI's general body has approved the chartered institute status and agreed for transfer of assets and liabilities to the proposed institute any rethinking on the bill should be discussed and approved at the annual general meeting. The executive committee cannot unilaterally decide on the issue," says one actuary.

According to R Ramakrishnan, consulting actuary and member, Malhotra Committee, the ASI can become significant player in the Asian and African regions only if it becomes a chartered body with representatives from IRDA and the government in its governing body.

Does the change of stance have something to do with other provisions of the bill like allowing only individual and partnership firms to undertake actuarial practice and preventing actuaries to practice under corporate structure?

Khan denies it emphatically, staating, "It is not related to the issue of corporate actuarial practice."

According to industry sources, the hectic lobbying by foreign actuarial companies, supported by their governments and some domestic private life insurers, to promote the cause of corporate actuaries prevented the tabling of the bill in the Parliament in 2002 itself. (See: Foreign hand)

For global actuarial companies the stakes are high in India. The actuarial profession is slowly picking up. It is said that for every 10 chartered accountants, there is potential for one actuary. According to the Income Tax Act, gratuity valuations of companies have to be certified by a qualified actuary. Till date this rule was not followed. But nowadays, chartered accountants are insisting that gratuity, leave encashment and pension valuations of companies be done by actuaries. This throws up immense opportunities for actuaries.

Interestingly IRDA is in favour of the bill that does not allow corporate actuarial practice.