Indian actuaries up in arms against ASI
28 May 2001
Though it is said that there is brain drain in India, the same cannot be said for the liberalised insurance sector where there has been 'brain gain', literally! An influx of foreign actuaries – even from countries like China – has upset Indian professionals, who are blaming the Actuarial Society of India (ASI) for the 'alien crowd'.
Actuaries, a small professional tribe in India, are on a warpath against their own professional body. And all this because the society, according to them, has dashed the hopes of many an Indian actuary of becoming an appointed actuary by laying down impractical conditions for getting the necessary Certificate of Practice (COP).
An actuary is a professional who designs insurance products, fixes the premium and makes the statutory actuarial valuation for an insurance company.
An appointed actuary is the fulcrum on which an insurance company revolves. The Appointed Actuaries Regulations, 2000, issued by the Insurance Regulatory and Development Authority (IRDA) vests enormous powers in an appointed actuary.
Apart from other powers, including certification of product pricing, an appointed actuary has access to all information and documents in possession and control of an insurer. He/she can attend board meetings and express his/her views on the company's solvency position and its ability to meet its obligations to policyholders.
While an appointed actuary cannot be appointed and removed without IRDA's sanction, he/she can report to the regulator and shareholders at the company's annual general meeting on matters where the management refuses to listen the appointed actuary's counsel.
Given this prestigious position it is but natural for all actuaries to aspire for that. Aware of the appointed actuary's importance, many foreign partners of domestic private insurance companies are demanding the position for their nominees.
There are already around three foreigners occupying the coveted position of an appointed actuary and some more are likely to join their ranks. ASI has enrolled a total of 68 actuaries as fellow members between 31 March 2000 and 1 February 2001. The number of fellow members resident in India went up by just 6 to 130 during the same period.
In its regulations, IRDA has laid down that an appointed actuary should be a resident of India and a fellow member of ASI holding a COP issued by ASI. But the qualifying conditions laid by ASI for getting a COP is the bone of contention.
The conditions, ridiculed by Indian actuaries are: attending a specified number of ASI seminars and possessing "appropriate practical experience" of at least three years during the preceding seven years prior to the date of COP application.
"It is bigotist and prejudiced," is one of the major allegations against the society.
"Why is that actuaries are being singled out when no other professional body requires its members to get a COP? Why not impose a similar stipulation for auditors of insurance companies or ask them to pass the exams of Insurance Institute of India for eligibility to audit an insurance company," fumes a fellow of ASI.
The first salvo against these conditions was fired by ASI's Chennai chapter, asking the parent body to take up the COP issue with the IRDA and reform the sub-committee issuing the controversial COP.