October 14, 2011
Dear Academy colleague,
As part of our mission to serve the U.S. actuarial profession, the Academy is
committed to advancing the U.S. profession’s interests in the international
actuarial arena. Just as is true in the global economy in which we live, an
increasing number of international issues can affect U.S. practitioners. Through
our participation as a member of the International Actuarial Association (IAA),
the Academy monitors these issues and serves as the voice of the U.S. profession
internationally. The IAA has nearly 100 full and associate member organizations,
and is comprised of committees with expertise in such areas as social security,
insurance regulation, education, and mortality. More information about the IAA
is available at this
link.
The Academy
works to identify emerging international issues affecting the U.S. profession
and, where possible, to seek consensus on positions among the other four major
U.S.-based actuarial associations that may be under consideration by
international organizations. One area that has received an increasing amount of
attention over the past few years is the development of model standards of
international actuarial practice. While the U.S.-based actuarial profession has
a robust set of standards of practice to rely upon, promulgated by the Actuarial
Standards Board, that is not always the case for other member associations of
the IAA.
Three years ago, the IAA developed a process for developing model
International Standards of Actuarial Practice (ISAPs). The model standards are
intended to be suitable for voluntary adoption or adaptation by IAA Member
Associations, in particular those who may not have their own national standards
of practice. These models will have no mandatory effect in the United States. As an
association of associations, the IAA only has authority to work on matters that
its membership requests, and it cannot regulate the U.S. actuarial profession in
any way. Additionally, as you know, the U.S actuarial profession adopts
standards only through the Actuarial Standards Board.
The first exposure draft of an IAA model standard, ISAP 1 — General
Actuarial Practice, has recently been released by the IAA. The exposure draft
is open for comments from IAA association members as well as individuals. A
transmittal letter and copy of the exposure draft are available at this
link.
In order to provide a comprehensive review of the IAA model standard, the
five U.S.-based actuarial organizations asked the Actuarial Standards Board
(ASB) to establish a process for reviewing the ISAP 1 exposure draft and all
subsequent exposure drafts issued by the IAA. The ASB has established a
substantive and thorough review process and has now issued a report to the
Council of U.S. Presidents (CUSP) on the ISAP 1 exposure draft. The ASB
report
is online.
The ASB has not found any material issues with proposed ISAP 1 and has not
suggested any substantive changes to the ISAP or to existing U.S. standards of
practice in light of its review.
The Academy is considering whether to file any additional comments to those
of the ASB and welcomes member input. If you would like us to consider
incorporating your comments in any response we make, please provide comments by
November 4 via this email address:
international@actuary.org.
You are of course also able to submit individual comments directly to the IAA
via the instructions available at the IAA website until December 1, 2011. If you
do so, we would greatly appreciate your sharing those with the Academy via this
email address, international@actuary.org, so we can better
know your concerns.
Going forward, the IAA has authorized four other task forces with drafting model
standards in the following areas: Enterprise Risk Management, International
Accounting Standard 19, Insurance Accounting, and Social Security. We will keep
you informed of developments on these models as they occur. The Academy plans to
follow the same process if and when those models are released by the IAA — asking
the U.S. Actuarial Standards Board first to review any proposed ISAPs; and then
to share the IAA model standard and the ASB comments directly with our
membership before any comment period closes.
Thank you. I look forward to hearing from you.
Sincerely,
Mary Frances Miller
President
American Academy of Actuaries |