BAS launches major consultation on new Conceptual Framework for actuarial standards

As part of its project for developing a new structure for actuarial standards, the Board for Actuarial Standards (BAS) has today published a Consultation Paper on the underlying conceptual framework. Paul Seymour, Chairman of the BAS, explained the reasons for the consultation:

“The BAS’s strategic goal for the future of actuarial practice is that people should have confidence in the reliability of actuarial information. As a starting point, we need a framework which will underpin the setting of standards for developing actuarial information that is complete, transparent and comprehensible. Not surprisingly, some of the ideas in this consultation are new, in terms of both the framework and the conceptual content.”

Today’s consultation paper explores a range of issues essential to a Conceptual Framework:

• How to strike a balance between regulating the content of actuarial information and not stifling the development of new ideas, especially in areas where non-actuaries are free to compete against actuaries for the work.
• How the component parts of an actuarial calculation fit together and how to describe and explain the linkages between the different components in terms that are relevant to the user’s needs, without over-burdening the user with unnecessary information.
• Resolution of some of the myths and misunderstandings surrounding existing actuarial practice.

The consultation period ends on 31 January 2008. Copies of the consultation paper can be downloaded from the BAS’s website at: http://www.frc.org.uk/bas/publications/consultation.cfm. Hard copies of the consultation paper can be obtained from our offices by calling: 020 7492 2328 or email: e.brown@frc.org.uk.  

This is the first time that an actuarial body has attempted to construct such a Conceptual Framework and the work so far has inevitably attracted interest from a wide community, both from inside the profession and from elsewhere. Today’s consultation brings together the research carried out by the BAS’s own researchers and by volunteer groups – actuaries, other professionals and stakeholders – who have been working hard on a number of topics.

BAS Board Member, Dianne Hayter, also a member of the National Consumer Council, emphasised the importance of consultation:

“The BAS is taking steps to ensure that users of actuarial services know that their views are very welcome, particularly at this stage of the process, because this is when the foundations are laid for the standards that will follow.”

1. The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting confidence in corporate reporting and governance. Its functions are exercised principally by its operating bodies (the Committee on Corporate Governance, the Accounting Standards Board, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board and the Accountancy and Actuarial Discipline Board).
2. In 2006, following the Treasury-commissioned Morris Review of the Actuarial Profession, responsibility for setting actuarial technical standards was transferred from the professional bodies to the BAS.
3. The Board for Actuarial Standards has a primary objective of promoting competence and transparency of actuarial practice by establishing and improving actuarial technical standards and ensuring that they are coherent, consistent and comprehensive.
4. All media enquiries should be addressed to Paul Seymour, Chairman of the Board for Actuarial Standards, 020 7492 2328 or email at: p.seymour@frc.org.uk