Ref: IRDA/ACTL/REGN/2016-17 Date:13-02-2017

Exposure Draft on IRDAI (Relaxations under Appointed Actuary Regulations 2017 and appointment of Mentors) Guidelines, 2017

The Authority had issued “Guidelines on Appointment of Appointed Actuaries and their Mentors” on 22nd March 2016 to address the supply side gap by supporting young Actuaries with the Mentors. Based on experience and the issues emerged over a period of time, the Authority has proposed to revise the above-mentioned guidelines.

The key changes proposed in the draft guide lines are as follows:

Ø Definition of “Mentor” is incorporated

Ø Relaxation for the requirement of subject specialisation for Appointed Actuary

Ø Relaxation for the requirement of minimum relevant post qualification experience of 5 years for Appointed Actuary

Ø Insurer may continue without AA for a maximum period of 1 year.

Ø Removal of condition for mentor to hold COP only in relevant line of business

Ø Post qualification experience of mentor is reduced from 20 years to 15 years

Ø Vetting of New Products in Absence of AA by mentor for a period of maximum one month

Ø Mentor should not be an employee/AA of any insurer in India

Ø Mentor should not have committed any breach of Professional conduct

Ø No disciplinary action should be pending against the Mentor at the time of application by the Institute of Actuaries of India or any other professional body

Ø Provision for Authority to issue appropriate clarifications or modify the guidelines from time to time

You are requested to offer your comments/ suggestions on the proposed guidelines for consideration of the same by the Authority. The comments/ suggestions in MS-WORD format(Annexure-1) should be sent by e-mail to pankajk.tewari@irda.gov.in with a copy to shyama@irda.gov.in latest by 28th February, 2017.

S.P. Chakraborty

GM (Actuarial)

Annexure-I

Format for furnishing comments

Name of the Stakeholder: _____________.

Sl.No. Section No & Sub-section No. Comments/Change suggested Rationale/reasons for Comments/suggestion

Insurance Regulatory and Development Authority of India

EXPOSURE DRAFT

IRDAI (Relaxations under Appointed Actuary Regulations 2017 and appointment of Mentors) Guidelines, 2017

In exercise of the powers conferred by Sub-regulations 3(5), 5 and 12 of the draft IRDAI (AA )Regulations, 2017 and by sections 14 (2) (e ) of the IRDA Act 1999 as amended from time to time, the Chairperson of the Authority in consultation with the Insurance Advisory Committee hereby makes the following guidelines namely

1. Short title and commencement

1) These guidelines may be called the Insurance Regulatory and Development Authority of India (Relaxations under AA Regulations, 2017 and appointment of Mentors) Guidelines, 2017.

2) These guidelines will replace the guidelines dated 22 March 2016 on Appointment of Appointed Actuary and their mentors.

3) They shall come into force from the date of publication of IRDAI (Appointed Actuary) Regulations, 2017 in the Official Gazette.

4) The existing arrangements not complying with these guidelines shall cease to exist within a period of one month from the date of publication of IRDAI (Appointed Actuary) Regulations, 2017 in the Official Gazette.

2. Definitions:

1) Mentor is an actuary who satisfies the conditions mentioned in Annexure I of these guidelines.

2) All words and expressions used herein and not defined herein but defined in the Insurance Act, 1938 (4 of 1938), or in the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999), shall have the meanings respectively assigned to them in those Acts.

3. Relaxation of the requirement under 3 (2)(iii) of specialisation (as evidenced by qualification and /or working experience)

The Authority may allow appointment of Appointed Actuary who does not meet the requirements under 3 (2) (iii) a, 3(2)(iii) b or 3(2)(iii) c. However, such appointment may be subject to the following

1) All the provisions of the draft IRDAI (AA) Regulations 2017 are satisfied except the provision under 3(2)(iii)a, 3(2)(iii)b or 3(2)(iii)c

2) The candidate proposed by the insurer undertakes to pass the specialization subject within one year from the date of appointment as AA.

3) The AA will be supported by the Mentor during the one year period till he/she passes the specialization subject.

4. Relaxation of the requirement under 3(2)(iv) and 3 (2) (v) for minimum relevant post qualification experience of 5 years

The Authority may allow appointment of Appointed Actuary who does not meet the requirement under 3(2)(iv). However, such appointment may be subject to following

1) All the provisions of the draft IRDAI (AA Regulations) 2017 are satisfied except provision 3 (2) (iv) and 3 (2)(v)

2) The candidate proposed by the Insurer for the AA position has at least 2 years of relevant post qualification experience

3) The AA will be supported by the Mentor appointed as per these guidelines till the AA gets 5 years of relevant post qualification experience

5. Relaxation of requirement under 5

The Authority may allow an insurer to carry on business without an appointed actuary for a period not exceeding one year. However, this relaxation will be subject to following

1) The financial position of the insurer is found satisfactory by one of the actuaries on the “Panel of Actuaries” created for this purpose

2) New products (including modification of existing products), if any, filed by the insurer during this period will be sent to the Authority only after vetting by one of the actuaries on “Panel of Actuaries” (instead of vetting by appointed actuary).

3) The Authority may allow vetting of new products by an actuary who was Mentor to previous AA. However, such vetting may not continue beyond a period of one month from the date of resignation of the AA.

6. The norms for Panel of Actuaries are being issued separately.

7. In order to remove any doubts or difficulties that may arise in the application or interpretation of any of the provisions under these guidelines, the Chairperson of the Authority may issue appropriate clarifications or modify these guidelines as deemed necessary.

Annexure I: Guidelines on Appointment of Mentors

1. Purpose for Appointment of Mentor

1.1. To support younger Appointed Actuary who is a Fellow of the Institute of Actuaries of India but does not fulfil the experience requirement as prescribed by 3(2)(iii) of the IRDAI (Appointed Actuary Regulations) 2017.

1.2. Mentor shall be appointed only when AA is full time employee of the Company

2. Responsibility

2.1. The mentor along with the Appointed Actuary will be jointly responsible for all the actuarial issues. The duties and responsibilities of Appointed Actuary Regulations, 2017, ALSM Regulations, 2016 and other Regulations, circulars, guidelines issued by the Authority as well as actuarial professional standards issued by the Institute of Actuaries of India will also be applicable to the mentor. This will include but not limited to

2.1.1. New product filing

2.1.2. Actuarial reports at the end of year

2.1.3. Maintaining solvency and sufficiency of reserves as stipulated in the various Regulations from time to time

3. Eligibility Criteria

The applicant before becoming a mentor should satisfy the following criteria

3.1. Qualification

3.1.1. Preferably, the applicant should be a Fellow of Institute of Actuaries of India (IAI)

3.1.2. However, Fellow from any other Institutes wherein the IAI have mutual recognition agreement from time to time will also be considered provided the Actuary declares his/ her intention to obtain Fellowship of IAI within next one year.

Currently, IAI have mutual recognition agreement from three Institutes

• Institute and Faculty of Actuaries, UK.

• Institute of Actuaries of Australia

• Casualty Actuarial society, USA

3.2. Certificate of Practice (COP)

3.2.1. Preferably, the applicant should have COP to work as Appointed Actuary issued by the IAI.

3.2.2. If the applicant does not possess COP of the IAI, he/ she should declare his/ her intention to possess COP of IAI within one year from the appointment as Mentor.

3.3. Age and tenure

The upper age limit for the Mentor will be 75 years. The minimum tenure for Mentor will be one year. The maximum age on appointment as a Mentor will be 74 years completed.

3.4. Practical experience

The mentor should have at least 15 years of post-qualification experience in the Insurance field

3.5. Others

3.5.1. There should not be any conflict of interest with respect to the duties of Mentor and duties of any other position held by him / her. For example, an Actuary working as CEO or marketing head or CFO cannot act as mentor for AA.

3.5.2. The Mentor should not be an employee of any insurer in India

3.5.3. The Mentor should not be an Appointed Actuary of any Insurer in India

3.5.4. The Mentor should not have committed any breach of professional conduct

3.5.5. No disciplinary action should be pending against the Mentor at the time of application by the Institute of Actuaries of India or any other professional body

3.5.6. The appointment of mentor will be approved by the IRDAI.

3.5.7. The terms and conditions of Appointment letter of Mentor will be approved by the IRDAI.

3.5.8. In order to remove any doubts or difficulties that may arise in the application or interpretation of any of the provisions under these guidelines, the Authority may issue appropriate clarifications or modify these guidelines as deemed necessary.

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