The Central Bank of Ireland (CBI) has published its findings following a thematic review of Actuarial Opinions on Technical Provisions (AOTPs) and Actuarial Reports on Technical Provisions (ARTPs) in respect of year-end 2016. This feedback is very timely as many Heads of Actuarial Functions (HoAFs) enter the year-end 2017 process and prepare to present these reports for the second time since the Solvency II regime came into force.
The quick read: Highlights
The CBI clarified that HoAFs can add comments to the AOTPs template on:
• Reliance on others in the calculation of Technical Provisions (TPs)
• Material concerns, limitations and recommended improvements
Our industry experience indicates that many HoAFs did not list recommendations in the AOTPs for last year-end, as the wording from the CBI implied that recommendations could only be included if the AOTPs was qualified first.
The CBI also called for improvements in the documentation of methods used to assess the completeness, accuracy and appropriateness of data used. Improvements in reporting methodologies, assumptions and experience analysis were more areas of focus, and the CBI also called for more detail to be provided around simplifications, expert judgements and materiality.
By way of a recap—the CBI published the ‘Domestic Actuarial Regime and Related Governance Requirements under Solvency II‘ in 2015 and these requirements became effective on 1 January 2016. Companies must appoint HoAFs and each HoAF must, amongst other things, deliver the AOTPs to the CBI on an annual basis and a more detailed ARTP to the board on an annual basis (which is also made available to the CBI on request). The format of the AOTPs is provided as an appendix to the published requirements.
During 2017 the CBI reviewed a sample of ARTPs and AOTPs and has since issued specific recommendations to a number of companies and HoAFs. The CBI has also issued some general findings which have been published on the CBI’s website here.