Reserving Requirements for Non-Life Insurers and Non-Life and Life Reinsurers
FAQs issued by the Central Bank of Ireland
We would like to alert you to a Frequently Asked Questions document issued by the Central Bank of Ireland last Friday following last year’s publication of “Reserving Requirements for Non-Life Insurers and Non-Life and Life Reinsurers”. We have summarised the key issues below.
Key issues covered include:
- The requirement for regulated entities to submit to the Central Bank, no later than 30 June 2015, in a format to be prescribed, details of any person occupying the role of Signing Actuary as of 31 December 2014. Furthermore, Chief Executive Officers must confirm in writing to the Central Bank no later than 30 June 2015, in a format to be prescribed, that the undertakings have performed the required due diligence in respect of persons performing the new PCF of Signing Actuary.
- It is the responsibility of companies to inform the Signing Actuary of any material developments after the year end which have the potential to materially affect the Best Estimate. The Signing Actuary does not need to remind companies of this responsibility. The Signing Actuary should exercise judgement in deciding whether a supplementary report is needed where they have been notified of any developments after year end.
- The Peer Review requirements are effective for financial years ending on or after 31 December 2104. Therefore for High Impact companies, the first peer review would be carried out on year end 2015 data at the latest. For Medium High Impact companies, the first peer review would be carried out on year end 2016 data at the latest and for Medium Low Impact companies, the first peer review must be carried out on year end 2018 data at the latest.
- At least one of the Signing Actuary and the Reviewing Actuary must be external to the company and its group. Where the Signing Actuary function is outsourced, the Signing Actuary and Reviewing Actuary shall not be from the same firm.
- The Signing Actuary can consider producing a qualified SAO if his/her work is subject to significant limitations but he/she is still satisfied that the booked reserves exceed the best estimate.
- The Central Bank will allow deviations from the standard SAO wording where:
- The actuary has reviewed draft rather than the final statutory returns and/or
- There are immaterial differences due to rounding.
If you have any questions relating to the SAO requirements, we would be pleased to speak with you.