Kathmandu. The Nepal Insurance Authority (NIA) has issued the first amendment to its guidance on actuarial appointment. The new amendment is expected to strengthen professional standards and transparency of actuaries in Nepal.
The revised guidelines have sought to clarify the qualifications, responsibilities and professional standards of the insured working in life insurance, non-life insurance and micro insurance companies.
According to the revised guidelines, an insurance company will have to appoint qualified actuaries that can appoint four types of actuaries as per the requirement. Appointed actuary, peer reviewed actuary, consultant actuary, and actuarial analyst. All of these types of actuaries must meet the criteria of full work experience and professional certification.
The guidance emphasizes the role of actuaries in professional independence, conflict of interest management, and adherence to international actuarial standards, risk-based capital standards, and NFRS 17 accounting standards.
While appointing an actuary who is a Nepali citizen and residing in Nepal, the authority has adopted flexibility in terms of work experience and qualification as compared to foreigners. In the case of foreigners, 2 years of experience is mandatory, whereas in the case of domestic workers, only 1 year experience is mandatory. This provision has been incorporated through an amendment to the guideline.
Key points of revision: {
- Clarified responsibilities regarding peer review actuarial and NFRS 17.
- Eligibility criteria for actuarials are strict, minimum experience and professional certification required.
- Insurance companies are required to submit detailed documents to the Authority, such as a certificate of practice, continuous professional development, and a declaration confirming that there is no conflict of interest with the partnership firm.
- The actuary’s responsibilities include solvency monitoring, asset liability management, product pricing, and actuarial reporting.
- Strengthening the role of consultant actuaries for specific tasks and the training and work experience of actuarial analysts.
The amendment is designed to ensure that the advice of the insurer in the insurance sector of Nepal is independent, professional and in line with international best practices. This is expected to increase solvency and stability of the insurer, ultimately ensuring safety of the insured.
This amendment will help to professionalize actuarial practice in Nepal and bring domestic regulations in line with global standards. The actuarial analysts currently available with the insurer are not capable of carrying out this task. Foreign actuaries are in the role of consultant actuaries even though they are called appointed actuaries. Now, with the added workload under the guidance, they are likely to expect additional remuneration.
The authority has directed all insurance companies to comply with the new directive, submit the required documents, obtain formal approval before appointing the actuaries, and inform the insured within 7 days if any disciplinary action has been taken. Disobedience to the directive may result in cancellation of approval or other regulatory action.
