I NTERNATIONALS ECTIONN EWS - MEMBER | SOA · Sikaras, who so diligently forwarded the articles as they came in. May you enjoy this newsletter and “read rightly.” Randy Makin,

Background

M any countries inEastern Europe andCentral Asia are in the

process of revitalizing their econ-omy. An important step in thedevelopment of the free marketeconomy is the promotion ofinsurance and pension business as well as the consolidation of the socialsecurity systems in these countries. All such activities require strong tech-nical support typically offered by the actuarial profession. Consequently,there has been a strong push for actuarial training in these countries.

In this spirit, as part of the socioeconomic reform in Kazakhstan, and inorder to promote insurance and pension businesses, the Kazakhstangovernment planned the introduction of insurance laws and regulations in2000, requiring the certification of actuarial reports issued by the insurancecompanies by qualified actuaries. Since there were no trained actuaries inKazakhstan, there was the urgent need to train a group of qualified actuar-ies to perform the actuarial valuations. To expedite the process, it wasdecided that the initial qualification process would consist of two examina-tions covering the basic actuarial principles and mathematics, and

NUMBER 25

INTERNATIONAL SECTION NEWSJUNE 2001

I thought I would escape thisissue without having to writemy way out of a corner (so to

speak), but Randy threatened to fillthe space by blowing up my picturea la Chairman Mao. He has aunique and persuasive way of fill-ing out his newsletter (we haf vaysof making you write!)

The International Section wasstarted nine years ago by BobCollette, Curtis Huntington, KevinLaw, Chip Moes, and CamiloSalazar, among others. The initialmembership quickly supercededthe minimum requirements andgrew rapidly. The section survived acrisis in Mexico in 1994 andanother in Asia in 1997, as well asmembership rate increases alongthe way. Buoyed by the certain

In This Issue

page

Chairperson’s Corner

by Jim Toole ............................1

How We Helped Start the NewActuarial Profession in Kazakhstanin 2000

by Michael Sze.........................1

Editor’s Note

by Randy Makin......................2

My Trip to Budapest

by Norm Crowder....................7

Actuarial Society of Malaysia HostsIAA Meeting

by Hassan Kamil.....................8

page

The CAA Annual Conference 2000

by Peter Wrede .......................10

Section Web Liaison Needed .....11

A Worldwide Survey of LifeAssurance Premium Relief (LAPR)

by Ronald Poon-Affat ............12

My Trip to Taipei and Kuala Lumpur— Jan. 7-15, 2001

by Robert L. Brown ...............15

New Tax Regime Extends Attractionsof Ireland Centre for Cross-BorderEuropean Life Business

by Gary Boal..........................16

page

SOA Ambassador Update - Spring2001 ............................................18

The SOA Takes the AssociateshipProfessional Course to Pakistan

by Linden N. Cole..................20

Minutes of the ISN SectionConference Call - Jan 23, 2000,5 p.m. CST ................................22

Highlights of Egyptian InsuranceMarket

by Mohamed F. Amer ............24

How We Helped Start the New ActuarialProfession in Kazakhstan in 2000

by Michael Sze

Chairperson’sCorner

by Jim Toole

(continued on page 3, bottom) (continued on page 4)

INTERNATIONAL SECTION NEWSPAGE 2 JUNE 2001

O ur company recently

introduced an eight-week

program entitled “Eat

Right.” Even now my grammar

check tells me this should read,

“Eat Rightly.” Hmm. Anyway, such a

program apparently does not prove

inviting to males, as the second

meeting showed a 1:26 ratio, if I

counted correctly, but it seemed to

offer suggestions that were very do-

able. The bad news came this week,

though, with the seemingly rational

advice, “Avoid buffet-style restau-

rants.” Now this is quite serious. I

will admit that buffets encourage

overeating, particularly in places

that offer numerous distinct dishes.

But it is, in fact, in the distinction,

in the variety, that the attraction is

centered.

Well, if I have to give up buffet

style restaurants in order to eat

rightly, I can still enjoy the smor-

gasbord of the actuarial world in

which we live. This issue offers

something from almost every conti-

nent. Michael Sze has prepared an

article on Kazakhstan, giving an

excellent treatment of what it is

like to establish a sound actuarial

profession, starting from ground

zero. Hassan Kamil fills us in on an

IAA meeting in Kuala Lumpur, and

their Society’s work to increase

professionalism. Linden Cole, with

feedback from Nauman Cheema,

describes the reception of the new

Associateship Professionalism

Editor’s Noteby Randy Makin

This newsletter is free to Section members. A subscription is $15.00 fornonmembers. Current-year issues are available from the BooksDepartment. Back issues of Section newsletters have been placed in theSociety library and on the SOA Web site (www. soa.org). Photocopies ofback issues may be requested for a nominal fee.

Expressions of opinion stated herein are, unless expressly stated tothe contrary, not the opinion or position of the Society of Actuaries, itsSections, its Committees, or the employers of the authors.

The Society assumes no responsibility for statements made or opin-ions expressed in the articles, criticisms, and discussions contained inthis publication.

Randy Makin, Newsletter EditorBusiness Men’s Assurance CompanyThe BMA Tower, One Penn Valley Park700 Karnes Blvd.Kansas City, MO 64108Phone: (816) 751-5875Fax: (816) 751-5888

August C. Chow, Assistant EditorMo Chambers, Director of InternationalActivities

James F. Toole, ChairpersonLisa S. Kuklinski-Ramirez, Vice-ChairShumei R. Kuo, Secretary/TreasurerAugust C. Chow, Council Member Michael E. Gabon, Council Member(Spring 2001 & Annual Mtgs. Representative)Hubert B. Mueller, Council MemberJorge M. Noronha, Council MemberRonald L. Poon-Affat, Council MemberHans J. Wagner, Council Member

Issue Number 25, June 2001

International Section of the Society of Actuaries475 N. Martingale Road, Suite 800

Schaumburg, IL 60173

Phone: (847) 706-3500 Fax: (847) 706-3599 Web site: www.soa.org

INTERNATIONAL SECTION NEWS

Copyright © 2001 Society of Actuaries . Al l r ights reserved. Printed in the United States of America.

Joe Adduci, Desktop Publishing Coordinator([email protected])Phone: (847) 706-3548 Fax: (847) 273-8548Lois Chinnock, Staff Liaison([email protected])Phone: (847) 706-3524 Fax: (847) 273-8524Martha Sikaras, Manager of International Affairs([email protected])Phone: (847) 706-3596 Fax: (847) 273-8596

PAGE 3JUNE 2001 INTERNATIONAL SECTION NEWS

Course in Pakistan, the first of

several in locations around the

world, and Rob Brown reflects on

his recent trip to Asia. Representing

Africa, Mohammed Amer, who has

written for us before, provides an

update on Egypt’s market.

Turning to Europe, we have a

write-up by Norm Crowder on

another IAA meeting in Bulgaria,

and an article by Gary Boal on the

tax advantages of the International

Financial Services Centre in

Dublin. Also included is a parallel

article by Ronald Poon-Affat with a

country-by-country survey of tax

benefits relative to premiums.

Finally, Peter Wrede has outlined

the CAA Annual Conference from

last year. We also have included the

minutes from one Section Council

meeting and the Ambassadors’

Report to keep our readers updated

on other International Section

developments. Once again a very

big “Thank You” to all of the writers

who contributed to this issue, and

to Lois Chinnock and Martha

Sikaras, who so diligently

forwarded the articles as they came

in.

May you enjoy this newsletter

and “read rightly.”

Randy Makin, FSA, MAAA, is vice

president of Reinsurance Actuarial

at Business Men’s Assurance

Company in Kansas City, MO. He

can be reached at [email protected].

increase of cross-border financialservices M&A transactions, we aresure to weather the storms to come.

The Section is large (1,800), butnot overwhelming (4,000 in Invest-ment and Product Development).Section distribution by primarypractice area is 45% Life, 25%Retirement Systems, and 12%Health. The Sections with the mostcrossover with International interms of sheer numbers areProduct Development, FinancialReporting and Investment (over900 each), but in percentage terms,our largest crossover is with theSmaller Company, Futurism andEducation & Research Sections,each with more than one-third oftheir mem-bers also signed up asmembers of the InternationalSection.

The International Section is oneof various SOA Sections that arenot a primary practice or specialty,but are instead secondary selectionsfor a majority of their members.More of a point of view than a disci-pline, we find we can best add value

working with others to provide abroader perspective.

We are eager to find new ways topartner with other Sections, fromseminars to research projects, toinvest our time and Section funds.We strive to provide a wide varietyof services to our members —newsletters, meeting sessions, theambassador program, and otherprojects, the most recent being asuccessful seminar with the Non-Traditional Marketing Section. Weare planning to offer an interna-tional valuation seminar in the fallto provide a high-level forum fordiscussion of issues faced by actuar-ies involved in internationaloperations.

More than 20% of our memberslive overseas, which is double theaverage of the SOA as a whole. Butthis still leaves 1,100+ SOA mem-bers living overseas that are notmembers of the InternationalSection, which leaves me wonderingwhy. What services can we providethat would attract a larger percent-age of actuaries working overseas?

I bring all this up to point out twothings: 1) we try to find opportuni-ties for partnering with otherSections to add an internationalperspective, and 2) we are interested

in you, ourmembers. If youhave any sugges-tions or feedback,feel free to contactany member of thecouncil.

Another meansof providing feed-back will be theelectronicmembers’ survey.Our members areloyal, so we must be doing some-thing right; on the other hand, wewant to be sure we are offering youthe services you want. A simpleelectronic survey will be appearingin your mailbox soon after thisnews-letter that will help us findout a little more about our membersand how we can best serve them.When it arrives, please take fiveminutes to fill it out.

Finally, when the election ballotarrives, take the time to vote!

Many thanks -

Jim Toole, FSA, MAAA, is a con-sulting actuary at Milliman &Robertson Inc. in Denver, CO. He can be reached at [email protected].

Jim Toole

Chairperson’s Cornercontinued from page 1

providing an overview of the appli-cation of these principles to thevarious lines of business involvingactuaries. Each of these twoQualifying Examinations would begiven following an intensive three-week seminar on the respectivesubject. Persons passing bothQualifying Examinations would becertified by the Insurance Super-vision Division of the NationalBank of Kazakhstan as QualifiedActuaries, with a license for twoyears. Renewal of the license wouldbe subject to further actuarialtraining provided in subsequentyears.

PreparationThe training courses were jointlysponsored by the USAID and theNational Bank of Kazakhstan.Major funding was provided by theUSAID. The instructors wereCharles McLeod and Michael Sze.

Much time and effort were spentformulating the topics to be coveredby each of theseminars, select-ing the propertext for thecourse, planningout the specifictopics covered bythe seminars, thetimetable, andthe standard ofthe tests and examinations. RobertBrown, Norm Crowder, MoChambers, and Rachel Brody of theSociety of Actuaries, and ChrisDaykin and Hugh Sutherland of theBritish Institute of Actuariesprovided much assistance andadvice. Sam Broverman and MikeBraunstein helped in the choice ofteaching material, and Mad RiverBooks provided much neededdiscounts on the textbooks and thecalculators.

After much discussion, it wasdecided that the first seminar, andthe Qualifying Examination — PartI, would cover the Theory ofInterest and Life Contingencies.The standard of the tests and exam-inations would be patterned afterthe Enrolled Actuaries ExaminationPart IA in the United States. Thesecond seminar, and QualifyingExamination — Part II, will covermajor topics in individual life andhealth insurance, group life andhealth insurance, property andcasualty insurance, reinsurance,pension and annuities, social secu-rity, and investment.

Since there is no internationalexamination which covers all thesetopics, a separate set of tests andexaminations had to be devised bythe instructors. The passing stan-dard would be close to theinternational standard. In view ofthe shortage of time, it was alsodecided that the medium of teachingwould be English. No translator

would beprovidedfor thelectures,nor for thetests. Thetextbooksand calcu-lators wereprovided

free to the students. Students ofeach course who successfully com-pleted the course and passed theexamination were allowed to keepthe textbooks and the calculators.

Format of the TrainingCourseThe main difficulty of these train-ing courses was the shortage oftime. The material covered in thefirst training course was typically

covered in two full-term semestersin universities in the United States.The material for the second train-ing course required at least fourfull-term seminars. Typically in theUnited States, 40-50% of candidatesfor each of these examinationswould pass.

In view of the extreme shortageof time, it was decided to make thetraining courses very intensive.There would be five days of lecturesand workshop each week, followedby an optional review session eachSaturday. On each week-day, therewould be two lectures in the morn-ing, followed by a test in theafternoon, and review workshopafter that. Both training courseswere highly technical and computa-tion intensive. In the first course,the students were provided withfinancial calculators to facilitate thenecessary calculations. In thesecond course, many of the after-noon workshops were conducted inthe computer center. Most testquestions required computer solu-tions to practical problems ininsurance and pension.

Results of the SeminarsAttendance was excellent. Forty-two students signed up for the firsttraining course, and eighteenstudents signed up for the secondcourse. Most of them attended allthe weekday lectures and theoptional Saturday reviews.

The first training course wasgiven in May 2000, and was partic-ularly difficult for most students.The intensity of the course, and thelevel of difficulty of the tests andexaminations were far beyond theexpectations of all the students. Itwas a cultural shock for them.

However, despite tough testsevery day, and very disappointingtest scores in the initial week, the


How We Helped Start the New Actuarial Profession in Kazakhstan in 2000continued from page 1

students persisted, studying harderand sleeping less each day. In theend, thirty-eight students took theQualifying Examination — Part I,and sixteen of them passed. A shortreview course was given by CharlesMcLeod in the last week of June,and a makeup QualifyingExamination — Part I was given onJuly 1, 2000. Eighteen studentstook the examination, and five ofthem passed. Most of the passingstudents of the makeup examina-tion were borderline failures in theMay examination. Upon carefulreview of the results, we came tothe conclusion that, because of thehighly technical nature of thesubject material, it was very diffi-cult for students to pass theseexaminations without intensivetraining.

The mode of the 18 students forthe second course was substantiallydifferent from that of the firstcourse. They still worked veryhard. Most students showed up oneach weekday and all the optionalreview Saturdays.

However, the students were morerelaxed and self-confident fromhaving gone through the toughtraining process. They also seemedto have developed a bond with oneanother for having struggledthrough hardship together. Of allthe good things that happened inthe training courses, this is themost gratifying outcome for me asan instructor. This bond is vitallyimportant for a profession. It isthrough this type of mutual respectand cooperation that a professioncan work together and face up tothe challenges that will unavoid-ably present themselves, especiallyto a young profession such as this inKazakhstan.

A Qualifying Examination —Part II was given on July 29, 2000.The examination questions werechosen not just to test their under-standing of the rules for variousinsurances and pensions, but to test

their ability to solve practical prob-lems under simulated situations.All eighteen students took theexamination. Sixteen studentspassed. These students will be certi-fied as the first group of QualifiedActuaries in Kazakhstan as soon asthe final regulations concerningqualification have been adopted inCongress. (My understanding isthat the Congress has just passedthe final regulations on theQualification Process in December2000). These students have proventhemselves to be professionallycompetent to carry out actuarialfunctions under practical circum-stances. As their instructor, I amvery proud of them, and honoredand privileged to be associated withsuch a group of dynamic, youngprofessionals.

Some SuccessesThe greatest success lies in the factthat we have produced the firstgroup of properly trained actuarieswho are able to make independentdecisions to solve real life actuarialproblems.

Actuarial mathematics is verycomputation intensive. Instead ofteaching students all the tricks andshortcuts to circumvent computa-tions, as is typically done in theconventional approach, we empha-sized the use of financial calculat-ors up front in the first course,which have many of the financial

functions pre-programmed. By sodoing, we were able to avoid teach-ing a bag of tricks and concentrateon the ideas behind the computa-tions instead.

This concept was carried furtherin the second course, where most ofthe tests and examinations werecomputer based. With the use ofcomputers for each student in thiscourse, many problems and assign-ments given to the students werereflective of real life cases. In thetests and the examinations, morecomplicated questions were set,requiring students to set up pro-grams to solve real life problemsunder the time constraint of theexamination.

Some FailuresThe scope of material covered in thesecond training course includedindividual life and health insur-ance, group life and healthinsurance, property and casualtyinsurance, reinsurance, pension,social security, and investment.There was too much information fora three-week training course.

Because of the vast scope of thematerial, we were not able to find avery good text that covered all thematerial adequately. The text usedwas not well received by either thestudents or the instructors. In theend, we had to supplement thematerial with a lot of our own notesand materials from other sources.


(continued on page 6)

“Actuarial mathematics is very computationintensive. Instead of teaching students all thetricks and shortcuts to circumvent computa-tions, as is typically done in the conventionalapproach, we emphasized the use of finan-cial calculators up front in the first course,which have many of the financial functionspre-programmed.”

However, such supplements took upmuch extra time and energy of theinstructors. As a result, there werefewer tests given to the students inthe final week. This deprived themof part of the much needed drill ontheir computational skill. Somechanges are required.

Some students’ English skill wasnot adequate. Many studentsrequested translating the examina-tions into Russian. We were onlyable to translate the multiple choicequestions and not the computerprograms into Russian, because theExcel functions in Russian areslightly different from those inEnglish.

If we tried to translate thecomputer programs into Russian,we ran the danger of unintention-ally setting wrong questions for thestudents.One of thestudentsmight havefailed thecoursebecause ofthelanguagehandicap.However, even the partial transla-tion was achieved for a substantialprice.

Because of the short timinginvolved, many students wererequested to assist in translatingsome relevant texts and study notesinto Russian to help the Englishdeficient students to prepare for theFinal Examination.

Many students were sacrificingvaluable study time to assist thissmall group of students. The trans-lation, the typing, and the mergingof the translated text into thecomputer database created tremen-dous work for the support staff, andtook away much needed time for

reviewing and preparation of theFinal Examination papers.

Consequently, there was someconfusion on the final examinationday. On that day, two computerswere found to be not functional andhad to be replaced at short notice.Five diskettes containing the com-puter problems for some studentswere found to be defective andneeded to be replaced, with thequestions regenerated on examina-tion day. Consequently, the entireexamination was delayed by fiftyminutes. Such confusions could beavoided with less last-minuteadministrative burden and moreleisurely preparation.

Some CommentsThe training program hasachieved a level of success higher

than anybody’sexpectation.Kazakhstan needsto have qualifiedactuaries. So, weembarked on thistraining program.Initially, we hopedto be able to trainten qualified actuar-

ies. In the end, we got sixteenprofessional actuaries. We owe thesuccess to the dedication of thestudents. Anybody involved in thetraining program knows how hardthese students worked and howmuch sacrifice they made.

The scope of material covered inthe second course is far too exten-sive. By trying to cover too much,we may end up getting less. Forfuture trainings, the second courseshould be split into two separatecourses: one on insurance, and theother on pension, social security,and investment. Specific texts mayneed to be written for these courses.Time should be allotted both to the

preparation of the texts, as well asfor teaching the courses.

There is a critical shortage ofactuarial reference books inKazakhstan. Actuarial studentswho have questions on life insur-ance and pension search in vain forreference materials. This criticalshortage must be remedied as soonas possible. Unfortunately, all thesereference books are very expensive,many of them costing over US$100each. It is too expensive for theactuarial students here. But thestudents need these books and theknowledge they contain for theirdaily work. A library needs to be setup.

Concluding RemarksMany people contributed much tothe success of the project. Beside allthe consultants mentioned in theIntroduction, the administrativesupport has been tremendous. PaulPieper, Richard Webb, LauraZielinger, Barbara Hamilton, andAlma Kasymova provided invalu-able practical guidance andsupport. We had a good start. Muchfollow-up work is needed.

• A Kazakhstan Actuarial Association should be formed with all its by-laws and code of conduct, and standard of prac-tice, and its education/training program. The target should be to help the organization gain inter-national recognition in due course.

• Continual training is needed in the next three years to raise the standard of the current actuaries in Kazakhstan to the interna-tional level.


How We Helped Start the New Actuarial Profession in Kazakhstan in 2000continued from page 5

• Repeat of the current basic train-ing is needed to produce more fresh blood for the industry.

• There is a critical shortage of actuarial reference books in Kazakhstan. This critical short-age must be remedied as soon as possible. A library needs to be set up. Some planning for that is imminent.

Follow-upMany progresses have beenachieved since my previous report.

• The Kazakhstan Congress has approved all regulations regard-ing the Qualification procedure. The 16 actuaries are all certified.

• The Kazakhstan Actuarial Association (KAA) has been formed in September, 2000. Five

representatives of the KAA participated in the International Actuarial Association seminar in Hungary and made a good impression among other participants.

• An actuarial library is set up in the National Bank of Kazakhstan. Books are being acquired to beef up their collec-tion. This is not an easy task for a developing country such as Kazakhstan. International assis-tance will certainly be greatly appreciated.

• Further trainings are planned in 2001. There will be a repeat of the two basic courses respec-tively in March and June of 2001. There will be an advanced course in October 2001.

• Kazakhstan is now in the process of firming up its social security pension payment procedure and its insurance reserve regulations. Much professional guidance is needed.

• Kazakhstan currently does not have soundly constructed actuar-ial mortality and morbidity tables necessary for each area of actuarial calculations. The government actuaries are start-ing to collect data to construct such tables. However, there is a lack of experience on such con-structions. Much guidance is needed.

Michael Sze, FSA, FCIA, EA, ispresident of Sze Associates, Ltd. inWillowdale, Ontario. He can bereached at [email protected].


My Trip to Budapestby Norm Crowder

I n late September, Howard Bolnick and I represented the Society of Actuaries at a meeting in Budapest, Hungaryfor leaders of the actuarial societies of the emerging nations of Eastern Europe. This is one of a series of seminars

sponsored by the Advice and Assistance Committee of the International Actuarial Association(IAA) every 18-24months, to assist these new actuarial leaders in defining their educational and professionalism needs as their finan-cial services and social security systems evolve. The principal organizers of these conferences have been the Instituteof Actuaries staff and Chris Daykin, the U.K. government actuary.

In Budapest, there were some 26 countries represented from the Eurasian region. Some are associations thatare well into the development of their educational programs, such as Poland, Hungary, and Russia. Others have justbeen organized in the last 1-2 years. The newest was Kazakhstan which had just certified its first eight members asactuaries as the result of an actuarial training program organized and taught during the summer of 2000 by MikeSze and Charles McLeod, Canadian members of the Society.

This three-day seminar, which was hosted by the Hungarian Actuarial Association, consisted of reports from thevarious associations on the state of progress and issues they face in developing their educational and otherprocesses. These presentations yielded much useful discussion about ways to move forward on many issues. Somegroups intend to develop academic programs for teaching actuarial science. Others intend to facilitate use of theSociety and Institute exams. Most will likely develop a simplified system of basic actuarial education and examina-tions. All of these associations are ultimately seeking to meet the IAA’s minimum educational standards, which areeffective in 2005. The Society and Institute representatives were asked to offer insights and advice where helpful.

Other issues that were discussed were the development of a code of professional conduct and a disciplinaryprocess. In most of these countries, these matters are evolving slowly with the basic education process having a toppriority.

The participants considered this Budapest meeting a very worthwhile effort. The IAA plans to hold the nextsuch conference in spring or summer of 2002. I believe that the Society should continue to support these IAA confer-ences and to continue to build its early efforts to offer support and assistance to these emerging actuarial societies.

T he Actuarial Society ofMalaysia (ASM) hosted theSecond International

Professional Meeting of Leaders ofthe Actuarial Profession andActuarial Educators in Asia and thePacific in Kuala Lumpur, Malaysiaon January 12 to 14, 2001. Theconference was convened by theInternational Actuarial Association.Catherine Prime, Chris Daykin,Yves Guerard and Max Lacroixrepresented the IAA at the confer-ence. The theme of the conferencewas the profession of actuary andits role in protecting the publicinterest. The first meeting was heldin Singapore in 1995.

The Director of InsuranceRegulation of the Central Bank ofMalaysia, Zakaria Ismail officiatedthe conference. There were 85participants at the conference inclu-sive of 50 international participants

from 19 countries. Chris Daykinfrom the UK Government ActuaryOffice was the primary coordinatorof the conference, and the ASMassisted in making the localarrangements regarding the meet-ing venue facilities.

This conference was a significantevent for the actuaries in Malaysiaas this was the first internationalgathering of actuaries in Malaysia.There were quite a number ofparticipants who were visitingMalaysia for the first time and werequite impressed with the infra-structure development in thecountry especially having thetallest building in the world rightoutside the meeting location, whichis also the scene from the movie“Entrapment” with Sean Connery.

The conference aims to bringtogether from Asia and the Pacific arepresentative group of leaders ofnational actuarial associations and

those concerned with actuarialeducation, including supervisorsand regulators of financial institu-tions. The primary objectives of theconference are:

• The development of the actuarial association as a professional body

• Implementing a code of conduct and disciplinary procedures

• The role of the actuary and the actuarial associations in the reg-ulation and supervision of insur-ance companies and pension funds

• The role of actuaries in general insurance

• The establishment of the actuar-ial profession in developing countries.

The conference started with therepresentatives from each countrypresenting the development of theactuarial profession in their respec-tive countries.

It is interesting to see that someof the countries in Asia have theirown education systems towardsprofessional qualification as anactuary. As the actuarial professionexpands globally, there will need tobe some coordination by the IAAwith the actuarial organizations toprescribe some minimum standardsfor qualification for actuaries topractice outside their home country.


Actuarial Society of Malaysia Hosts IAA Meetingby Hassan Kamil

Peter Clark Mr & Mrs. Rob Brown Hassan Kamil Stuart LeckiePresident President President Past PresidentInstitute of Society of Actuaries Actuarial Society Actuarial Society Actuaries U.K. of Malaysia of Hong Kong

There were various workingpapers presented and breakoutdiscussions in the areas of pensions,health insurance, property/casualty,and professionalism. There weresome concerns about the profession-alism of actuaries in Asia as thequalifying bodies in the U.K. andU.S. do not have much resourcesdedicated to monitoring profes-sional standards outside their homecountries. Furthermore, most of thelocal actuarial societies in Asia donot have a formal disciplinaryprocess to enforce full compliancewith professional standards of prac-tice or code of conduct.

Another area of concern is thelack of proper teaching facilitiesand corporate support for studentswanting to pursue the qualifiedactuary designation.

I fail to understand why corpora-tions who have businesses in Asiawith head offices in the UnitedStates and United Kingdom do notoffer the same actuarial benefits tohelp their students in Asia pass theexams. There are multinationalinsurance companies in Malaysiawith limited or no support forstudents with the exam fees andstudy material.

The actuaries should dedicatemore effort to portray themselves tobe more than just technicianssitting in a smallcorner crunchingfigures forreserves andpremium rates.Unfortunately,due to lack ofactuaries in thetraditional roles,a large percent-age of qualifiedactuaries are still performing thecore traditional actuarial work inAsia.

As the number of qualified actu-aries increases, they ought to be inpositions involved in setting thestrategic direction of insurance

companies and financial manage-ment. Strong communication skill isa major asset for actuaries to suc-ceed in this area of the business,and we have the educational back-ground to help us accomplish thisobjective.

The senior actuaries have theresponsibility to pave the way forthe younger actuaries to succeed inthis profession as described in the“Big Tent” theory.

There are very few qualifiedactuaries in the teaching professionin Asia where students can easilyseek assistance with their exams.The working actuaries are too busyto dedicate any time to helping thestudents with their exams.

Thus, the rate of new qualifyingactuaries is very low in the SouthEast Asian countries. The samestudents would have better chancespassing the exams if they wereworking in the United States orUnited Kingdom. I believe the typeof work exposure does play a role inhelping the students with theexams.

The role of actuary in Asia inthe field of general insurance(property and casualty) is almostnon-existent. In some countries,unearned premium reserves andIBNR for general insurance do notrequire a qualified actuary to sign

off. A repre-sentativefrom theCasualtyActuarialSociety,LeRoyBoison,attended themeeting andinformed the

participants that the CAS is begin-ning to focus some effort towards“marketing” the CAS outside theUnited States. With this initiative,more students will be aware of theCAS exams, and the regulatorswill soon realize the importance of

casualty actuaries in generalinsurance.

The presentation on healthcarefinancing and health insurance byTom Snook from Milliman andRobertson provided an interestinginsight into the pricing mechanismof health insurance in the UnitedStates. The role of an actuary inhealth insurance is relatively newin Asia as the market for healthinsurance continues to grow rapidly.Lack of data and poor IT infrastruc-ture seem to be the primary issuesfacing most insurance companies inmanaging the profitability of theirhealth portfolio. Most companiesprice their health products based onreinsurance rates or by looking atwhat their competitors are charg-ing. To make matters worse, theproviders are not utilizing standardreporting codes for diagnosis andtreatment for actuaries to analyzethe claim experience for pricing andreserving.

Overall, the meeting was verysuccessful as the participants wereable to raise important matters fordiscussion on topics which are morespecific to the profession in Asia.The entertainment during the din-ners was also quite enjoyable asChris Daykin took the stage withthe band to sing a traditional Malayfarewell song.

Hassan Kamil, FSA, MAAA, is chiefoperating officer and actuary atAetna Universal Insurance in KualaLumpur, as well as president of theActuarial Society of Malaysia. Hecan be reached at [email protected].


T o put the 10th annual confer-ence of the CaribbeanActuarial Association (CAA)

under the motto “the emergence ofa new era” may seem an obviouschoice for the first conference inwhat many think was a new millen-nium. However, the organizerschose the speakers and topics care-fully to make the motto validbeyond this obvious meaning.

The conference covered severalareas which may be considerednovel. One is the demographicstrain on social security systems,and the privatization approachfollowed by many (primarily LatinAmerican) countries as an attemptto overcome the increasing difficul-ties perceived by the old age,disability, and health provisionmanaged by governments.

The presentation of RobertBrown, President of the Society ofActuaries, was one of the highlightsof the conference. Backed by theresults of extensive research on thetopic, Mr. Brown challenged theconventional wisdom that individu-ally funded retirement systems areimmune to shifts in demography,unpredictable behavior of economicparameters, and mismanagementor corruption.

Whether fully funding retire-ment systems is the more efficientway of organizing a country’spension system depends on

economic variableswhich are impossible topredict in the long run.But as a general rule, acentral proposition ofthis brilliant presenta-tion stated thatpre-funding will increasethe security of socialsecurity only if itincreases gross nationalsavings, which in turnhave to be invested toincrease worker produc-tivity — and ifpre-funding is the best way ofachieving this.

There is no historic evidence asto this. Hence, the speakersuggested that a more sensiblemeasure to stabilize retirementsystems can be found in an adjust-ment of retirement age, taking intoaccount productivity increases. Hisprojections for Canada showed that,assuming even moderate increasesin productivity, retirement age willnot need to rise at all.

Which is both pleasant andsurprising, considering thatcurrent retirement ages havemostly remained unchanged sincethe establishment of the respectivesocial security systems, when life

expectancy was considerablylower.

This exposition of general princi-ples was complemented by more

specific presentations on socialsecurity systems in the Caribbean,which sparked a discussion abouttheir future. Sekayi Campbellportrayed Jamaica’s NationalInsurance Scheme includingproposed reforms, while DerekOsborne gave a more generaloverview of the Caribbean’s socialsecurity systems.

Both pointed out challenges tothe system — which may translateinto challenges and opportunities tothe region’s life insurance industry.Touching challenges to non-lifeinsurance, Gerrard Lee-Innisscompleted the discussion bypresenting his thoughts on the roleof the P&C actuary in view of theJamaican Insurance Act.

Another field where insuranceindustries face a new era is enter-prise risk management, whichshould take into considerationnewer forms of reinsurance as well.This was well explained by JeffreyHarper from a US actuarial consul-tancy firm, who specified how toapproach assessing and addressingrisks from all sources; and by BryanWare and Lloyd Steinke, whoprovided the reinsurer’s view ofalternative risk transfer as amodern means of addressing enter-prise risks, and mentioned some


The CAA Annual Conference 2000by Peter Wrede

“Another field where insurance industriesface a new era is enterprise risk manage-ment, which should take into considerationnewer forms of reinsurance as well.”

other aspects of the new era in rein-surance. The topic was complement-ed by David Oakden, another actu-arial consultant who spoke aboutP&C reinsurance. This contributedto the general impression that rein-surance was an important issue atthis meeting. The presence of mostmajor reinsurers — though not asnumerous as during the InsuranceAssociation of the Caribbean’s (IAC)annual conference in May — con-firms the growing interest in theregion, an interest surpassed, itseemed, by consultants, who vastlyoutnumbered reinsurers by atten-dees. It has to be kept in mind thatwhile most reinsurers came fromabroad, many consultants camefrom local offices, but the fact thatone out of four attendees repre-sented a consultancy was remark-able to the outsider. The strong

presence of consultants and rein-surers also reminds us of the in-creased M&A activity in the region(this topic was covered by furtherpresentations), where reinsuranceoften is an important element offinancing.

Distribution systems is one of thefirst elements of insurance thatcome to one’s mind when thinking

about the new era the industryfaces. The conference covered thistopic with presentations by KenDavies and Lynne Woolridge, withparticular emphasis on theInternet, both as distribution chan-nel and as pivot for a new businessmodel: e-commerce is much morethan just advertising and sellingthrough the Internet. The impor-tance of this issue is confirmed bythe fact that it had been covered —from a different angle — at the IACconference as well.

Thus, the primary focus of theconference was in fact on thefuture, trying to anticipate theuncertainties the new era implies.But there were also sessions ofmore retrospective nature. Dr.Michel de Gourlard gave anepidemiologist’s account of thespread of AIDS and HIV in the

Caribbean,pointing outthe factorsdriving theepidemicand givingrecommen-dationsabout howto fight it.

Hisprojectionsof the

macroeconomic impact the epidemicwill have in five years in Trinidadand Tobago and in Jamaica showedhow urgent it is to find more effi-cient ways to fight the disease. Onthe other hand, Steve Stoute’sremarks on the regional life insur-ance AIDS experience showed thatthe insurance industry has notsuffered overly from the epidemic so

far, partly due to the measurestaken, primarily conservativeunderwriting.

There were also two contribu-tions of an altogether differentfocus. Marcia Tam-Marks gave adetailed insight into the insuranceindustry in the Dominican Republicthat showed the differencesbetween the Spanish-speakingCaribbean countries and the WestIndies, which go considerablybeyond language. Peter Clark, thepresident of the Institute ofActuaries, gave a comprehensiveand very enjoyable account of theactuarial profession spanning past,present and future, with particularemphasis on communication,culture and companionship.

As usual for a meeting of thisnature, there were a number ofsessions of more CAA-internalnature, like the students’ meeting onexamination techniques or the CAAStandards Presentation. And thisaccount would be blatantly insuffi-cient without mention of the socialevents that formed a vital part of theconference.

The nightly boat cruise alongBarbados’ shore was an unquestion-able highlight of the event also forthose who had taken it on previousoccasions, and the closing dinner atthe Bagatelle restaurant was asfestive as emotive. At that moment,whoever had not made up his mindbefore decided not to miss the nextCAA annual conference. I certainlywon’t.

Peter Wrede, Aktuar (DAV), is chiefactuary at General and Cologne Re Mexico. He can be reached [email protected].


Sect ion Web L ia ison Needed!Please contact Jim Toole ([email protected]) or Lisa Kuklinski-Ramirez([email protected]) if anyone is interested in doing this for the International Section.

T he Brazilian InsuranceIndustry is presently lobby-ing for the introduction of

Life Assurance Premium Relief. OurSao Paulo office was asked by theBrazilian Insurance association toassist in gathering some basic infor-mation regarding the existing taxrelief benefits that are present inother markets. To prepare thisreport, I surveyed the market situa-tion within nine markets: Argentina,Brazil, England, France, Germany,Japan, Korea, Singapore, and Spain.I thought that it might be useful toshare our findings with the readersof the Society of Actuaries Inter-national Section. Please note thatGeneralCologne Re’s official positionregarding the introduction of LAPRis neutral.

Within Brazil, England, andSpain, there is no deduction of lifeassurances premiums from taxableincome. So there is much to say forthese three markets, however, taxcredits are present within the restof the markets surveyed.

Within the French and Germanmarkets, rates of personal incometax are very high. However, lifeassurance has historically providedgenerous but complicated tax bene-fits. For these reasons, I have placedmy comments regarding these twomarkets at the end of the articleand have chosen to expand thecontent for these two markets inparticular.

1) Argentina: There is a benefit,but it is not very significant. Onecan deduct up to 1000 pesos fromthe base amount used to calculate

the tax. For the highest tax payers,this is equivalent an annual taxdeduction of just over 300 pesos.

US$ 1 = P 1

2) Japan:

US$ 1 = Y 123.75

In Japan, there are two layers in taxrelief. One is based on federal taxa-tion, the other on regional taxation.In respect of federal taxation, if theannual premium payment is:

• Equal to or less than JPY 25,000,then the full amount is deducted from taxable income

• Equal to or less than JPY 50,000, an amount which is equivalent to (annual premium * ½ + JPY 12,500) may be deducted

• Equal to or less than JPY 100,000, an amount which is equivalent to (annual premium * ¼ + JPY 25,000) may bededucted

• In excess of JPY 100,000, then a maximum of JPY 50,000 may be deducted from taxable income.

In respect of regional taxation, ifthe annual premium payment is:

• Equal to or less than JPY 15,000, then the full amount is deducted from taxable income

• Equal to or less than JPY 40,000, an amount which is equivalent to

(annual premium * ½ + JPY 7,500) may be deducted

• Equal to or less than JPY 70,000,an amount which is equivalent to (annual premium * ¼ + JPY 17,500) may be deducted

• In excess of JPY 70,000, then a maximum of JPY 35,000 may be deducted from taxable income

Both forms of tax relief may beapplied to annuity and individuallife insurance separately, i.e., onecan apply for a tax credit on twoseparate policies. However, themaximum tax relief that can bededucted from annual income maynot exceed JPY 100,000 in respectof federal tax or JPY 35,000 inrespect of regional taxes.

3) Korea: Only the protectionportion (i.e., not the savingselement of a universal life product,say) of any life assurance premiumup to KRW 500,000 is taxdeductible. However, it is requiredthat the beneficiary must either bethe owner of the policy or his/herlegal dependents.


A Worldwide Survey of Life Assurance Premium Relief (LAPR)

by Ronald Poon-Affat

US$ 1 = KRW 1,349.40

4) Singapore: Life assurancepremiums are tax deductible up to$5,000 pa, however, this figure isreduced to take account of contribu-tions towards the Central ProvidentFund. This contribution is presently30% of salary, however, it will beincreased to 40% when it is deter-mined that the Asian “crisis” is over.There is effectively no tax deductionfor persons earning in excess of$16,000 pa; which is the majority ofthe population.

US$ 1 = SGD 1.81

5) France

US$ 1 = FF 7.26

Contracts sold on an individualbasis

Tax relief on premium paid:Individuals receive an annualdeduction from their income tax of25% of annual life assurance pre-mium up to a maximum of 1,000 F+ 250 F per child.

Since 1996, this benefit has beenrestricted to only some classes ofcontracts (typically traditionalproducts that include a high firstyear commission).

Waiver of tax on investment gains: Up to 1996, all financial productsassociated with an insurance con-tract were exempt from personal andsocial security taxes, provided thatthe contract was in force for at leasteight years. Partial taxation wasapplicable upon early cancellation.

After 1996, financial productsassociated with life assurancecontracts were no longer exemptfrom social security taxes, the only

exemption being special unit linkedproducts (DSK Contracts), whichare 100% invested in stock ofFrench companies.

Waiver of Inheritance Tax:Up to 1993, there were no taxes onlife assurance benefits paid to benefi-ciaries. Both investment and purerisk products were completely taxexempt. The only qualifying rule wasthat the life assurance benefit shouldbe at least or greater than 4/3rds ofthe accumulated premium paid bythe insured. ( Règle Charasse )

In 1993, the 4/3rds rule wasabandoned. It was decided thatinheritance tax would only be

waived in respect of that portion oflife assurance benefit that was“purchased” by premiums paidbefore age 70.

Contracts sold on a groupbasisWith respect to other markets, espe-cially North American markets,France provides very generous in-centives for employers to purchasecoverage for their employees.

Life assurance coverage:Employers are allowed to purchaselife assurance on behalf of employ-ees. If the premium does not exceed3% of annual salary, this benefit iscompletely tax-free. For the purpose

of this calculation, annual salarycannot exceed eight times theYearly Average National SalaryEarnings.

A numerical example will helpshow how generous this benefitreally is: For an employee earning300,000 F per annum, the maximumtax free life assurance premium is300,000 * .03 = 9,000 F. Let’s considerthat a life policy is purchased at arate of 3 per mille, this would allowan employer to purchase a policy forthis employee of up to 3,000,000 F(9,000/.003) with no additional taxesbeing incurred.

In respect of premiums for lifeassurance contracts sold on a Group

basis that include retirement bene-fits, there are additional measureswhich allow even higher tax exemp-tion ceilings.

In 1993, a special law was intro-duced to provide fairer treatment toself employed persons that enabledthem to purchase life assurancewith the same tax advantages thatcompanies have for their employees.(Loi Madelin)

6) GermanyUS$ 1 = DM 2.16,Life assurance and Premium Tax:There are no indirect taxes or tax-like duties (such as VAT and StumpDuty) that are charged againstcontributions to life assurance.


(continued on page 14)

“Up to 1996, all financial products associatedwith an insurance contract were exemptfrom personal and social security taxes,provided that the contract was in force for atleast eight years. Partial taxation was appli-cable upon early cancellation.”

Life assuranceand IncomeTaxThe following rulescannot be explicitly

found within German tax law. Aseries of court decisions and theadministration rulings of several“Länder” tax authorities haveinfluenced current practice.Because of this, companies mayoften be frustrated to find that it isnot possible to obtain a firm posi-tion from either the tax authoritiesor tax consultants.

Premium PaymentUnder certain condi-tions and withincertain limits,contributions to lifeassurances are deducted fromtaxable income. Please note thatthere is no relief on premiums forunit-linked life assurance.

Contributions to the followingtypes of policies qualify for adeduction:

a) Term assurance that pays a benefit only upon death.

b) Annuities without a lump sum option.

c) Annuities with a lump sum option. However, the lump sum option cannot be exercised before the end of a 12-year period, and the annuity must be purchased via the payment of regular premiums.

d) Endowment assurances with regular contributions (at least for

five years) where the contract has a duration of at least 12 years and the Sum Assured is at least equal to 60% of the sum of premiums payable under the contract.

e) An endowment policy that in-cludes a critical illness benefit qualifies if (1) the endowment portion qualifies on a stand-alone basis, and (2) the critical illness component does not include more than five defined diseases.

Single premium contracts andshort-term life assurance policiesonly qualify for a tax deductionunder a) and b) mentioned above.

Premiums are only deductible if:

• Premium is paid to an insurance company with (1) German head office or management or (2) per-mission to conduct business in Germany (this also includes EU-offices doing cross-border business),

• They are not linked directly or indirectly to a loan.

Taxation of Life Assurance BenefitsEndowment & Universal life assur-ance: The taxation of benefitsdepends on the type of contract andthe circumstances under which thebenefits are paid. The interestelement of the savings componentmay not bear tax if:

1) The characteristics of the endow-ment policy include (a) regular

premium payments for at least five years (b) a term duration of at least 12 years and (c) a mini-mum sum assured of 60% of the total sum of premiums, and

2) If the interest is paid (a) on death or maturity, or (b) is offset against premiums, or (c) is only paid on surrender after more than 12 years.

Life assurance andInheritance / Gift TaxBenefits from a life assurancecontract that are paid to a personother than the policyholder aretaxed according to the rules of theinheritance and gift tax.

Inheritance tax becomes due onlyupon payment of the benefit andonly if the amount is greater thancertain tax-free limits. These tax-free limits are set quite high forspouses and other relatives.

Ronald Poon-Affat ASA FIA MAAACFA is a Vice President & Directorof GeneralCologne Re ([email protected]). He is responsible for Life &Health Clients in Brazil, Argentina,Chile, Uruguay, and Paraguay anddivides his time between his officesin Sao Paulo and Buenos Aires.


A Worldwide Survey of Life Assurance Premium Relief (LAPR)continued from page 13

T his past January, I had theprivilege and good fortuneto travel to Taipei and

Kuala Lumpur. The original reasonfor the trip was an EducationConference sponsored by theInternational Actuarial Associationthat was held in KL, January 12-14.The SOA then arranged a side tripto Taipei, sponsored by our ambas-sador there, Won How Lo.

For those of you who have notmet Won How, he is a mass ofenergy with ideas percolating out ofhim like a fresh spring. It was cer-tainly everything that I could do tokeep up with him and his carefullyscheduled itinerary.

Luckily, my wife, Andrea, and Istarted our visit to Taipei with aneasy day. One of my Ph.D. studentsfrom the University of Waterloo,Cary Tsai, who now works at theNational Taiwan University, waskind enough to show us the sights.We spent a marvelous half day atthe National Palace Museum wherehundreds of pieces of Chinese artand sculptures are on display. Wecould have stayed there all day, buthad the chance to lunch withProfessor Chiu-Cheng Chang of theChang Gung University. Chiu-Cheng and I often pretend to belong-distance runners, and it wasgreat to swap stories of pasttriumphs (mostly Chiu-Cheng’s).

Once I joined Won How Lo on hisitinerary, the time just flew past. Inless than three days, I visited theNational Insurance Regulators andthe Ministry of Health. In bothcases, I spoke with the most seniorofficials in the departments. WonHow Lo seems to know everyone. Ialso had the chance to give a lunch-eon presentation to the TaiwaneseLife Insurance Association. Finally, Imet and spoke with our members inTaipei. This was a very young and

energetic group who showed a keeninterest in the activities of the SOA.

I cannot move on to KL withoutalso noting our wonderful hostess,Shau Lo. She was a delight to bewith, and went out of her way toshow us the highlights of the city(and places to leave our Canadiandollars!).

Then we were on to KualaLumpur. This is a most amazing city.Downtown KL is one of the mostmodern city centers I have ever seen.It has a communication tower thatrivals (but is shorter than) Toronto’sCN Tower. But it also has the amaz-ing twin towers of the MalaysianPetroleum Company headquarters(the Petronas Towers). These are 82floor twin buildings, which many ofyou would have seen in the movie,“Entrapment” starring Sean Conneryand Catherine Zeta-Jones. We spentone hair-raising hour on a skybridgeat the 41st floor level.

I was also privileged to have myWaterloo colleague, Dr. Ken SengTan, who was born and grew up juston the outskirts of KL, at the sameconference. Whenever we had asufficient break time, Ken Sengshowed Andrea and me the localscenery. Malaysia, for those whohave not been there, is an ex-tremely beautiful country, evenwithout man-made buildings.

The conference focussed on theproblems that the developing worldhas creating and keeping actuarialtalent. Representatives of actuarialorganizations were on hand fromPakistan, India, Sri Lanka, Tibet,Vietnam, Thailand, Indonesia, and,of course, Malaysia. There were alsosenior actuarial representatives ofthe United Kingdom, NorthAmerica, Australia, Hong Kong,Taiwan, and Singapore.

I was able to announce the newSOA initiative whereby students in

develop-ingnationsare ableto payreducedexam feesand gettheirstudymaterialsat cost.Thisreceivedan enthusiastic response. I was alsoable to introduce the new ideas thatthe SOA is working on, with all ofthe English-speaking actuarialorganizations, to build a new inter-national syllabus and credentialthat, today, is called QRS —Quantitative Risk Specialist. Again,these ideas met with a warmresponse.

This conference was a hugesuccess, which was greatly due tothe hard work of its organizer,Hassan Kamil. The conference itselfwas sponsored by Bank NegaraMalaysia (who also hosted the mainbanquet) and was opened by thebank’s President.

Time just flew by, and soon it wasMonday morning, and time forAndrea and me to board our flightback to North America. We havesome great pictures of our adven-tures, and fond memories of ourtime in Taipei and Kuala Lumpur.

A sincere thank you to everyonewho made the trip such an out-standing success.

Robert L. Brown, FSA, ACAS, FCIA,IAA, is a professor at the Universityof Waterloo in Ontario. He is alsoPresident of the Society of Actuaries.He can be reached at [email protected]


My Trip to Taipei and Kuala Lumpur - Jan. 7-15, 2001by Robert L. Brown

The Petronas Towers

Editor’s Note: This article isreprinted with permission. It lastran in The European Life InsuranceReport, Volume 1, Issue 1, inAugust, 2000.

Introduction

I reland’s success as a favoredhome for cross-border lifeassurance companies has been

an undeniable fact in the 1990s.The creation of Dublin’s Inter-national Financial Services Centre(IFSC) by the Finance Act 1987sowed the seeds of a new financialservices industry, which has morethan achieved its employment andcommercial objectives through aninflux of new international lifeoffices. Many observers waited withtrepidation to see what the futureheld after the effective closure ofthe IFSC to new entrants at theend of 1999. Any fears in thisregard have been completelydispersed by the progressive deci-sions of the Irish authorities, nowenacted in the Finance Act 2000,which mean that the attractions ofIreland as a domicile for cross-border life companies have actuallyimproved notwithstanding theclosure of the IFSC.

The Recent PastThe IFSC has succeeded as a lifeassurance centre, in part throughthe excellent marketing by theIndustrial Development Agency(IDA Ireland) and in part throughtwo significant taxation incentives.Of these, the incentive that alwaysgrabbed the press headlines wasthe special 10% corporation tax ratefor IFSC companies. In realityhowever, far more important for lifeassurance companies that the 10%tax certificate went hand in handwith gross roll-up (GRU) on policy-holder funds. In other words, theassets attributable to IFSC policy-

holders grow without direct taxa-tion of the investment return.

This taxation result made theIFSC very appealing for investmentassurance business. Importantly, italso places the IFSC on a competi-tive footing with its closest EU andnon-EU competitors (Luxembourgand Isle of Man respectively). Forthis reason, increasingly more andmore start-up EU life offices havechosen Dublin IFSC as their HQ.

Part of the attractions of Dublin’sIFSC has been fiscal in nature, asdescribed above. Equally importantthough, is the modern regulatoryframework that exists in Ireland forlife assurance business. (The insur-ance regulatory framework in thisrespect is the same for both domes-tic and IFSC companies).

Ireland, like the U.K. (andCanada, Australia, USA, etc.) reliesupon the statutory appointed actu-ary within its regulatory framework.Its regulatory approach has formany years been “hands-off” withcompanies free to design and priceproducts, calculate reserves, andmanage their business with a frame-work underpinned by professionalactuarial responsibility, guidance,and a healthy degree of discretion.Products, therefore, are innovativeand modern (and do not requireprior regulatory approval); unitlinked products are long-established.The fact that Ireland has operated inthis way for many years also meansthat it has a pool of expertise andavailable third-party providers.

For many readers already accus-tomed to such freedom, this willobviously be seen as normal;however, the past experience inmany EU states — Germany, Italy,and Sweden, for example — hasbeen completely the opposite and,regardless of EC directive, regula-tors have been slow to change.Furthermore, to most practitioners,

the regulatory touch in Ireland,whilst being fully compliant withthe Framework directives, is alsolighter than in the U.K. andLuxembourg. Regulatory arbitrageis therefore both possible and real,supported by the right of establish-ment and the freedom to provideservices under the three EC LifeDirectives.

For all of these reasons, DublinIFSC has been attractive to compa-nies of Scandinavian, Italian, NorthAmerican, and British parentage,amongst others. Indeed, the growthand success of the IFSC sector issuch that the larger IFSC compa-nies are now writing more newbusiness than the long-established,largest domestic Irish insurers.

The PresentSeveral aspects to the 10% IFSCtax / GRU position were problem-atic, however, and would lead toconflicts in the longer term.

For one thing, GRU was nothingnew in a European context; indeed,it is the most prevalent treatmentamongst other EU member states.However, it was new for Irelandbecause “domestic” life companieswere taxed on a completely differ-ent basis: the so-called “I-E” basis,being the taxation of the excess ofinvestment income gains overexpenses. (Whereas GRU operatesnormally in conjunction with anexit tax, “I-E” provides an ongoingnet of tax return with often nofurther individual taxation payableon policy proceeds.) Importantly,this “I-E” regime is also the onethat still rules in Ireland’s closestand much larger neighbor, theUnited Kingdom.

These differences and discrimi-natory tax regimes for domesticcompanies on the one hand and forIFSC companies (prohibited fromwriting local business) on the other


New Tax Regime Extends Attractions of IrelandCentre for Cross-Border European Life Business

by Gary Boal

would always present conflicts froma structural EU perspective.

The 10% corporation tax issuewas resolved by the Irish govern-ment in July 1998 when itannounced a new unified 12.5% (yes− 12.5%!) corporation tax rate for allcompanies, IFSC and non-IFSC,from 2003. This changes involved astepped reduction from the standardrate of 32% in 1998 to 12.5% overfive years; the present 24% rate(year 2000) will reduce to 20% in2001 and 16% in 2002 before reach-ing its 12.5% end level in 2003.

This move was announced simul-taneously with the news that nonew IFSC companies would bepermitted after December 31, 1999.EU structural concerns werethereby placated.

The conflict of GRU versus “I-E”however still remained. The closureof the IFSC seemingly meant thatGRU was no longer possible (forfuture start-ups), thus halting theinflux of more cross-border lifecompanies. Evidently, this wouldbring to an end the marketing ofIreland as a centre for cross-borderEU life business — one of manyinitiatives that had led to a sus-tained economic boom (average GNPgrowth of over 8% pa since 1993)and “the Celtic Tiger” label. Or so itseemed ....

The FutureFortunately, the Irish governmenthad different ideas — which werefar more advanced, for example,than the U.K. government’s effortsfor the EU expansion of its lifeassurance industry, which so farhave foundered on the tax authori-ties’ insistence on a heavy-handed,bureaucratic regime (to counter thefear of tax avoidance). (The U.K.regime has very recently beenrelaxed, but it is too early to judgethe results.) Instead, in the IrishBudget on December 1, 1999, theMinister for Finance announcednew life assurance taxationarrangements which would alignthe treatment of the domesticmarket and the IFSC market — tothose of the IFSC market. Gross

roll-up is therefore coming in acrossthe board, in a move to break awayfrom the UK “I-E” model in favor ofadopting the European model.

The Legislative DetailUnder the Finance Act 2000, thenew GRU arrangements come intoeffect for (existing) domestic lifecompanies from January 1, 2001.More immediately, start-ups (domes-tic and international) as from April1, 2000 may elect to immediatelyapply the “new basis business” GRUtreatment. Existing business prior toJanuary 1, 2001 is unaffected andremains on the “I-E” footing,although some domestic companiesare already offering to convert exist-ing policies to the new GRU basis (asfrom January 1, 2001).

Hand in hand with the new GRUregime comes a new exit tax. Thisexit tax, applied to the policy gain,is triggered by specific “chargeableevents” (maturity, surrender,assignment, etc.) and will for Irishresidents be levied at the standardrate of income tax (22%) plus 3%.(The 3% surcharge is an attempt totake account of the compound inter-est benefits arising from the taxdeferral.) Crucially, though, thisexit tax applies to Irish resident orordinary resident policyholders.Thus, all business written by Irishlife offices on non-resident policy-holders will, from April 1, 2001 (atthe latest), benefit from GRU withno exit charge. Non-Irish policy-holders may still have a domestictax liability on this gain, butnonetheless, the regime does main-tain for such policyholders thepossibility of tax deferral.

The Improved AttractionsIn the new post-IFSC taxationregime, the attractions of Ireland asa HQ for cross-border Europeanbusiness are now even greater:

• Gross roll-up is now automatic, no longer conditional upon the IFSC tax certificate.

• The certainty of a 12.5% corpora-tion tax rate in 2003 (backed up

by a very extensive network of double taxation treaties).

• A modern, sensible regulatory approach which encourages modern and innovative products, minimizes bureaucracy and regu-latory interference and relies upon the well-tried appointed actuary regime.

• Automatic EU single passport for cross-border services business throughout the European Economic Area (EEA) and right of establishment, underpinned by the Third Life Directive.

• Close proximity and ease of access to Ireland’s closest and largest neighbor life assurance market — the United Kingdom

• The employment quota (previ-ously a condition of the IFSC tax certificate, and typically 20 staff within the first three years of operation) does not apply to non-IFSC start-ups, so full labor and operational flexibility is now available.

• Furthermore, financial assis-tance from the IDA is now avail-able for life company start-ups outside of Dublin — so “Ireland” no longer means “Dublin city centre” (costs).

One thing has not changed,however, and that is the fact thatthe EEA remains the largest singletrading block in the developedworld, with a combined populationof 380 million and a GDP largerthan that of the USA.

Ireland’s future as a centre forinternational life assurance busi-ness in the next decade and beyondtherefore looks assured.

Gary Boal, ASA, FFA, is a directorof Ball, Boal, and Shier, Ltd.,Dublin, Ireland. He may be reachedat [email protected].


Exam FeeDiscountsJust three months intothe implementation ofthe new exam feediscount initiative, theSociety of Actuaries hasapproved close to 600 applications. Theapproved applicant distribution is as follows:

47% People’s Republic of China

18% Malaysia

10% Philippines

7% Pakistan

5% Mexico

3% Trinidad and Tobago

The remaining 10% of the candidates comefrom various other nations such as Brazil,Colombia, Ghana, India, Indonesia, Jamaica,Jordan, Kenya, Lebanon, Nigeria, Romania,Russia, South Africa, Thailand, Turkey, SriLanka, and Zimbabwe. As of April 16, 2001,over 400 of the approved candidates hadregistered for the May exam session.

Program information can be found atwww.soa.org/eande/examdiscount_program. html or by contacting MarthaSikaras at [email protected].

APC in PakistanThe Associates Professionalism Course (APC)was conducted in Karachi, Pakistan inJanuary. Retired SOA staff member andtrained course facilitator, Linden Cole, trav-eled to Pakistan as part of a personal trip.With the coordination of efforts on the part of

SOA staff and more importantly, Pakistan AmbassadorNauman Cheema, 20 candidates successfully completedthis requirement for the Associateship designation. Wecongratulate Nauman as well as the candidates on thismilestone achievement.

APC in Hong Kong and ShanghaiSOA staff traveled to Hong Kong and Shanghai in Aprilin cooperation with the China Region Committee totrain local SOA members to facilitate the APC. Thecourse was administered to approximately 40 candi-dates in three separate sessions. Incoming APC facultymembers are Shu-yen Liu, KC Chan, Wilbur Lo,Raymond Li, Dominic Lee, Lynn Lin, Jason Yao, andProfessor Chan Wai Sum.

Regional Seminar in AsiaThe SOA’s China Region andSoutheast Asia Committees,with some recruiting assistancefrom the International SectionCouncil, have assembled a road-show covering a myriad oftopics. Speakers from North

America will join local speakers for a seminar series tobe held in Hong Kong, Taipei, Tokyo, and Kuala Lumpurover the dates of 4-11 June 2001. Topics will includeEmbedded Values; US GAAP; Asset LiabilityManagement; Product Design and Pricing; and HealthInsurance.

The organizing committee will be submitting a requestfor PD credit recognition from the SOA, making this aterrific opportunity for local candidates to earn PDcredit. Additional details can be obtained from our Hong Kong office coordinator, Pat Kum at patkum@ netvigator.com

Course 7 Seminar in SingaporeEfforts are also underway to schedule the second over-seas offering of the Course 7 seminar. The chosenlocation is Singapore on August 20-23, 2001.


SOA Strategic PlanThe SOA is in the process of develop-ing a new and comprehensivestrategic plan as part of the develop-ment of an overall strategicmanagement process. We stronglyencourage you to review the document and provide yourinput. You can find the draft on the web page atwww.soa.org/strategic/strategic_plan.html. You maydirect comments on the plan to [email protected].

We Need You!Coming this summer, ambassadorseverywhere will be asked to contributemortality tables from their region tothe SOA Table Manager, available freeon the SOA Web site. The new version3.0 with added features will bereleased in time for the annual meet-ing in October. You will be contacted inthe weeks to come and will be providedwith all the information necessary to

make this as simple as possible. Thanks in advance foryour help!

Big Improvement in Exam Results Pass rates for the latest E&E exams increased signifi-cantly over those for the May 2000 session, which wasthe first to feature the new exam system. For Course 1,the percentage of candidates passing the exam inNovember improved by nearly 50% from May (from 23%to 34%). Pass rates for Courses 2 − 4 approached or methistorical norms. And the pass rates for Course 5 andthe specialist Course 8’s were also in line with historicalpass rates on the comparable core and Fellowship levelexams.

As you know, the Society of Actuaries Education andExamination system was recently redesigned, and thefirst new exams were administered in May of last year.As might be expected, the transition from old to newwas a major challenge for many who participated in theinitial exam session. But November’s results clearly

indicate that our candidates demonstratedthey can meet that challenge.

Meeting OpportunitiesA reminder that many wonderful opportuni-ties to travel and meet your fellow SOAmembers are approaching.

Spring MeetingsMay 30-June 1: DallasJune 20-22: Toronto

Valuation Actuary SymposiumSeptember 13-14, Boston

Annual Meeting - meeting fee waivedfor all AmbassadorsOctober 21-24, New Orleans

ICA 2002March 17-22, 2002, Cancun, Mexico - the 27th

International Congress of Actuaries.Discounts are still available for those whoregister prior to September 30, 2001.

Ambassador NewsOne initiative for the year is to ensure thateach of the countries represented by anAmbassador also has a corresponding coun-try Web page at www.soa.org/links/amb.html. Ambassadors for countries for whichwe are missing country pages have beencontacted and provided with the necessarydocumentation to create the page. If youhave any questions on the initiative, pleasecontact Martha Sikaras at [email protected]. Ambassadors are also welcome toprovide updates for inclusion in thisnewsletter.


T here were several “firsts” forthe Society of Actuariesresulting from a presenta-

tion of the AssociateshipProfessional Course in Karachi,Pakistan, on January 23, 2001.First, this was the first time that anAsian language (Urdu, in this case)has been used in the small grouppart of the case study discussions.Then, this was the first time arequired Professionalism course ofthe SOA has been presented outsideof Canada and the United States.Finally, this was the first time thatthe Society of Actuaries haspresented a program of any kind inthe country of Pakistan.

Doing all this was made possibleby two facts. First, NaumanCheema, FSA, the SOA ambassadorin Pakistan, was available and will-ing to make all the advancearrangements. Then, I was going tovisit Pakistan for personal reasons,relating to a mission high school inthe northern part of the countrywhere I taught for two years in the1950s.

Since I was in the country

anyhow, and since I have experienceas a facilitator of both theAssociateship ProfessionalismCourse and the FellowshipAdmissions Course, it made senseto volunteer to lead the course.Twenty actuarial students inKarachi who were required to passit for Associateship signed up.Space was rented at the MarriottHotel in Karachi, and all the otherarrangements made. We were readyto go.

The Marriott hotel in Karachilooks a lot like a Marriott hotelanywhere, although the food in thehotel coffee shop has a nice touch ofthe exotic about it for Americans.Other differences are the excellentlevel of personal service from atten-dants on each floor, and the factthat you have to walk through ametal detector to enter the hotelunder the watchful eye of an armedguard. I had detected no wide-spread feeling of insecurity ordanger, so this seemed a little likeoverkill, but apparently there havebeen incidents in the past that ledto these precautions. It’s a good ideato be careful.

The twenty students were all ontime. After the introductory presen-tation, they pitched into the firstcase study on professional ethicswith enthusiasm. In addition tothree case studies, we had twovideos to show, but one proved to beincompatible with local equipment.Since both videos work on Americanequipment, I would have expectedeither both to work or neither towork on local equipment. So muchfor my logical skills.


The SOA Takes the Associateship ProfessionalCourse to Pakistan

by Linden N. Cole

This picture is taken from the Associateship Professionalism Courses in Karachi onJanuary 23, 2001.

Small groups hard at work on a case study at the Associateship Professionalism Coursein Karachi.

The entire day went well. Theparticipants were eager to learnand eager to discuss. They are animpressive and talented group, andwill be a credit to the actuarialprofession. In their culture, youngerprofessionals have traditionally notbeen encouraged to express them-selves in professional meetings,which is not so different from theActuarial Society of America in itsearly days.

It was a new experience for theseyoung students to be invited andencouraged to give their ideas. Ifthis can be continued there, it willbe to everyone’s benefit, becausetheir ideas are well presented andwell thought out.

At the end of the day, it was clearthat everyone had done well anddeserved to pass the course. Thismeans that they have met thisrequirement without having to travela long distance, a major benefit tothem. In terms of meeting educa-tional objectives, the word is that allfeedback has been extremely posi-tive. The students feel that they wereconfronted with real life situationsand learned a lot.

They suggest that in the future,the local person should do some

advance workwith the SOAcase studypeople (staff orvolunteers)and modifythe cases to begeared to thelocal situation.This might notbe as simpleas it sounds,since thosewho trained usin the casestudy methodwere adamant that each case studymust be something that reallyhappened, not something even partlyfictional. Still, the suggestion soundsworth pursuing.

It should be feasible for theSociety of Actuaries to present theAssociateship Professional Coursein other countries, providing thatsome conditions are met. First,there must be someone on the scenewho can work with the SOA officeand make the advance arrange-ments. Second, there must beenough participants to make theprogram worth presenting (20 iscertainly more than enough).

Finally, there must be a willingvolunteer available who is trainedand experienced as a case studyleader. It will be good if more ofthese programs can be tried in vari-ous places until they are no longerviewed as “experiments” but as anormal part of SOA operations.

As a postscript, I was asked tomake a presentation on Profession-alism to the Pakistan Society ofActuaries the next afternoon. Thisgroup is still very small, but willgrow rapidly as the current group ofstudents qualify as members of theSociety or of the British Institute.After the meeting, there wererefreshments and conversation, andthen the more senior membersadjourned with the speaker to arestaurant called “The Village.”There we enjoyed a sumptuousbuffet with a dazzling array of foodchoices, wonderful Pakistani musicwith harmonium, flute, and tabla,and views looking out across theArabian Sea. If any reader of thisarticle has the privilege of going toPakistan and meeting their actuar-ies, and they invite you to go todinner with them, DO NOT turndown the invitation! The experiencewill be an unforgettable one for you,too.

Linden N. Cole, FSA, MAAA, IAA, isa retired managing director of theSociety of Actuaries. He can bereached via e-mail at [email protected].


Here, this particular group is shown talking things over at a break from the case study.

A small group is hard at work as they discuss a case study.


1. Roll CallAugust ChowRandy MakinJim TooleMichael GabonHubert MuellerHans WagnerLisa Kuklinski-RamirezJorge NoronhaShumei KuoRonald Poon-Affat

And from the Society: LoisChinnock and Martha Sikaras.

2. October MeetingMinutesApproved by Council after correc-tion of spelling errors.

3. Treasurer’s ReportWith the increased Section fee, willthere be enough members tosupport thebudget?In the budget,1,700 memberswere assumed.As of today,there are 1,720registeredmembers perLois’ report. A more accuratemember count will be available onFebruary 1 when section dues aredue.

According to Lois’s data, the year2000 actual expenses appear to bewithin the budget for the 3rd and the4th quarters.

4. Membership DistributionA report from Lois shows that 20%of our Section members are fromoutside of the United States, whichis twice as high as that of the totalSociety membership (10%.) Lois willlook into the possibility of splittingthe membership by practice areawithin a country.

Should we conduct a survey tofind out which international areasare of interest to the members inNorth America? An electronicsurvey may be employed. TheCouncil will evaluate the need ofsuch data and decide in the nextmeeting.

5. Newsletter UpdateThe next issueof 24 pages willbe out earlyFebruary.Randy alreadyhas one articlefor the issuefollowing that.April 15 is thearticle deadline with an issue datein June. The issue after that shouldbe out in early October, in time forthe annual meeting.

6. Joint Seminar with Non-Traditional Marketing (NTM)Lisa reported that the topic is“International Start-up Workshop,”and it will be held on April 30 toMay 1 near the Chicago airport.The one-and-a-half day seminarincludes teaching sessions, a casestudy, and group presentations.Lisa is working with NTM to get

speakers and file for PD credits.For seminars outside of the U.S., alocal organization should take thelead, and the Section will sponsor.Lisa will contact Pat Kum for topicsof interest.

7. Spring and Fall SocietyMeetingsMikeprepared thefollowing tosummarizeour discus-sion:

1) “GAAPs Around the World”-Hans to coordinate/moderate.a) Can we make the expertiselevel “substantial,” i.e., recruit-ing very knowledgeable speakers. b) Can it be an open/interactive forum? i.e., a little less of the panel talking and more of the audience speaking and asking questions?

2) “Product Development Regulations”-Hubert to coordinate.a) Can this be made into some-thing other than a panel discussion?

3) “Fair Value and the IASC Insurance Reporting” — Mike to coordinate.

4) “Ambassador and International Issues Roundtable Discussion”-Workshop, Jim to coordinate and moderate.

Minutes of the ISN Council Conference Call January 23, 2000, 5:00 p.m. CST

a) Topics include:i) Ambassador Program of the International Section (duties, etc.)ii) International issues discussion

b) Audience/participants include:i) Ambassadors and potential ambassadorsii) Non-ambassadors of foreign actuarial organizationsiii) Persons working/desiring to work in foreign lands, e.g., high level executives

5) “International Enterprise Wide Risk Management” — Hubert & August to coordinate.a) Can this be made into something other than a panel discussion? How about a Case study?b) Please try to make this session for persons with substantial experience.

6) Section breakfast-Mike to coordinate.

8. Ambassador ProgramIn Japan: will try a co-ambassador-ship proposed by Hans and reviewat the end ofyear.

The councilwill reviewthe term limitof an ambas-sador.Proposal toassist in thedevelopment of a Chilean actuarialWeb site: will discuss in the nextmeeting.

Letter to ambassadors: encourag-ing them to submit local meetingsfor PD credit. August will send

some information to Hans to sendout.

9. Brazilian NewsletterRonald proposed that GeneralCologne Re (GCR) sponsor anInternet version of the Portuguesenewsletter.He’s offeringthe following:

1) GCR will pay for it.

2) Will have the right to place it on GCR Web site.

3) Ronald will undertake the mar-keting within Brazil and Portugal in advising the market when a new edition is available.

4) Will do this twice a year.

5) GCR has the right to place an ad only on the back page.

Lois advised that the SOA is cur-rently reviewing its Web policy. Shewill get back to us in the springregarding the policy, and the Councilwill discuss Ronald’s proposal atthat time.

10. Exam & Education August reported that there wouldbe a letter from SOA about reduc-ing the exam fees. This would beparticularly good for collegestudents.

11. International AccountingSeminarWe were contacted by the FinancialReporting Section about the idea ofan international accounting semi-nar. They do not have resources and

have turned the idea over to us.Rather than focusing on accountingper se, we may wish to turn it intoan international valuation seminar.

Council response was positive,and we will look into it for the fall.There are a few possible dates:

• The first week of December (the “Power Week” of SOA seminars,)

• After the Valuation Actuaries’ meeting, or

• After the annual meeting.

Lisa will coordinate, and Jim willassist.

12. “Table Manager”UpdateThe Table Manager by ComputerScience Section needs to beupdated. Jim suggested that atemplate be used and each ambas-sador or regional coordinator inputthe data directly. Where there is noambassador or coordinator, theCouncil may ask Carl Khor from JCPenney Life to help. We need datafrom insurance population, valua-tion and experience for life andannuity products. Steve Strommenand Jim will present the results atthe annual meeting. Mike Gabonhas also volunteered to assist inthis project.

13. Next MeetingIt will be held on April 23, Monday,at 6:00pm Eastern Time.



P reamble: To have a clear ideaabout the size of business, thepurchase power of the Egyptian

pound is slightly less than the US $.But the exchange rate is 3.86 Egyptianpounds to the dollar.

The structure of the insurance marketin Egypt:

1) The Egyptian Insurance Supervisory Authority: 28 Talaat Harb Street, Cairo

2) The Egyptian Insurance Federation : 10 Iran Street, Dokki, Giza

3) The Egyptian Society of Actuaries: 28 Talaat Harb Street, Cairo

4) Four public sector companies thatmay be privatized (all or any of them) in future: Misr, Chark, National and EgyptRe. They all handle life and non-life business.

5) Eleven private companies: Sues Canal, Mohandess and Delta:these are composite companies issuingboth life and non-life. Faronic Alico, Commercial International Life: Lifeonly; Faronic, Arab International, and Egyptian American: Non life; Egypt-ian International Medical InsuranceCo. (EIMIC); Egyptian Export Guar-antee; Cooperative Insurance Company

6) Other companies are seeking licenseto operate in either life or generalinsurance, as the current law does not allow composite companies.

Data for life business as ofend June 2000The amounts are in millionEgyptian Pounds (see preamble) Fiscal year July/June

Total amounts of insurancein-force ...................................29,468

Total premiums for year endingJune 2000 ......................................620Total claims for year ending June2000 ..................................................431

Individual GroupNumber of 616,063policiesAmounts of 7,349 21,989insurancepremiums 298 301(millions)

Individual GroupReserves 2,123 2,539(millions)

Analysis of Individual life1999/2000Whole lifeNumber . . . . . . . . . . . . . . . . . . . . .3,460Amounts (millions) . . . . . . . . . . . . .347Premiums (millions) . . . . . . . . . . . . . .8

TermNumber . . . . . . . . . . . . . . . . . . . . .5,533Amounts (millions) . . . . . . . . . . . . .654Premiums (millions) . . . . . . . . . . . . . .5

EndowmentsNumber . . . . . . . . . . . . . . . . . . .605,610Amounts (millions) . . . . . . . . . . .7,244Premiums (millions) . . . . . . . . . . . .280

Analysis Property andCasualty 1999/2000FirePremiums (millions) . . . . . . . . . . . .276Claims (millions) . . . . . . . . . . . . . . . .83

MarinePremiums (millions) . . . . . . . . . . . . .86Claims (millions) . . . . . . . . . . . . . . . .34

Inland TransportPremiums (millions) . . . . . . . . . . . . .12Claims (millions) . . . . . . . . . . . . . . . . .4

HullPremiums (millions) . . . . . . . . . . . . .51Claims (millions) . . . . . . . . . . . . . . . .76

AviationPremiums (millions) . . . . . . . . . . . . .77Claims (millions) . . . . . . . . . . . . . . .291

AccidentsPremiums (millions) . . . . . . . . . . . .185Claims (millions) . . . . . . . . . . . . . . . .19

EngineeringPremiums (millions) . . . . . . . . . . . .112Claims (millions) . . . . . . . . . . . . . . . .52

Motor CompulsoryPremiums (millions) . . . . . . . . . . . .125Claims (millions) . . . . . . . . . . . . . . .150

MotorPremiums (millions) . . . . . . . . . . . .374Claims (millions) . . . . . . . . . . . . . . .225

PetroleumPremiums (millions) . . . . . . . . . . . . .64Claims (millions) . . . . . . . . . . . . . . . .18

MedicalPremiums (millions) . . . . . . . . . . . . .33Claims (millions) . . . . . . . . . . . . . . . .33

Investment types June 2000Real EstateLife . . . . . . . . . . . . . . . . . . . . . . . . . . .77Property . . . . . . . . . . . . . . . . . . . . . .415Free . . . . . . . . . . . . . . . . . . . . . . . . . .90

EquitiesLife . . . . . . . . . . . . . . . . . . . . . . . .2,797Property . . . . . . . . . . . . . . . . . . . .2,425Free . . . . . . . . . . . . . . . . . . . . . . . .1,559

LoansLife . . . . . . . . . . . . . . . . . . . . . . . . . . .83Property . . . . . . . . . . . . . . . . . . . . . . .18Free . . . . . . . . . . . . . . . . . . . . . . . . . .65

Bank DepositsLife . . . . . . . . . . . . . . . . . . . . . . . .1,340Property . . . . . . . . . . . . . . . . . . . .2,278Free . . . . . . . . . . . . . . . . . . . . . . . . .706

Investment IncomeLife . . . . . . . . . . . . . . . . . . . . . . . .10.2%Property . . . . . . . . . . . . . . . . . . . . .8.6%Free . . . . . . . . . . . . . . . . . . . . . . . ..7.1%

Program for Development ofInsurance Personnel The current number of Egyptian actu-aries are only nine. They are Fellows orAssociates of the Society of Actuaries orthe Institute of Actuaries.

There are several universities thatoffer B.Sc., M.Sc. and Ph.D. degrees ininsurance.

Cairo University has B.Sc. degree inActuarial Science. About three gradu-ates may seriously continue forFellowship or academic degrees.

Final Comment: With the growth of theeconomy, insurance is expected to pros-per. This explains the entry of severalinternational insurers in the Egyptianmarket.

Mohamed F. Amer, FSA, AIA, IAA, ischief actuary at Amer ConsultingActuaries in Cairo, Egypt. He can bereached at [email protected]

Highlights of Egyptian Insurance Marketby Mohamed F. Amer, Ambassador for Egypt

Documents

I NTERNATIONALS ECTIONN EWS - MEMBER | SOA · Sikaras, who so diligently forwarded the articles as they came in. May you enjoy this newsletter and “read rightly.” Randy Makin,