More Current IssuesDerek Newton
CIGI Seminar 17 May 2005
More Current Issues : Agenda
A word from our sponsors Some other recent current
issues What could/should we do
in the future?
More Current Issues : what is the Committee supposed to do?
Monitor current developments in general insurance Monitor external issues (including the work of other committees)
that might impact upon general insurance business/actuaries Report to/advise GI Board Formulate appropriate representations to external bodies Monitor the activities of other Practice Boards Support the GIRO and ECPD Committees Produce regular newsletter for members re current issues Liaise with other GI Committees (especially GI ARIC)
More Current Issues : who is on the Committee?
Derek Newton (Chairman) Peter Stirling (Secretary) Kate Angell David Costello Wendy Hawes Sheree Howard Tony Jordan Armoghan Mohammed Ruth Stephens Gerry Sweeney
and Laurence Townley
4 consultants 2 reinsurers 2 Irishmen 3 company actuaries 1 regulator 1 Institute/Faculty person
More Current Issues : recent index
Government and regulatory issues Solvency II International news Asbestos angle Compensation corner Other claims/legal issues Periodical payments and the Courts Act 2003 Other news
More Current Issues : at the Chairman’s request
Internet revolution APH – what next? Can we stop the “cycle"? Solvent schemes “Treating Customers Fairly” – what does this mean
for actuaries?
More Current Issues : Government and regulatory issues
OFT and DWP liability reviews Insolvency Directive EU Physical Agents (Vibration) Directive Single European reinsurance market Gender discrimination
More Current Issues : Solvency II
Dr Müller’s Casebook Solvency II
Protect policyholders Comparable and
transparent Match risks Simple Up to date Consistent with IASB Avoid extra capital costs
Phase 1 KPMG Report Sharma Report EU Report 2003
Overall solvency Three-pillar approach
useful Incentive to manage risks
More Current Issues : Solvency II
Pillar I
Target capital
Safeguard capital
Pillar II
Risk mgnt (rules)
Reg’y review(Co.
specific)
Pillar III
Encourage market
discipline
Accounting disclosure(fair value)
Policy-holder disclosure
Phase 2
More Current Issues : Solvency II
CEIOPS
IAISIFRS/ IAS
UK actuarial
profession
Groupe Consultati
fIAA
Other European actuarial
professions
Annette Olsen’s group
GI Solvenc
y II team Life
Solvency II
team
Comité Européen
des Assurances
ABI
Legal
Accounting
IT
Technical Pillar 1 issues Definition of Technical Provisions Prudence in outstanding provisions Discount rate Equalisation reserves Target capital
risk measure time horizon confidence interval
Operational risk Correlation
More Current Issues : Solvency II issues
CEIOPS First wave (June 2005)
MCR, SCR: SCR = MCR + buffer? Not prescriptive about internal models
Second wave (October 2005) Third wave (February 2006)
IAIS “Cornerstones” paper (February 2005)
8 cornerstones Prudent, risk sensitive, explicit, range of control levels, use of standard &
more personalised approaches
More Current Issues : Solvency II recent papers
Groupe Consultatif GlossaryEC Started drafting directive Possible amendment to framework to consultation
Thinking behind Solvency II, including: SCR 0.5% probability of ruin Provisions at “best estimate” plus risk margin with 75% confidence
Outline of framework directive Lamfalussy
2010?
More Current Issues : Solvency II recent papers
More Current Issues : “Compensation Corner”
Man attacked by Dyson Woolf attacked by Dyson Conker trees and lime trees Candles Tobacco
More Current Issues : claims/legal rulings (and other news)
Exxon Valdez removal of debris/LMX spiral
WTC, Enron, WorldCom and laddering
Hurricanes, earthquakes and tsunami
NHS recoveries The next latent claim
Glaucoma from PC use Deafness from iPods
More Current Issues : what could/should we do in the future?
Main product currently the Current Issues Newsletter Does it meet anyone’s needs? How should it be enhanced?
What else should we be covering? what has the greatest impact on the market, on consumers, or
on us as general insurance actuaries? on what do we have something to contribute ?
How best to identify issues as (or even before) they appear over the horizon?
How best to review/deal with these issues?
More Current Issues Derek Newton
CIGI Seminar 17 May 2005