The Kingman report on the Financial Reporting Council is out this morning. Much to discuss, but the findings on the regulation of the Institute are telling.
Briefly:
The Memorandum of Understanding between the FRC and the Institute, set up in the aftermath of the Morris review, ‘is not in practice proving an altogether effective arrangement’, specifically the FRC ‘has no powers with which to enforce any meaningful oversight of the IFoA’ (my emphasis).
HMT and the Government Actuary told the Review that it wishes to see effective regulatory oversight of the actuarial profession. If stakeholders wish to see effective independent oversight of regulation of the actuarial profession, suitable legal powers must be put in place to make this possible, and the review questions whether the FRC is the best body to do this.
The review recommends
- The Government, working with the PRA and The Pensions Regulator (TPR), should review what powers are required effectively to oversee regulation of the actuarial profession.
- Neither the FRC, nor its successor body, is best-placed to be the oversight body. The PRA (which employs around 80 actuaries) is a much larger repository of regulatory actuarial expertise than the FRC and would be best-placed to take on all the actuarial responsibilities currently vested in the FRC.