The Australian Prudential Regulation Authority (APRA) has outlined proposals to improve the relevance of insurers’ appointed actuaries.

It has released a discussion paper, in part triggered by concerns actuaries are increasingly focused on compliance issues instead of providing strategic advice to boards and management.

“APRA’s objective… is to explore the potential to significantly improve the functioning of the appointed actuary role and ensure it remains fit for purpose,” the regulator says.

“These proposals have been informed by thoughtful preliminary feedback from actuaries and the insurance sector more broadly.”

The main proposals are introducing a purpose statement for appointed actuaries; implementing a clear actuarial advice framework; managing potential conflicts of interest; improving reporting requirements; and simplifying prudential standards.

“The proposals in this paper require changed behaviour from insurers, actuaries and APRA if the full benefits are to be realised,” the regulator says.

“Through combined effort to effectively implement the proposed changes, APRA expects the insurance industry will be in a stronger position in the future.”

The Actuaries Institute has welcomed the move.

“In some areas, this critical strategic and prudential role has become increasingly compliance-focused, and we look forward to working with APRA, the insurance industry and the profession to enable increased capacity for strategic advice,” President Lindsay Smartt said.

Submissions for the discussion paper close on September 21.

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