Institute and Faculty of Actuaries
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The Institute and Faculty of Actuaries is the professional body which represents and regulates
actuaries An actuary is a business professional who deals with the measurement and management of risk and uncertainty. The name of the corresponding field is actuarial science. These risks can affect both sides of the balance sheet and require asset man ...
in the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
.


History

The Institute and Faculty of Actuaries came into being on 1 August 2010 as a result of the merger of the
Institute of Actuaries The Institute of Actuaries was one of the two professional bodies which represented actuaries in the United Kingdom. The institute was based in England, while the other body, the Faculty of Actuaries, was based in Scotland. While the Institute an ...
and the
Faculty of Actuaries The Faculty of Actuaries in Scotland was the professional body representing actuaries in Scotland. The Faculty of Actuaries was one of two actuarial bodies in the UK, the other was the Institute of Actuaries, which was a separate body in Englan ...
in Scotland after voting members of both bodies voted to merge their respective organisations in a ballot held on 25 May 2010.Actuarial Profession press release


Structure and governance

The
Queen Queen or QUEEN may refer to: Monarchy * Queen regnant, a female monarch of a Kingdom ** List of queens regnant * Queen consort, the wife of a reigning king * Queen dowager, the widow of a king * Queen mother, a queen dowager who is the mother ...
in Council granted an amendment effective 1 August 2010 to the Charter of the Institute of Actuaries in terms that converted it to the Charter for the Institute and Faculty of Actuaries. The
asset In financial accountancy, financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value ...
s, liabilities and membership rights of the Faculty of Actuaries in Scotland were transferred on this same day to the Institute and Faculty of Actuaries and the Charter of the Faculty of Actuaries in
Scotland Scotland (, ) is a country that is part of the United Kingdom. Covering the northern third of the island of Great Britain, mainland Scotland has a border with England to the southeast and is otherwise surrounded by the Atlantic Ocean to the ...
was surrendered. Essential elements of the merger arrangements, such as the Scottish constituency and its representation on the Council of the Institute and Faculty of Actuaries, are incorporated into the new governance documents. Authority for the governance, control and strategic direction of the Institute and Faculty of Actuaries sits with the Council which delegates to various boards, committees and staff.Actuarial Profession


President

The President of the Institute and Faculty of Actuaries (IFoA) is Tan Suee Chieh. His term began on 17 June 2020. He succeeded John Taylor, who now takes up the title of Immediate Past President. The President-elect is Louise Pryor.


Research and member support

Actuaries work in a number of different practice areas: enterprise risk management, finance and investment, general insurance, health and care, life insurance and pensions. Each of these areas is supported by an executive committee which oversees the development of knowledge and research within its own area, provides members with CPD opportunities and takes forward a programme of practice-specific research. The committees also foster a sense of community among actuaries practising in their particular field of expertise.Acuarial Profession
*
Enterprise risk management Enterprise risk management (ERM) in business includes the methods and processes used by organizations to manage risks and seize opportunities related to the achievement of their objectives. ERM provides a framework for risk management, which typic ...
- helping companies understand and manage risk in line with their business objectives * Finance and investment - for actuaries working in banking, corporate finance and investment *
General insurance General insurance or non-life insurance policy, including automobile and homeowners policies, provide payments depending on the loss from a particular financial event. General insurance is typically defined as any insurance that is not determine ...
- rating products, advising on reserves and capital requirements, and similar general insurance activity * Health and care - a growing area in both the private and public sectors as health provision models evolve to meet changing needs *
Life insurance Life insurance (or life assurance, especially in the Commonwealth of Nations) is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death ...
- a traditional area for actuaries, with the roles evolving as life insurance itself evolves *
Pension A pension (, from Latin ''pensiō'', "payment") is a fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work in the form of periodic payments ...
s - actuaries play a key role in advising companies on all manner of pension schemes and structures.


Regulation

The Institute and Faculty of Actuaries sets examinations, continuing professional development, professional codes and disciplinary standards. After the 2005 Morris Review raised concerns that the (then) Institute of Actuaries had failed to keep its syllabus and teaching materials up to date, the result of ‘entrenched commercial interests’ hindering the development of the Institute's education policy, the Review proposed a regime of independent oversight of the Institute's regulation of the profession by the
Financial Reporting Council The Financial Reporting Council (FRC) is an independent regulator in the UK and Ireland based in London Wall in the City of London, responsible for regulating auditors, accountants and actuaries, and setting the UK's Corporate Governance and ...
. As a result, the FRC assumed responsibility for oversight of the actuarial profession and the independent setting of actuarial technical standards with effect from May 2006.Actuarial Profession
In 2018 the Kingman Review found that the FRC's oversight of the actuarial profession had not in practice proved 'an altogether effective arrangement'. It was based on a voluntary understanding, and the FRC had no powers with which to enforce 'any meaningful oversight of the IFoA'. The UK Treasury, supported by the Government Actuary, told the Review they wished to see effective regulatory oversight of the actuarial profession., and the Review recommended that 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'. Alongside this, a report by financial economist Kevin Dowd claimed that the Institute 'had allowed itself to be used as a mouthpiece for ERM industry leaders to broadcast their misunderstanding of their products in pursuit of their commercial interests' following a review by the UK Prudential Regulation Authority in 2018 concluding that firms investing in equity release mortgages were not properly reflecting the cost of the no-negative-equity guarantee. The UK satirical magazine
Private Eye ''Private Eye'' is a British fortnightly satire, satirical and current affairs (news format), current affairs news magazine, founded in 1961. It is published in London and has been edited by Ian Hislop since 1986. The publication is widely r ...
also carried a story alleging that the PRA's investigation had been delayed by 'years of lobbying' from firms including accountants
KPMG KPMG International Limited (or simply KPMG) is a multinational professional services network, and one of the Big Four accounting organizations. Headquartered in Amstelveen, Netherlands, although incorporated in London, England, KPMG is a net ...
and
Ernst & Young Ernst & Young Global Limited, trade name EY, is a multinational professional services partnership headquartered in London, England. EY is one of the largest professional services networks in the world. Along with Deloitte, KPMG and Pricewaterh ...
, and by the Institute itself.


Education

Fully qualified actuaries are Fellows and may bear the designations FIA or FFA while Associates bear the designations AIA or AFA. Practising certificates are issued to certain actuaries for their statutory role in the financial management of life offices and most pension schemes. The Institute and Faculty of Actuaries continues the former Institute’s role as a designated professional body, under the
Financial Services and Markets Act 2000 The Financial Services and Markets Act 2000c 8 is an Act of the Parliament of the United Kingdom that created the Financial Services Authority (FSA) as a regulator for insurance, investment business and banking, and the Financial Ombudsman Serv ...
, which enables it to license firms that are managed or controlled by actuaries, allowing them to carry on certain limited regulated activities.


UK Practice Modules

''For students working in the UK only'' * P1 - Health and Care * P2 - Life Insurance * P3 - General Insurance * P4 - Pensions * P5 - Finance * P6 - Investment An actuarial qualification from the Institute and Faculty of Actuaries consists of a combination of the completion of various examinations and courses. The examinations are split into four sections: core technical, core applications, specialist technical, and specialist applications. In addition to examinations and courses, it is required that the candidate both complete at least three years work as an actuary and to qualify as a Fellow.Actuarial Profession


Qualification

An actuarial qualification from the Institute and Faculty of Actuaries consists of a combination of the completion of various examinations and courses. The examinations are split into four sections: Core Technical (CT), Core Applications (CA), Specialist Technical (ST), and Specialist Applications (SA). Study material for the examinations is usually obtained through the official bookshop of the Institute of Actuaries Bookshop

/ref> or through the Actuarial Education Company (ActEd),Acte
The Actuarial Education Company
/ref> a subsidiary of BPP Actuarial Education Ltd. In addition to examinations and courses, it is required that the candidate complete at least three years work as an actuary to qualify as a “Fellow of the Institute and Faculty of Actuaries” (FIA) How to Register as a Student a student
The Actuarial Profession, Faculty and Institute of Actuaries, 2011-01-25
/ref>


Core Examinations

The Core Technical section consists of 8 written exams and a “Business Awareness Module,” CT9. These are usually sat first by a candidate and include the underlying mathematics involved in actuarial work as well as an introduction to financial and economic issues. These are also the most common exams for which candidates may get exemptions. The Core Applications section consists of a 6-hour written exam and two practical exams which focus on the application of concepts learned and a candidate's ability to communicate actuarial concepts to others.


Specialist Examinations

The Specialist Technical section is the first stage the candidate has a choice of which exams to take. The candidate chooses two from the various actuarial specialist subjects i.e. Health and Care, Life Insurance, General Insurance, Pensions, Finance or Investments and further technical knowledge on said subjects is attained. The Specialist Applications section allows the candidate to choose one area for which they take the SA paper and attain full Fellowship; leading to many referring to this as the “Fellowship paper.” However, as the rules on the ordering of examinations were relaxed, this examination may be taken before taking some earlier examinations resulting in candidates qualifying on other papers.


List of Examinations


Core Technical Stage

* CM1 - Actuarial Mathematics * CM2 - Financial Engineering and Loss Reserving * CB1 - Business Finance * CB2 - Business Economics * CB3 - Business Management * CS1 - Actuarial Statistics * CS2 - Risk Modelling and Survival Analysis


Core Applications Stage

* CP1 - Actuarial Practice * CP2 - Modelling Practice * CP3 - Communications Practice


Specialist Principles Stage

* SP0 - Alternative Specialist Principles(not examined) * SP1 - Health and Care * SP2 - Life Insurances * SP4 - Pensions and other Benefits * SP5 - Investment and Finance * SP6 - Financial Derivatives * SP7 - General Insurance - Reserving and Capital Modelling * SP8 - General Insurance - Pricing * SP9 - Enterprise Risk Management


Specialist Advanced Stage

* SA0 - Research Dissertation Specialist Applications * SA1 - Health and Care * SA2 - Life Insurance * SA3 - General Insurance * SA4 - Pensions and other Benefits * SA7 - Investment & Finance


Qualifications


Certificate in Financial Mathematics

The Certificate in Financial Mathematics is issued by the Institute and Faculty of Actuaries.


Diploma in Actuarial Techniques

The Diploma in Actuarial Techniques is sent to students on completion of all Core Technical stage subjects: CT1, CT2, CT3, CT4, CT5, CT6, CT7, CT8 and CT9.Certificates for Students
The Actuarial Profession, Institute and Faculty of Actuaries, 2011-01-25
/ref>


Certificate in Finance and Investment

The Certificate in Finance and Investment is sent to all students who complete or are exempted from CT1, CT2, CT4, CT7, CT8, CT9 and CA1.


Associate of the Institute and Faculty of Actuaries

On completion of all of the Core Technical and Core Applications exams, then students can become Associate members of the Institute and Faculty of Actuaries and gain the right to describe themselves as an actuary and to use the letters AIA or AFA provided that they have two years of work experience as an actuary.Associate membership
The Actuarial Profession, Institute and Faculty of Actuaries, 2011-01-25
/ref>


Fellow of the Institute and Faculty of Actuaries

On completion of all of the Associate exams, two of the Specialist technical subjects and one of the Specialist applications subjects, students can become Fellows of the Institute and Faculty of Actuaries and to use the letters FIA or FFA provided that they have three years of work experience as an actuary.Fellow membership
The Actuarial Profession, Institute and Faculty of Actuaries, 2011-01-25
Alternative routes to Fellowship are: * By vote of the membership * By mutual recognition of qualifications * Honorary Fellow


Qualifications linked to the IFoA


Chartered Enterprise Risk Actuary (CERA)

Associates and Fellows gain a further qualification, CERA, if they pass the ST9 Enterprise Risk Management exam.Obtaining CERA
The Actuarial Profession, Institute and Faculty of Actuaries, 2011-01-25
/ref>


Certified Actuarial Analyst

This new qualification will be obtained after passing 6 modules. Module 0 tests basic mathematics (with a its syllabus based on the Foundational ActEd Course written by ActEd (The Actuarial Education Company)), Modules 1-4 tests parts of the CTs and Module 5 tests audit trails (CA2).


Examination fees


Two-tier charging structure

The Institute and Faculty of Actuaries operates a two-tier charging structure for its examination fees: full rate and reduced rate. The reduced rate is at a discount to the full rate. To qualify for a reduced rate, the student member must have an income which is less than £7 140 per annum regardless of where you live or work Student members from a list of specific countries can purchase educational materials from Acted at a discount.


Examination fees

Rates as at 2017 are as follows:


=Full rate

= CT stage: £220 per subject. ST stage: £305 per subject. CA1: £595. CA2: £450. CP3: £310. SA stage: £305 per subject.


=Reduced rate

= CT stage: £115 per subject. ST stage: £155 per subject. CA1: £300. CA2: £260. CP3: £160. SA stage: £155 per subject.


Public policy submissions


UK government's Shortage Occupation List


Shortage Occupation List background and purpose

When occupations are placed on this list, UK employers have less restrictions for recruiting candidates directly from overseas; specifically from outside the EU. They would no longer need to complete a residency test, which involves demonstrating that a search for suitable candidates within the UK in the first instance has been unsuccessful.


Actuaries added to the shortage occupation list

In November 2011, actuaries were added to the UK government's Shortage Occupation List. The actuarial profession had argued for actuaries' inclusion on this list.


Removal from shortage occupation list

Actuaries were removed from the shortage occupation list in April 2013 following a consultation by the UK government's Migration Advisory Committee in January 2013. On this occasion, the actuarial profession made no submission either way; neither for nor against a shortage of actuaries.


Statistics on shortage occupation list migrants

Despite the actuarial profession advising a shortage of actuaries, freedom of information requests to the
UK Border Agency The UK Border Agency (UKBA) was the border control agency of the Government of the United Kingdom and part of the Home Office that was superseded by UK Visas and Immigration, Border Force and Immigration Enforcement in April 2013. It was forme ...
(now superseded by
UK Visas and Immigration UK Visas and Immigration (UKVI) is a division of the Home Office responsible for the United Kingdom's visa system. It was formed in 2013 from the section of the UK Border Agency that had administered the visa system. History The then Home Secret ...
) have revealed that only 19 people emigrated to the UK to work as an actuary via the shortage occupation list from 1 November 2011 to 12 March 2013. The countries of origin for these migrants were as follows:
Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
(6),
China China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
(1),
India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
(4),
Malaysia Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...
(1),
South Africa South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring countri ...
(5) and
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
(2). The salaries of these migrants ranged from £42,500 (actuary) to £186,261 (chief actuary). The average salary was £82,042. Despite
Solvency II Directive Solvency II Directive 20092009/138/EC is a Directive in European Union law that codifies and harmonises the EU insurance regulation. Primarily this concerns the amount of capital that EU insurance companies must hold to reduce the risk of insol ...
work being cited as a reason for a shortage of actuaries, only one migrant had the description "Solvency II" in their job title.


References


External links


Actuarial Profession websiteActuarial Profession eshopActuarial Profession Libraries
{{Authority control Actuarial associations
Actuaries An actuary is a business professional who deals with the measurement and management of risk and uncertainty. The name of the corresponding field is actuarial science. These risks can affect both sides of the balance sheet and require asset man ...
2010 establishments in the United Kingdom Organizations established in 2010