The Treasury Committee in the UK has recommended that the Government Actuary's Department should continue to play a role in the supervision of life insurance firms even after the end of its contractual relationship with the regulator.
In its report to the Treasury following two recent select committee hearings at which government actuary Chris Daykin and economic secretary to the Treasury Melanie Johnson were called as witnesses, the Treasury Committee warned that the relationship between GAD and insurance firms’ appointed actuaries could be affected by the transfer of its actuarial staff to the FSA.
Daykin told the committee he was “in continuing discussion with the FSA about how we can maintain something of the special relationship which existed before between the Government Actuary and the appointed actuaries of the insurance companies”.The Treasury Committee also recommended that Parliament should be regularly informed about the condition of the life insurance industry, particularly in light of the recent problems affecting Equitable Life.
GAD was also considered to be “a rather under-utilised resource of which the government could make more use of in future”, recommending the government to identify areas where the department could usefully make regular reports to Parliament.The Treasury Committee said if GAD’s expertise was fully exploited in future it would help it continue to attract high-quality actuarial staff in future.
GAD directing actuary Andrew Young said the department was pleased with the positive feedback it had received from the Treasury Committee.
Young added: “We are in discussions with the FSA about the possibility about the Government Actuary’s Department having some continuing involvement in the life insurance business but it is at a very early stage.”
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