Stuart Wason is a semi-retired FCIA who is nearing the end of his term as Chair of the International Actuarial Association’s (IAA) Insurance Regulation Committee (IRC). We sat down to discuss the importance of his role, the IRC’s top contributions and challenges, and implications for Canadian actuaries.
How did you become involved with the IAA and the IRC in particular?
My involvement with the IAA began in 1999 when I was President-Elect of the CIA. In 2004 I helped lead an IAA team that developed a publication for the International Association of Insurance Supervisors (IAIS) entitled “A Global Framework for Insurer Solvency Assessment.”
The report explored the elements needed for an international capital standard for insurers and provided a “best practices” approach for supervisors. My career took me away from the IAA for several years after assuming a senior role with the Office of the Superintendent of Financial Institutions (OSFI) in 2007 – a position that allowed me to become more heavily involved in various IAIS committees.
Following my retirement from OSFI in 2016, I was invited to rejoin the IAA and the IRC as part of a team of CIA members guiding the international actuarial profession’s response to regulatory issues. The world of insurance financial reporting has become more internationally integrated, and my role has been to help guide and develop the relationship between the profession and regulators at the global level in a rapidly changing environment.
I have always enjoyed meeting actuaries from around the globe and learning from their actuarial and regulatory perspectives. I have often felt that should I need assistance in a foreign jurisdiction, there would always be an actuary there with whom I could connect.
For our readers who may not be familiar with the work of the IAA or your committee, can you explain its role and importance?
While the CIA is the professional association of Canadian actuaries, the IAA is the global association of actuarial associations, including the CIA.
One of the very active IAA committees is its Insurance Regulation Committee (IRC), comprised of actuarial members from across the globe. The purpose of the IRC is to promote the role of actuaries with respect to regulation and supervision, to support the development of international actuarial principles and frameworks for regulation and supervision of insurers, and to provide a forum for discussion of supervision/regulation issues and approaches.
The IRC has the lead role in connecting and building closer IAA ties with the International Association of Insurance Supervisors – of which OSFI (Canada’s own supervisor of federally regulated banks, insurers, and pension plans) and the Autorité des marchés financiers (AMF) are members.
It has become increasingly crucial for the actuarial profession to have a global voice, especially when contributing actuarial perspectives on a variety of issues, such as insurer capital standards, risk management, climate-related risks, and pandemic-related risks – to name just a few.
What are some of the greatest accomplishments achieved by the IRC?
A key achievement made by the IRC in recent years has been the strengthening of ties between the IAA and the IAIS – one of the IAA’s most important supranational relationships. A few examples of the progress made include:
- The IAA participates regularly at various IAIS public forums. IAA and IAIS leadership meet routinely several times a year, resulting in greater co-operation on key work projects such as insurance capital standards, climate risk, ORSA, and the pandemic.
- Collaboration has resulted in the signing of a partnership agreement between the Sustainable Insurance Forum (SIF), a group of insurance supervisors focused on climate-related risks, and the IAA. The CIA’s own, Micheline Dionne, FCIA, has assumed the relationship manager role for SIF.
- Supervisory capacity building organized with the support of the IAIS and under the direction of the Access to Insurance Initiative (A2ii) now includes actuarial trainers from the IAA on a regular basis.
- Building an online library of IAA publications showcasing the work of actuaries on a variety of risk-related topics. This risk book library, accessed by both actuaries and insurance supervisors, includes more than 20 topics written by actuarial experts from around the globe.
- The IRC meetings allow IAA member associations an opportunity to share news of supervisory developments in their jurisdictions and to support the development of international actuarial principles and frameworks for the regulation and supervision of insurers.
What should Canadian actuaries know about the work of the IRC?
First and foremost, as the work of the IRC involves insurance supervision and regulation, Canadian actuaries can be proud of their insurance supervisory framework (e.g., as established by OSFI and AMF for example) and the progressive nature of the relationship in Canada between supervisors, industry, and the actuarial profession.
Our collective achievements over many years in developing financial condition testing (e.g., DCAT), financial reporting (e.g., CGAAP), modern capital standards (e.g., LICAT and MCAT), and effective risk-based supervision are well recognized. However, many challenges lie ahead, and Canadian actuaries need to be active participants and leaders of the work and the opportunities before them.
A current challenge for Canadian insurance actuaries is preparing for IFRS 17 while for larger insurers, it is the introduction of the IAIS’ new global capital standards. Beyond these topics is a relative tsunami of effects due to the pandemic and climate-related risks. Within each of these topics lies a wealth of opportunity for the actuarial profession to add value to society in managing these risks.
Undoubtedly, the Institute and its actuaries will play key roles, but as these risks are global in nature, so too will the IAA have a vital role in supporting its member associations and being the global voice of the actuarial profession.
Any last words for our readers?
I would encourage your readers to consider volunteering in any of the various CIA or IAA committees that are focused on today’s key issues (e.g., climate-related risks, sustainability, cybercrime). Increasingly it appears that a co-ordinated international response is needed. There is an urgent need for the actuarial profession (both locally and internationally) to build on its core strengths and play key roles in helping to tackle these problems.