The International Actuarial Association (IAA) is pleased to announce the adoption of two new International Standards of Actuarial Practice (ISAPs) at its Council meeting held in Cape Town, South Africa on 21 November 2016. The two new ISAPs are:
- International Standard of Actuarial Practice 1A (ISAP 1A) on Governance of Models; and
- International Standard of Actuarial Practice 5 (ISAP 5) on Insurer Enterprise Risk Models.
Like their predecessors, both ISAPs will be model standards intended for adoption by actuarial standard-setting bodies, as appropriate, and as such, are not binding on any actuary. The IAA encourages actuarial standard-setting bodies to study these ISAPs and to consider taking one of the following courses of action in their jurisdiction:
- Adopting these ISAPs as standards with only the modifications in the Drafting Notes;
- Customizing these ISAPs by revising the text of the ISAPs to the extent deemed appropriate by the standard-setting body while ensuring that the resulting standard or set of standards is substantially consistent with these ISAPs;
- Endorsing these ISAPs by declaring that these ISAPs are appropriate for use in certain clearly defined circumstances;
- Modifying existing standards to obtain substantial consistency with these ISAPs; or
- Confirming that existing standards are already substantially consistent with these ISAPs.
These new model standards directly support the IAA’s strategic objective to promote the development and issuance of actuarial standards in the jurisdictions of all IAA Member Associations.
ISAPs 1A and ISAP 5 have been developed by the ISAP 1A Task Force and the ISAP 5 Task Force of the Actuarial Standards Committee (ASC) respectively, in compliance with the IAA’s due process for International Standards of Actuarial Practice. As the final standards were developed, the ASC took into consideration the numerous comments received on the exposure drafts of the ISAPs published in October 2015 as well as the final review consultation process in September 2016, resulting in several improvements. The ASC and the relevant Task Forces will be hosting a webcast in the near future to introduce the new ISAPs and engage with the Member Associations. Details of this webcast and registration information will be made available in due course.
The two new ISAPs and the updated glossary of defined terms are available on the IAA website under publications/ISAPs. The Director of Technical Activities at the IAA Secretariat is available to answer any questions about the ISAPs and provide additional information on request.