Conflicts Of Interest Lead To Calls For Increased Regulation Of UK Actuaries

by Robin Pilgrim, LawAndTax-News.com, London

22 December 2004

An interim report on the performance of the UK's actuarial profession in recent years, commissioned by Treasury Secretary Ruth Kelly was published on Friday.

The report, which is expected to be released in its final form next year, was commissioned following events such as the revelations surrounding Equitable Life, and the problems encountered by the majority of endowment mortgage holders.

According to reports in the national media this week, the report's author, former Competition Commission chairman, Sir Derek Morris suggested that although competition and choice in the actuarial market is generally at a reasonable level, scrutiny of the advice given by actuaries is inadequate.

He also identified instances in which consumer interests are inadequately protected, citing as an example potential conflicts of interest for actuarial professionals employed by firms to offer advice on pensions management, who must seek to look after the interests of both the company and the public.

With this issue in mind, Sir Derek reportedly concluded that commercial interests may have become paramount in the industry, superseding the public interest. He went on to recommend that the profession lose its right to self-regulation, and that actuaries be governed in future by an independent body.

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