The actuarial profession needs to be subject to extra quality control measures when it comes to pensions, according to the Financial Reporting Council's Professional Oversight Board (POB).

The message from the POB came after an announcement that it is to consult on additional quality assurance requirements for individual actuaries and actuarial firms.

The board, which has also published a summary of responses to its discussion paper - Monitoring and scrutiny of actuarial work - said that enhancing the scope and application of compliance reviews through professional quality assurance requirements on individual actuaries or their firms, should be a priority for the industry.

However, the POB has said there will be no immediate steps taken to develop strategies that involve active external monitoring, such as an actuarial inspection unit, although it did say that the strategies for insurance and pensions may be applicable more generally.

The organisation said that the paper responded to a recommendation by the Morris Review, which stated that the FRC should satisfy itself that appropriate monitoring of actuaries' compliance with professional standards and independent scrutiny of actuarial advice is occurring through either direct supervision by the regulator, audit or external peer review.

"The response we received to our discussion paper on monitoring and scrutiny of actuarial work have been well thought through and insightful," said Dame Barbara Mills, Oversight Board chair. "They have helped us formulate our approach to professional regulation generally and encouraged us to consult further on quality assurance options.
We shall not at this stage be calling for active external monitoring, such as an actuarial inspection unit, as there are more proportionate actions whose impact should be considered first."

- Pensions Age January 2009

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