Use our Portfolio Manager
 to generate:

    - Insurance Chart
    - Cash Flow Chart
    - Premium Calendar

  Insurance Counsellor
  Calculators
   Log in

   Need for Insurance
  Insurance & Tax
  Retirement Planning
  Insurance as Investment

Home / IRDA Update 

Actuaries to fix premium: IRDA

The Insurance Regulatory & Development Authority (IRDA) has made the actuary in an insurance company responsible for fixing the rates of premium which should be adequate and in commensurate with underlying benefits for the insurance contracts.

The authority has made it mandatory for all insurance companies to have a professional actuary. Defining the key role of an actuary in an insurance company, IRDA in its Appointed Actuary Regulations, 2000 has stipulated that it is the duty of an appointed actuary to ensure that policyholder reasonable expectations have been considered in the matter of distribution of surplus to the participating policy holders. 

The rules and regulation will be come into effect from the data of notification by the IRDA. The appointed actuary of an insurer will be under obligation to bring to the notice of the insurer, any matter on which action is required to be taken by the insurer its directors, suggests the guideline. These regulations will apply to all insurers, Actuarial society of India (CONSTITUTED UNDER SOCIETIES REGISTRATION ACT 1860) and appointed actuaries. 

On the professional standards of an actuary, he or she must be a fellow member of the Actuarial Society of India and be employed by one insurer only. The appointed actuary of an insurer shall have access to all information in possession of the proper performance of the functions and duties of the actuary.

The actuary will be entitled to attend meetings of the directors of the insurer and to speak on any matter affecting the solvency of the insurer. The actuary of every insurer will be entitled to attend any meeting of shareholder or policyholders of the insurer as well as meeting of member of the insurer at which the insurers annual accounts are to be. 

The actuarial advice to the management of the of the insurer, particularly in the area of product design and pricing, insurance contract wording, investment and reinsurance, will ensure the solvency of insurer at all times has been offered and implemented. The actuary will be required to ensure that the authority shall be reported immediately of the practices adopted or proposed to be adopted by the insurer, which jeopardizes the interest of the policyholders and the solvency of insurer. He will also ensure that the determination of actuarial reserves has been done in accordance with professional standards.

Besides, he will also ensure that the provisions for actuarial reserves- namely, unearned premium, incurred but not reported claims, catastrophic reserves and un-expired risks that are required for the purpose of determination of amount of liabilities have been determined in accordance with professional standard. 

On the appointment of the actuary, IRDA said an insurer should notify and secure the approval of the authority for the appointment of his appointed actuary. The approval of the authority is deemed to be granted if the insurer has not received any reply from the authority within 30 days from the date of such notification. In case of a vacancy, the insurer has to appoint an actuary within six weeks. 

Apart from IRDA guidelines, the center is planning to bring out legislation on actuary providing a constitutional status to the profession on par with chartered accountants.

More Updates

| Back | Top | Home |