 "Insurance")
The Insurance Regulatory and Development Authority of India (Irdai) has given the green signal for appointing actuaries without relevant experience, provided they operate under the supervision of an experienced actuary. Irdai said these ‘mentors’ should guide the actuaries thus appointed on day-to-day basis.
According to R M Vishakha, managing director and CEO of IndiaFirst Life Insurance, this arrangement will motivate more youngsters to come on board and gain practical experience.
To be a qualified actuary, an individual needs to be accredited by a body like the Institute of Actuaries of India (IAI). This is done after the candidate clears all 15 papers in actuarial science and gets a fellowship. Companies also appoint individuals who have passed 10 papers as an associate in the actuarial department.
In the insurance sector, actuaries (officially called ‘appointed actuaries’) help assess a risk and price it accordingly. Apart from insurance companies, accounting firms and pension firms also employ actuaries.
As part of the actuarial course, the student should mandatorily work as an intern in the actuary department of a company. One has to complete the academic course and prepare for the professional qualification while working. This, say experts, puts a lot of pressure on the students and some of them eventually drop out.
Supporting the concept of mentoring, Saisrinivas Dhulipala, appointed actuary at Bajaj Allianz Life Insurance, said: “Young actuaries would require guidance in handling various issues related to products, solvency, and matters pertaining to liabilities and assets. Having an experienced actuary as mentor will help actuary aspirants to a great extent.”
For life insurers, the actuary has to be a full-time employee of the company. All insurers and reinsurers have to get the prior approval of Irdai before appointing one.
In the insurance sector, actuaries are supposed to certify product pricing, policy liabilities, solvency, among others, of the insurers. Therefore, Irdai approves the appointment of only senior actuaries having relevant experience of at least 10 years, said Sanjeeb Kumar, appointed actuary at Aviva Life Insurance and vice-president at Institute of Actuaries of India.
According to Kumar, there is a shortage of people with 10 years’ experience in life insurance and general insurance actuarial practice. He noted that the actuarial exams have high standards and the success rates are as very low.
According to the new norms, the ‘mentor’ should be a fellow of IAI. Fellows from any other institutes with which IAI has mutual recognition agreement will also be considered, provided the actuary declares his or her intention to obtain an IAI fellowship within one year.
“In a few years , we’ll have the needed number of senior actuaries once the recent qualifiers get the requisite work experience,” Kumar added.
Insurers have been advised to strengthen the actuarial function by employing enough actuarial students. In the process, the students will also get practical experience necessary for taking up more responsible positions in future.
