After reading Duties of Actuaries for Pre-Need Companies, read also On Valuation of Reserve Liabilities of the Pre-Need Company
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An actuary is a person who has been trained for calculating premiums, dividends, pensions reserves, employee benefits and risks
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An actuary may be held liable to the pre-need company
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An actuary may be disaccredited by the Insurance Commission
The implementing rules and regulations of the Pre-need Code of the Philippines or Republic Act No. 9829 provides that an actuary is a professional duly accredited by the Insurance Commission, who among other things, deals with the financial impact of risk and uncertainty and who has been trained in mathematics and statistics in calculating premiums, dividends, pensions, reserves, employees benefits and risks.
Who has the power to set standards for the accreditation of actuaries?
The law says:
The Insurance Commission (Commission) shall have the power to set standards for the accreditation of actuaries directly responsible for the preparation and certification of the viability study of the pre-need plan submitted by the pre-need company for registration or amendment with the Commission. It shall further have the power to define the obligations and liabilities of actuaries accredited by it.
Take note that no actuary engaged by a pre-need company shall at the same time be a stockholder or serve as a director of the board, chief executive officer or chief financial officer of the company or any such position that the Commission may determine to have an inherent conflict of interest to the position of an actuary.
May an actuary be disaccredited?
The law says:
Yes.
Upon notice and hearing, an actuary shall be disaccredited by the Commission on the following grounds:
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Failure to adequately perform his required functions and duties;
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Failure to meet same requirements required for qualifications and disqualifications of directors and officers of a pre-need company;
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Failure to disclose conflict of interest;
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Failure to comply with the Code of Conduct of the Actuarial Society of the Philippines; or
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Such other grounds that may be determined by the Commission.
What are the documents of a pre-need company that must be certified by an Insurance Commission accredited actuary?
The law says:
The following documents which are from time to time submitted to the Commission by a pre-need company shall be duly certified by an Insurance Commission accredited actuary:
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Actuarial valuation of all liabilities pertaining to pre-need contracts;
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Asset share studies when applying for approval of new products or enhancement or repricing of existing products;
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Accounts in the financial statement of the pre-need company pertaining to actuarial reserve items;
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Financial projections showing the probable income and reserve requirements, enumerating the actuarial assumptions and bases of projections; and
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Such other reports as may be required by the Commission.
Take note that it shall be the duty of the actuary to immediately report to the Commission any matter contained in, arising out of, or in relation to the above reports requiring intervention of the Commission to protect the interests of planholders provided that the actuary shall not be liable to the pre-need company for any acts in relation to his duties unless there is a clear showing of bad faith, malice or gross negligence.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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