The social security institution and supervising authorities take measures which seek to ensure and maintain the independence of the actuary.
The quality, accuracy and reliability of the actuarial work carried out for, and on behalf of, a social security institution will depend on safeguarding the independence of actuaries and their work. The actuary may face internal pressures or constraints from within the institution. There may also be external pressures (for example political) faced by the actuary and/or the social security institution. Such threats to the independence of the work undertaken should be mitigated through appropriate internal policy measures as well as legislative and regulatory support. The social security institution should also put in place safeguards to assess whether the actuary is faced with any conflict of interest and measures that should be taken in such cases.
- The actuary should have sufficient access to data, choice over the most appropriate methodology and assumptions to use, and not be unduly influenced by external considerations or subject to internal pressure that may impact calculations, results and recommendations.
- The social security institution should facilitate the independence of the actuary through the setting up and monitoring of appropriate procedures. Procedures for internal peer review, external expert review, and operational control within the context of an effective governance framework should be set out clearly in written documents.
- The social security institution should set down and respect a written policy specifying actions to take when independence is not respected. A designated senior staff member or independent expert should regularly monitor whether such procedures are being correctly followed.
- There should be regular reporting which examines whether the independence of the actuary is maintained, the steps taken to guarantee this independence and measures available when this does not occur. In addition, the external review of actuarial work should incorporate an assessment of whether the actuary acted free of any unjustified internal or external constraint (for example, in the setting of assumptions).
- Particular emphasis should be placed on actual, potential or perceived conflicts of interest faced by the actuary. Methods to assess conflicts of interest as well as relevant training for relevant members of staff involved in performing actuarial work should be provided. Appropriate peer review processes should support this objective.
- Measures taken should be consistent with, and will draw on, existing general governance practices and risk management processes which aim to minimize risks in such situations. This may be particularly important in respect of the provision of professional advice and its separation from decision-making.
- The actuary and social security institution should draw on national and international actuarial standards and good practice recommendations to support the independence of the actuary.
- The social security institution should, where possible, input into the regulatory mechanisms supporting the independence of the actuary and promote and support the resulting legislation and regulation arising.
- Notwithstanding any existing legislation that applies, the social security institution should put in place internal policies and procedures ensuring that:
- The actuary is not unduly influenced by external or internal considerations that may affect the results and recommendations of his work;
- The actuary is able to undertake his or her activities without undue and unjustified internal or external interference.
- When the independence of the actuary is compromised, the actuary should highlight the resulting financial and operational implications and communicate these to relevant stakeholders. This action should be supported by the social security institution.
- The question of the independence of the actuary should be part of the risk management process of the institution.