In 2018, the Government announced a major review of the Financial Reporting Council (FRC), which included looking at the regulation of accountants, auditors and actuaries in the UK – known as the ‘Independent Review of the Financial Reporting Council’ – led by former civil servant, Sir John Kingman. This was prompted by concerns about the quality of UK audit following several high-profile corporate collapses.
Since then, the IFoA has actively engaged with successive governments, the FRC, and other stakeholders to represent members’ interests as proposals were developed that would have seen the regulation of actuaries placed on a statutory footing, through the proposed Audit Reform and Corporate Governance Bill.
Our engagement throughout has been supported by the Council-designated Regulatory Strategy Steering Group. This group comprises the President, Council members, the Chair of the IFoA Board, senior volunteers, the Chair of the Regulatory Board, independent non-executives, and the IFoA Executive. It has been crucial in understanding the proposed legislation and formulating the IFoA’s response.
After over seven years of consultation and engagement, the Government has decided not to proceed with proposals that would have placed the regulation of UK actuaries into legislation.
The Government instead intends for the IFoA and FRC (or any successor body) to continue with the current voluntary contractual arrangement under an updated Memorandum of Understanding (MoU).
This is a positive outcome that recognises statutory intervention might have led to unintended consequences for IFoA Members and their employers, including increased regulatory burdens and costs, as well as a negative impact of the profession’s competitiveness.
Our attention will now turn to the process of working in partnership with the FRC to update the MoU to support a modern, proportionate regulatory framework for actuaries that protects the public interest.