Kathmandu. The Directive issued by the Insurance Authority of Nepal on the appointment of actuaries represents a real progress in establishing the role of actuarial analyst in the insurance sector. However, the compliance status of the directive is very weak. Analysts say that the regulatory role is still not enough to be necessary. ’
After the authority issued the Directive on the Appointment of Actuaries for Insurers 2024, it was widely welcomed by actuarial professionals as a sign that the regulator is taking this step seriously. For the first time, the qualification criteria, functions, governance responsibilities and training obligations of real analysts were formally defined in the law. The survey confirms that analysts and observers attribute the guidance to strengthening actuarial function.
But issuing and implementing directives are different aspects. The authority’s own survey says that substantial compliance gaps have emerged in the more than a year since the directive came into force. This raises questions about whether current regulatory support is being used adequately to measure the challenges facing actuarial analysts. ’
Although there is a provision to appoint actuarial analysts within a certain period of the implementation of the directive, four micro life insurers and one reinsurer have not yet complied with the appointment order. Most of the insurers have also not implemented the provision of training of actuarial analysts and keeping a record of their performance.
As per the directive, the actuaries appointed for each specific job should provide at least 10 hours of on-the-job training. However, less than 28 percent of the analysts surveyed had this opportunity. Only 60 percent of them have fulfilled the provision of keeping the details of formal work. According to the information provided by the appointed actuary, only two-thirds of the companies have included the opinion of the appointed actuary in the performance reviews of the actuary. “While the directive is formally in effect, its practical application in this area remains inconsistent and uneven,” the report said. ’
Analysts and observers have called on regulators to take action. The survey has a number of recommendations for the authority: conducting regular training workshops and knowledge sharing sessions for the insurance sector, facilitating collaboration with international actuarial organizations, setting industry-wide career development standards and establishing more robust structures for actuarial capacity building, especially beyond the existing guidelines.
It is a constructive step that the NRA has announced to conduct this survey annually. This will create a feedback construct between regulatory intent and workplace realities. In addition, the signing of MoUs with Tribhuvan University and Nepal Actuarial Society also indicates more proactive regulatory initiatives.
The results of the regulatory initiative are yet to be clear. If there is any default, it is in non-compliance with the guidelines provisions. Still, there is a stinginess in the investment required by the insurer to meet the obligations related to training. If the authority plays a regulatory role, the actuarial analyst human resources will be able to get the result if the provision to spend 2 percent of the total management expenditure on the capacity enhancement of the employees is strictly enforced.
