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Predecessor | Faculty of Actuaries Institute of Actuaries ![]() |
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Founded | 2010 |
Headquarters | London , United Kingdom |
Website | actuaries |
The Institute and Faculty of Actuaries is the professional body which represents and regulates actuaries in the United Kingdom.
The Institute and Faculty of Actuaries came into being on 1 August 2010 as a result of the merger of the Institute of Actuaries and the Faculty of Actuaries in Scotland after voting members of both bodies voted to merge their respective organisations in a ballot held on 25 May 2010. [1]
The Queen in Council granted an amendment effective 1 August 2010 to the Charter of the Institute of Actuaries in terms that converted it to the Charter for the Institute and Faculty of Actuaries. [2] The assets, liabilities and membership rights of the Faculty of Actuaries in Scotland were transferred on this same day to the Institute and Faculty of Actuaries and the Charter of the Faculty of Actuaries in Scotland was surrendered. Essential elements of the merger arrangements, such as the Scottish constituency and its representation on the Council of the Institute and Faculty of Actuaries, are incorporated into the new governance documents.
Authority for the governance, control and strategic direction of the Institute and Faculty of Actuaries sits with the Council which delegates to various boards, committees and staff. [3]
The President of the Institute and Faculty of Actuaries (IFoA) is Kalpana Shah. Her term began in September 2023. She succeeded Matt Saker, who now holds the title of Immediate Past President. The President-elect is Kartina Tahir Thomson.
In order:
Actuaries work in a number of different practice areas: enterprise risk management, finance and investment, general insurance, health and care, life insurance and pensions.
Each of these areas is supported by an executive committee which oversees the development of knowledge and research within its own area, provides members with CPD opportunities and takes forward a programme of practice-specific research. The committees also foster a sense of community among actuaries practising in their particular field of expertise. [4]
The Institute and Faculty of Actuaries sets examinations, continuing professional development, professional codes and disciplinary standards. After the 2005 Morris Review raised concerns that the (then) Institute of Actuaries had failed to keep its syllabus and teaching materials up to date, the result of ‘entrenched commercial interests’ hindering the development of the Institute's education policy, [5] the Review proposed a regime of independent oversight of the Institute's regulation of the profession by the Financial Reporting Council. [6] As a result, the FRC assumed responsibility for oversight of the actuarial profession and the independent setting of actuarial technical standards with effect from May 2006. [7]
In 2018 the Kingman Review found that the FRC's oversight of the actuarial profession had not in practice proved 'an altogether effective arrangement'. It was based on a voluntary understanding, and the FRC had no powers with which to enforce 'any meaningful oversight of the IFoA'. [8] The UK Treasury, supported by the Government Actuary, told the Review they wished to see effective regulatory oversight of the actuarial profession., [9] and the Review recommended that the Government, working with the PRA and The Pensions Regulator (TPR), 'should review what powers are required effectively to oversee regulation of the actuarial profession'.
Alongside this, a report by financial economist Kevin Dowd [10] claimed that the Institute 'had allowed itself to be used as a mouthpiece for ERM industry leaders to broadcast their misunderstanding of their products in pursuit of their commercial interests' following a review by the UK Prudential Regulation Authority in 2018 concluding that firms investing in equity release mortgages were not properly reflecting the cost of the no-negative-equity guarantee. The UK satirical magazine Private Eye also carried a story alleging that the PRA's investigation had been delayed by 'years of lobbying' from firms including accountants KPMG and Ernst & Young, and by the Institute itself. [11]
Qualified actuaries are either Fellows (if they pass the examinations necessary for specialist and regulated roles) or Associates. Fellows bear the designations FIA or FFA while Associates bear the designations AIA or AFA. In 2022 approval was given for qualified actuaries to be designated Chartered Actuary though its introduction is still awaited. Chartered Actuary: 2022 Member Vote
Practising certificates are issued to certain actuaries for their statutory role in the financial management of life offices and most pension schemes. The Institute and Faculty of Actuaries continues the former Institute’s role as a designated professional body, under the Financial Services and Markets Act 2000, which enables it to license firms that are managed or controlled by actuaries, allowing them to carry on certain limited regulated activities.
An actuarial qualification from the Institute and Faculty of Actuaries consists of a combination of the completion of various examinations and courses. The examinations are split into six sections: Core Mathematics (CM), Core Statistics (CS), Core Business (CB), Core Practice (CP), Specialist Practice (SP), and Specialist Applications (SA). Study material for the examinations is usually obtained through the official bookshop of the Institute of Actuaries [12] or through the Actuarial Education Company (ActEd), [13] a subsidiary of BPP Actuarial Education Ltd.
In addition to examinations and courses, it is required that the candidate complete at least three years work as an actuary to qualify as a “Fellow of the Institute and Faculty of Actuaries” (FIA) [14]
The Core sections consists of 9 written exams and a “Business Awareness Module,” CB3. These are usually sat first by a candidate and include the underlying mathematics involved in actuarial work as well as an introduction to financial and economic issues. These are also the most common exams for which candidates may get exemptions.
The Specialist Technical section is the first stage the candidate has a choice of which exams to take. The candidate chooses two from the various actuarial specialist subjects i.e. Health and Care, Life Insurance, General Insurance, Pensions, Finance or Investments and further technical knowledge on said subjects is attained.
The Specialist Applications section allows the candidate to choose one area for which they take the SA paper and attain full Fellowship; leading to many referring to this as the “Fellowship paper.” However, as the rules on the ordering of examinations were relaxed, this examination may be taken before taking some earlier examinations resulting in candidates qualifying on other papers.
The Certificate in Financial Mathematics is issued by the Institute and Faculty of Actuaries.
The Diploma in Actuarial Techniques was sent to students on completion of all Core Technical stage subjects: CT1, CT2, CT3, CT4, CT5, CT6, CT7, CT8 and CT9. [15]
The Certificate in Finance and Investment was sent to all students who complete or are exempted from CT1, CT2, CT4, CT7, CT8, CT9 and CA1. [15]
The diploma in Actuarial Techniques and Certificate in Finance and Investment were discontinued by the IFoA in 2016. [16]
On completion of all of the Core Technical and Core Applications exams, then students can become Associate members of the Institute and Faculty of Actuaries and gain the right to describe themselves as an actuary and to use the letters AIA or AFA provided that they have two years of work experience as an actuary. [17]
On completion of all of the Associate exams, two of the Specialist technical subjects and one of the Specialist applications subjects, students can become Fellows of the Institute and Faculty of Actuaries and to use the letters FIA or FFA provided that they have three years of work experience as an actuary. [18]
Alternative routes to Fellowship are:
Associates and Fellows gain a further qualification, CERA, if they pass the SP9 Enterprise Risk Management exam. [19]
This new qualification [20] will be obtained after passing 6 modules. Module 0 tests basic mathematics (with a its syllabus based on the Foundational ActEd Course written by ActEd (The Actuarial Education Company) [21] ), Modules 1-4 tests parts of the CTs and Module 5 tests audit trails (CA2). [22]
The Institute and Faculty of Actuaries operates a two-tier charging structure for its examination fees: full rate and reduced rate. The reduced rate is at a discount to the full rate.
To qualify for a reduced rate, the student member must have an income which is less than £7 140 per annum regardless of where you live or work
Student members from a list of specific countries can purchase educational materials from Acted at a discount. [23]
Rates as at 2017 [24] are as follows:
CT stage: £220 per subject. ST stage: £305 per subject. CA1: £595. CA2: £450. CP3: £310. SA stage: £305 per subject.
CT stage: £115 per subject. ST stage: £155 per subject. CA1: £300. CA2: £260. CP3: £160. SA stage: £155 per subject.
When occupations are placed on this list, UK employers have less restrictions for recruiting candidates directly from overseas; specifically from outside the EU. They would no longer need to complete a residency test, which involves demonstrating that a search for suitable candidates within the UK in the first instance has been unsuccessful.
In November 2011, actuaries were added to the UK government's Shortage Occupation List. [25] The actuarial profession had argued for actuaries' inclusion on this list.
Actuaries were removed from the shortage occupation list in April 2013 following a consultation by the UK government's Migration Advisory Committee in January 2013. [26] On this occasion, the actuarial profession made no submission either way; neither for nor against a shortage of actuaries.
Despite the actuarial profession advising a shortage of actuaries, freedom of information requests to the UK Border Agency (now superseded by UK Visas and Immigration) have revealed that only 19 people emigrated to the UK to work as an actuary via the shortage occupation list from 1 November 2011 to 12 March 2013.
The countries of origin for these migrants were as follows: Australia (6), China (1), India (4), Malaysia (1), South Africa (5) and United States (2).
The salaries of these migrants ranged from £42,500 (actuary) to £186,261 (chief actuary). The average salary was £82,042.
Despite Solvency II Directive work being cited as a reason for a shortage of actuaries, only one migrant had the description "Solvency II" in their job title.[ citation needed ]
In September/October 2022, the actuarial profession faced criticism due to its failure to cover risks which crystallised when interest rates rose. [27]
In November 2023, the credibility of the Institute and Faculty of Actuaries' commitment to equal treatment for women (and to DEI, "diversity equity and inclusion" generally) came into severe question after former President Tan Suee Chieh revealed that in 2022 the IFoA dismissed two highly regarded qualified actuaries (one of whom was 8 months pregnant) and replaced them by non actuaries. (See https://www.linkedin.com/pulse/tan-suee-chiehs-comments-recent-events-ifoa-tan-suee-chieh-euwpc/).
An actuary is a professional with advanced mathematical skills who deals with the measurement and management of risk and uncertainty. The name of the corresponding field is actuarial science which covers rigorous mathematical calculations in areas of life expectancy and life insurance. These risks can affect both sides of the balance sheet and require asset management, liability management, and valuation skills. Actuaries provide assessments of financial security systems, with a focus on their complexity, their mathematics, and their mechanisms.
Actuarial science is the discipline that applies mathematical and statistical methods to assess risk in insurance, pension, finance, investment and other industries and professions. More generally, actuaries apply rigorous mathematics to model matters of uncertainty and life expectancy.
The Society of Actuaries (SOA) is a global professional organization for actuaries. It was founded in 1949 as the merger of two major actuarial organizations in the United States: the Actuarial Society of America and the American Institute of Actuaries. It is a full member organization of the International Actuarial Association.
The Casualty Actuarial Society (CAS) is a professional society of actuaries in North America specializing in property and casualty insurance.
The Institute of Actuaries was one of the two professional bodies which represented actuaries in the United Kingdom. The institute was based in England, while the other body, the Faculty of Actuaries, was based in Scotland. While the Institute and Faculty of Actuaries were separate institutions, they worked very closely together, and their professional qualifications and actuarial standards were identical. On 25 May 2010, voting members of the institute who took part in a ballot voted to merge the institute with the faculty, thus creating the Institute and Faculty of Actuaries, which came into being on 1 August 2010. The Institute of Actuaries ceased to exist on that date.
The Canadian Institute of Actuaries (CIA) is the national organization of the actuarial profession in Canada. It was incorporated March 18, 1965. The FCIA designation stands for Fellow of the Canadian Institute of Actuaries. As the national organization of the Canadian actuarial profession, the CIA serves the public through the provision by the profession of actuarial services and advice by: representing the Canadian actuarial profession in the formulation of public policy; promoting the advancement of actuarial science; educating and qualifying CIA members; ensuring that actuarial services provided by its members meet accepted professional standards; and assisting actuaries in Canada in the discharge of their professional responsibilities.
Enterprise risk management (ERM) in business includes the methods and processes used by organizations to manage risks and seize opportunities related to the achievement of their objectives. ERM provides a framework for risk management, which typically involves identifying particular events or circumstances relevant to the organization's objectives, assessing them in terms of likelihood and magnitude of impact, determining a response strategy, and monitoring process. By identifying and proactively addressing risks and opportunities, business enterprises protect and create value for their stakeholders, including owners, employees, customers, regulators, and society overall.
The Faculty of Actuaries in Scotland was the professional body representing actuaries in Scotland. The Faculty of Actuaries was one of two actuarial bodies in the UK, the other was the Institute of Actuaries, which was a separate body in England, Wales and Northern Ireland. While the Faculty of Actuaries and the Institute of Actuaries were separate institutions, they worked very closely together, and the professional qualifications and professional standards for actuaries were identical in each of them. On 25 May 2010, voting members of the Faculty who took part in a ballot voted to merge the Faculty with the Institute of Actuaries, thus creating the Institute and Faculty of Actuaries which came into being on 1 August 2010, superseding the Faculty of Actuaries which ceased to exist on that date.
The following outline is provided as an overview of and topical guide to actuarial science:
The Financial Reporting Council (FRC) is an independent regulator in the UK and Ireland based in London Wall in the City of London, responsible for regulating auditors, accountants and actuaries, and setting the UK's Corporate Governance and Stewardship Codes. The FRC seeks to promote transparency and integrity in business by aiming its work at investors and others who rely on company reports, audits and high-quality risk management.
The Institute of Actuaries of India is the sole national apex body for actuaries in India. It was formed in September 1944 by the conversion of the Actuarial Society of India into a body corporate by virtue of the Actuaries Act, 2006. It is under the ownership of Ministry of Finance, Government of India.
The Czech Society of Actuaries is the association of actuaries in Czechia. It aims to promote education and research in actuarial science and to mediate social and professional contacts among actuaries.
Frank Mitchell Redington was a noted British actuary. Frank Redington was best known for his development of Immunisation Theory which specifies how a fixed income portfolio can be "immunised" against changing interest rates.
An enrolled actuary is an actuary enrolled by the Joint Board for the Enrollment of Actuaries under the Employee Retirement Income Security Act of 1974 (ERISA). Enrolled actuaries, under regulations of the Department of the Treasury and the Department of Labor, perform a variety of tasks with respect to pension plans in the United States under ERISA. As of July, 2020, there were approximately 3,500 enrolled actuaries.
Following is a partial list of professional certifications in financial services, with an overview of the educational and continuing requirements for each; see Professional certification § Accountancy, auditing and finance and Category:Professional certification in finance for all articles. As the field of finance has increased in complexity in recent years, the number of available designations has grown, and, correspondingly, some will have more recognition than others. Note that in the US, many state securities and insurance regulators do not allow financial professionals to use a designation — in particular a "senior" designation — unless it has been accredited by either the American National Standards Institute or the National Commission for Certifying Agencies.
Philip Booth is a British economist. He is Dean of the Faculty of Education, Humanities and Social Sciences at St Mary's University, Twickenham, and Senior Academic Fellow at the Institute of Economic Affairs. His primary areas of research and writing are social insurance, financial regulation and Catholic social teaching.
Tan Suee Chieh is a Malaysian-Singaporean businessman and actuary. He was appointed, as the Group Chief Executive at NTUC Enterprise on 1 October 2013.
The actuarial credentialing and exam process usually requires passing a rigorous series of professional examinations, most often taking several years in total, before one can become recognized as a credentialed actuary. In some countries, such as Denmark, most study takes place in a university setting. In others, such as the U.S., most study takes place during employment through a series of examinations. In the UK, and countries based on its process, there is a hybrid university-exam structure.
Sir Alfred William Watson KCB FIA was a British actuary and civil servant. In 1917 he became Britain's first government actuary and was very influential in setting up the funding by National Insurance for the newly introduced state pension.
The Morris Review was a government-sponsored review of the UK actuarial profession led by Sir Derek Morris in 2004–05. It was commissioned in March 2004, in the aftermath of the near collapse of Equitable Life, and the subsequent findings of Lord Penrose's Equitable Life Inquiry The review found a number of problems with the actuarial profession, including insularity of approach, lack of transparency, failure to take account of developments in financial economics, and the influence of 'entrenched commercial interests'.