Regulation of actuaries etc
1672.These provisions are the first step in implementing the central recommendation of the Morris Review of the Actuarial Profession: that the Financial Reporting Council (the “FRC”) take on a similar role in relation to the oversight of the actuarial profession to the one it currently exercises in relation to accountancy and the auditors’ profession.
1673.The Government announced in Budget 2005 its intention to legislate in due course to put the oversight regime onto a full statutory footing. It has not been possible to develop such a regime in time for inclusion in this Act. It was therefore agreed with the FRC and the Institute and Faculty of Actuaries that, pending the introduction of a full statutory regime, the FRC would begin voluntary oversight of the actuarial profession at the earliest possible opportunity. The FRC assumed this responsibility for actuarial standards and oversight of the profession in April 2006.
1674.The aim of these provisions is to provide the minimum necessary statutory underpinning for a voluntary regime. They amend the C(AICE) Act 2004 in two ways:
they extend the statutory immunity conferred on the FRC and its companion bodies so that it covers acts or omissions relating to oversight of the actuarial profession;
they allow the Secretary of State, if necessary, to make regulations to require beneficiaries of the actuarial oversight to contribute towards the funding costs of the proposed regime.
1675.This latter is a reserve power. It is proposed, as is currently the case with accountancy and the auditors’ professions, to fund this activity on a non-statutory basis by agreement with the insurance and pensions industries and the actuarial profession. The FRC published its final funding proposals in March 2006.
Section 1274: Grants to bodies concerned with actuarial standards etc
1676.This section amends section 16(2) of the C(AICE) Act 2004 so as to include in the list of matters carried on by bodies eligible for grants activities concerned with the setting of actuarial standards, compliance with those standards, oversight of the actuarial profession and related matters.
1677.A body to which a grant has been paid under section 16 is protected by section 18 of that Act from certain liabilities in connection with its section 16(2) activities.
Section 1275: Levy to pay expenses of bodies concerned with actuarial standards etc
1678.This section amends section 17 of the C(AICE) Act 2004 so as to include amongst those by whom a levy may be payable—
the administrators of a public service pension scheme, and
the trustees and managers of an occupational or personal pension scheme.
1679.The effect of the amendments is to enable the Secretary of State to make regulations specifying such persons as liable to pay a levy if he considers that the oversight activities of the FRC are relevant to them to a significant extent.
1680.Subsection (4) enables regulations under section 17 to make different provision for different cases so that, for example, they can provide for different rates of levy to be payable by different kinds of bodies or persons.
1681.Subsection (5) prevents the first regulations under section 17, and any other regulations under that section that would result in any change in the bodies or persons by whom the levy is payable, from being treated as hybrid instruments for the purposes of the standing orders of either House of Parliament. The effect is that such regulations are not subject to the special procedures in the House of Lords that apply to such instruments.
1682.Subsection (7) amends Schedule 3 to the Pensions Act 2004 to enable the Pensions Regulator to disclose restricted information to the Secretary of State to enable or assist him in the exercise of his functions under section 17 of the C(AICE) Act 2004.
Section 1276: Application of provisions to Scotland and Northern Ireland
1683.This section amends the C(AICE) Act 2004 as regards the application of certain provisions to Scotland and Northern Ireland.
1684.Subsection (2) amends section 16 of that Act so that paragraphs (a) to (t) of subsection (2) of that section, which list matters carried on by bodies eligible for grants, only apply to Scotland insofar as they relate to matters for which provision would be outside the legislative competence of the Scottish Parliament. This is necessary because, whilst section 16 and the provisions of this Act amending it extend to Scotland, some of the matters listed in paragraphs (a) to (t) are not reserved matters for the purposes of section 30 of the Scotland Act 1998 and are therefore within the legislative competence of the Scottish Parliament.
1685.Subsections (3) to (5) amend section 16(2) and (5) and section 66(2) of the C(AICE) Act 2004 so that sections 16 and 18, as well as section 17, of that Act extend to Northern Ireland.
