Even as the 'standing committee on finance' is examining
the Actuaries Bill 2005, the Actuarial Society of India
(ASI) says such a statue would not add any value to
the profession. The bill was introduced in the Parliament,
which referred it to the standing committee.
bill proposes to confer on ASI, a chartered status and
is modelled along the lines of governing statues of
accounting institutes like chartered and cost accountancy
and company secretaries.
conversion of ASI into a chartered institute has its
roots in the 'Malhotra committee' report. The committee
recommended that the insurance industry should fund
ASI while the government should consider according it
a statutory status. The work on the bill started in
1996 and has now reached the Parliament.
to Liyaquat Khan, president, ASI's, one of the provisions
in the bill stipulates that the proposed institute would
have three central government nominees and one from
the IRDA on its governing council. This when there will
be no government funding for the proposed institute.
a rapidly developing profession by a governing body
as mentioned in the bill will not be effective and will
go against the profession." Khan strongly feels
that the current structure is robust enough to take
the profession forward.
adds, "The ASI has gained enough experience in
running and expanding the institute's activities under
the current structure. The institute works in close
coordination with IRDA and global actuarial bodies like
the International Actuarial Association (IAA). The latter
feels that actuarial bodies are best governed if organised
under self regulatory and non governmental structure
but under overall guidance of the stakeholders and the
to him, ASI is considering inclusion of persons from
government, IRDA, legal and accounting professions on
its governing council. "This is different from
what the Actuaries Bill proposes. The inclusion of people
from the above walks of life is our own initiative."
ASI is also considers setting up of a disciplinary committee
headed by a person having judicial background and with
members for other professions apart from its own members.
the sudden stance change by ASI has raised many an eyebrows
within and without the profession. "When the ASI's
general body has approved the chartered institute status
and agreed for transfer of assets and liabilities to
the proposed institute any rethinking on the bill should
be discussed and approved at the annual general meeting.
The executive committee cannot unilaterally decide on
the issue," says one actuary.
to R Ramakrishnan, consulting actuary and member, Malhotra
Committee, the ASI can become significant player in
the Asian and African regions only if it becomes a chartered
body with representatives from IRDA and the government
in its governing body.
the change of stance have something to do with other
provisions of the bill like allowing only individual
and partnership firms to undertake actuarial practice
and preventing actuaries to practice under corporate
denies it emphatically, staating, "It is not related
to the issue of corporate actuarial practice."
to industry sources, the hectic lobbying by foreign
actuarial companies, supported by their governments
and some domestic private life insurers, to promote
the cause of corporate actuaries prevented the tabling
of the bill in the Parliament in 2002 itself. (See:
global actuarial companies the stakes are high in India.
The actuarial profession is slowly picking up. It is
said that for every 10 chartered accountants, there
is potential for one actuary. According to the Income
Tax Act, gratuity valuations of companies have to be
certified by a qualified actuary. Till date this rule
was not followed. But nowadays,
chartered accountants are
insisting that gratuity, leave encashment and pension
valuations of companies be done by actuaries. This throws
up immense opportunities for actuaries.
IRDA is in favour of the bill that does not allow corporate