actuaries act 2006

7/30/2019 Actuaries Act 2006

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The Actuaries Act,2006

S. P. Subhedar

Sr. Advisor, Prudential Corporation Asia

August 2007


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The Actuaries Act,2006 - Disclaimer

The objective of this presentation is only to familiarize theparticipants with the provisions of the Act. For any action

in connection with the provisions of the Act, the

participants are advised to refer to the Act.

Further, the views expressed during discussions at the

session will be entirely presenters personal views and inno way be construed as the views of the IAI.


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Agenda

Background

The Actuaries Act, 2006

- Chapter I - Preliminary

- Chapter II - Institute of Actuaries of India

- Chapter III - Register of Members

- Chapter IV - Misconduct

- Chapter V - Appeals

- Chapter VI - Penalt ies

- Chapter VII - Quality Review Board

- Chapter VIII - Dissolution of the Actuarial Society of India

Registered Under The Societies Registration

Act

- Chapter IX - Miscellaneous

- The Schedule


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Background

Government should consider granting a charter to the society at

an appropriate time -- Malhotra Committee recommendation(1994).

Insurance Regulatory Authority, an interim authority, set up by an

executive order initiated action in this regard in late 1996.

After extensive debate at the professional level and discussions

with the IRA, the draft Bil l to be submitted to the government took

final shape in 1997.

The IRDA Act was enacted in December 1999.

The IRDA then pursued the matter and the draft Bil l was reviewed.


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Background

The Bill when introduced in the Parliament was referred to the

Standing Committee.

The Standing Committee held discussions with the various

stakeholders and gave its report on the basis of which the Bill was

amended.

The Bill was passed in the monsoon session of the Parliament in

August 2006 and received the assent of the President on 27th

August 2006.

The Actuaries Act, 2006 was published in the Gazette of India

dated 28th August 2006.


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Chapter I - Preliminary

The Act envisages that it shall come into force on such date as the

Central Government may appoint.

The Act provides for different dates to be appointed for different

provisions of the Act.

Through a notification dated 8th November 2006, the Government

appointed 10th November 2006 as the date from which all the

provisions of the Act shall come into force.

Definition of Actuary , inter alia, stipulates that he has to be a

fellow member of the Institute .


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Chapter I - Preliminary

A member of the Institute shall be deemed to be in practice

when - individually; or

- in partnership with Actuaries in practice as a member or

an employee of a company,

he - engages himself in actuarial practice; or

- offers to perform or performs services involving the

application of actuarial techniques in the field of

insurance, pension, investment..

- renders such other services as, in the opinion of the

Council, are or may be rendered by an actuary in practice;

- is in employment of a person engaged in one or of the

activities mention above.


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Chapter II - Institute of Actuaries of India

On the appointed day , i.e. 10th Nov 2006,

- a body corporate was constituted by the name of the

Institute of Actuaries of India; and

- all the assets and liabilit ies of the Actuarial Society stand

transferred to, and vested in, the Institute.

Entry of names in Register:

- any person who immediately before 10th Nov 2006 was

an associate or fellow member of the ASI;- any person who has passed the examinations of the ASI

and has completed specified training, except any such

person who is not a permanent resident of India;


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- any person who has passed specified examination and

completed specified training for membership of the

Institute;

- any person who has passed examination and completed

training outside India as is being specified as beingequivalent to that specified under the Act for membership

of the Insti tute. In case the person is not permanently

residing in India, he will have to satisfy conditions as may

imposed by the Government / Council.

The members of the Insti tute shall be divided into two classes :

Associates and Fellows.


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Honorary, Affil iated and Student Members:

- the Council may confer Honorary membership on persons

of eminence in matters relating to and of interest to the

actuarial profession;

- a person who is a holder of membership equivalent tofellow membership of the Insti tute may be admitted as an

Affiliate for such period and on such terms and conditions

as wil l be laid down in the regulations;

- a person having specified academic qualif ication and hasenrolled himself for examination of the Insti tute may be

admitted as Student member.


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Honorary Member, Affi liate Member and Student Member shall

have no right to vote on any matter or resolution.

No member of the Insti tute shall be entitled to practice unless he

fulfills the qualifications as may be specified and obtains from the

Council a Certificate of Practice (CoP).

Fees for CoP shall be payable on or before 1st April every year.

CoP may be cancelled by the Council under such circumstances

as may be laid down in the regulations.

Every member of the Institute in practice shall, and any othermember may, use the designation of an Actuary.


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Composition of the Council:

- minimum of nine and maximum of twelve elected members;

- an officer not below the rank of Jt.Secretary nominated by

the Government of India to represent the Finance Ministry;

- a person from the IRDA nominated by the CentralGovernment;

- two persons to be nominated by the Central Government

from amongst the persons having knowledge of insurance,

law, finance or any other discipline as would be useful tothe Council.

One third of the members of the Council shall retire every second

year by rotation.


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The first AGM of the Insti tute shall be held within a period of not

more than 18 months from the appointed day.

Not more than 15 months shall elapse between the date of one

AGM and that of the next.

An elected member of the Council shall be eligible for re-election

but not for more than two consecutive terms, I.e. three

consecutive terms in all.

A member of the Council who has been elected as a President

shall not be eligible for election or nomination as a member of the

Council.


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The Council shall refer all election disputes to the Tribunal

established by the Central Government for this purpose.

The Council shall elect three of its elected members as the

President, Vice President and Hon. Secretary.

These office bearers shall hold office for a period of two years

provided they continue to be the members of the Council.

The duty of carrying out the functions under the provisions of the

Act shall be vested in the Council.


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The Council may constitute such committees from amongst its

members, and co-opt therein persons who are not members ofthe Institute, as it deems necessary for the purpose of carrying

out the provisions of the Act.

The co-opted members shall not exceed one-third of the totalmembership of the committee.

The Council shall cause to be published in the Gazette of India a

copy of the audited accounts and its report for the year not laterthan 30th September of the year next fol lowing.


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Chapter III - Register of Members

The Council shall cause to be published a list of members as on

1st Apri l each year, and shall, if requested to do so by anymember, send him a copy of such list on payment of such amount

as may be laid down in the regulations.


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Chapter IV - Misconduct

The Council shall constitute a Disciplinary Committee consist ing

of:

- the President or the Vice President as the presiding

officer;

- two members of the Council, elected by the Council; and

- two members to be nominated by the Central Government

The Council may appoint a Prosecution Director and other

employees to assist the Disciplinary Committee in makinginquiries in respect of the complaint received.

The Disciplinary Committee to submit report of its inquiry to the

Council


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For an inquiry under the provisions of the Act, the Appellate

Authority, the Disciplinary Committee and the ProsecutionDirector shall have the same powers as are vested in a civi l court

in respect of the following matters:

- summoning and enforcing attendance of any person and

examining him on oath;

- the discovery and production of any document; and

- receiving evidence on affidavit.

The Council is the final authority on all disciplinary matters.

When the Council finds a member guil ty of professional

misconduct it shall afford a member a reasonable opportunity ofbeing heard before making any order against him.


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Section 31 of the Act confers on the Disciplinary Committee or the

Prosecution Director powers to inquire into the conduct of anymember of the Institute under any circumstances other than those

listed in the Schedule.


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Chapter V - Appeals

A member aggrieved by the order of the Council imposing on him

the penalty may within 90 days of the date of the order prefer anappeal to the Appellate Authority.

The Appellate Authority consti tuted under the Chartered

Accountants Act, 1949, shall be the Appellate Authority for thispurpose subject to the following modification:

- the Central Government shall, by notification, appoint two

part-time Members from amongst the persons who have

been members of the Council of the IAI for at least one full

term and who are not sitt ing members of the Council.


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Chapter VI - Penalties

Penalty for falsely claiming to be a member, etc.

- first conviction with fine which may extend up to one

lakh rupees; and

- any subsequent conviction - imprisonment up to one year

or fine up to two lakh rupees or both.

Except as otherwise provided in the Act,no person shall:

- use a name or a common seal which is identical with that

of the Institute- award any degree, diploma or certificate or bestow any

designation which purports to indicate any qualification

similar to that of a member of the Insti tute.


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Chapter VI - Penalties

This shall not apply to any University or other institution

established by law or to any body affiliated to the Institute.

Companies not to engage in Actuarial practice. Contravention of

this provision shall be punishable with fine - first conviction fine

of Rs 10,000 - subsequent conviction fine of Rs 25,000.

Only fellow members can sign documents on behalf of an actuary

in practice or a firm of actuaries in his or its professional capacity.

Contravention of these provisions shall be punishable - first

conviction fine up to Rs 25,000 - subsequent conviction -

imprisonment up to one year or fine up to one lakh or both.


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Chapter VII - Quality Review Board

The Central Government shall constitute a Quality Review Board

consisting of a Chairperson and not more than four members.

Two members of the Board shall be nominated by the Council and

the other two shall be nominated by the Central Government.

If the Board is consti tuted with two members, one each shall be

nominated by the Council and the Central Government.

The Board shall perform the following functions:

- to fix standards for the services provided by the members

of the Institute;

- to review the quality of services provided by the membersof the Institute.


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Chapter VII - Quality Review Board

- to guide the members of the Insti tute to improve the

quality of services and adherence to the various statutory

and other regulatory requirements.


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Chapter VIII - Dissolution of the Actuarial Society ofIndia Registered Under the Societies Act

On the appointed day, the Actuarial Society of India shall stand

dissolved.

Every persons employed in the dissolved society and continuing

in its employment immediately before the commencement of the

Act shall become an employee of the Institute.


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Chapter IX - Miscellaneous

Where an actuary in practice or a firm of such actuaries has more

than one office, each one of such offices shall be in charge of afellow member of the Insti tute.

The Council may in suitable cases exempt any Actuary in practice

or firm of such Actuaries from the operation of the aboveprovision.

The Central Government may, by notification, make rules to carry

out the functions of the Act.

The Council may, with the previous approval of the Central

Government make regulations to carry out the provisions of the

Act.


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The Schedule

Part I - Professional misconduct in relation to members of the

Insti tute in practice.

An Actuary in practice shall be deemed to be guilty of

professional misconduct, if he :

- allows any person to practice in his name as an actuary

unless such person is also an actuary in practice and is in

partnership with or employed by himself;

- if he pays by way of remuneration to an employee anyshare, commission or brokerage in the fees or profits of his

professional business;

- if he pays any share, commission or brokerage in the fees

or profits of his business to any person other than amember of the Institute;


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The Schedule

- if he enters into partnership with any person other than an

actuary in practice or if he enters into partnership with an

actuary resident outside India and does not share in the fees

or profits of the business of the partnership both within and

and outside India;- secures either through the services of a person who is not

an employee of such actuary or who is not qualif ied to be his

partner any professional business;

- accepts an assignment as Actuary previously held byanother Actuary without communicating with him in writing;

- charges or accepts in respect of any professional

employment fees which are based on percentage of profits

or which are contingent on the findings or results..

- .


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The Schedule

The other items in this Part are relatively simple.


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The Schedule

Part II - Professional Misconduct in relation to the members of the

Insti tute in service.

The acts of misconduct covered in the Part are:

- paying/allowing/ agreeing to pay directly/indirectly any

share in the emoluments of the employment;

- accepting/ agreeing to accept any part of fees/profits/

gains by way of commission;

- disclosing confidential information acquired in the courseof employment except when required by law.


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The Schedule

Part III: - Professional misconduct in relation to members of the

Insti tute generally.


- giving particulars to the Council knowing those to be false

- acting as a fellow member when not being a fellow

member;

- not complying with the requirements asked by the

Council;- contravening any pf the provisions of the Act or

regulations made thereunder or guidelines issued by the

Council

- guil ty of any other act as may be specified by the Council.


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The Schedule

Part IV:- Other misconduct in relation to member of the Institute

generally.


- being held guilty by any civil or criminal court which is

punishable with imprisonment;

- member, in the opinion of the Council, bringing disrepute

to the profession.


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Thank you

actuaries act 2006

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