Law Summary
Overview of Section 338 of the Insurance Code
This section of the Insurance Code outlines the fit and proper requirements for actuaries in the insurance industry, specifically addressing their service limitations and conditions under which they may serve multiple employers.
- Legal Principle: No accredited actuary is permitted to serve more than one client or employer simultaneously.
- Purpose: To prevent conflicts of interest and ensure the integrity of actuarial services in the insurance sector.
Conditions for Serving Multiple Employers
An actuary employed by an insurance company may be permitted to serve another entity under specific conditions.
Key Conditions:
- The engagement request must be submitted in writing by the prospective employer.
- The actuary’s current employer must provide written acquiescence to the engagement.
- Copies of both the engagement request and the acquiescence must be submitted to the Insurance Commissioner.
Important Requirements: • Request for engagement must be in writing. • Written consent from the current employer is required. • Documentation must be submitted to the Commissioner.
Prohibition on Concurrent Roles
To mitigate any potential conflicts of interest, certain restrictions are placed on the roles an actuary can occupy.
Prohibition: An actuary cannot serve as a director or executive officer of any insurance entity or mutual benefit association concurrently while serving as an actuary.
Important Details: • This provision aims to maintain impartiality and objectivity in actuarial evaluations.
Compliance and Enforcement
Strict adherence to the outlined requirements is mandated to ensure compliance with the provisions of the Insurance Code.
Compliance: Failure to adhere to the stipulated conditions may result in penalties or disqualification from serving as an actuary.
Consequences: • Non-compliance may lead to disciplinary action by the Insurance Commissioner.
Adoption and Implementation
The provisions contained within this circular were adopted to provide clarity on the roles and responsibilities of actuaries within the insurance industry.
- Adoption Date: September 18, 2009
- Authority: Signed by Eduardo T. Malinis, Insurance Commissioner
Key Takeaways
- Actuaries may not serve multiple employers simultaneously unless specific conditions are met.
- Written requests and consent from current employers are essential for compliance.
- Actuaries are prohibited from holding concurrent roles as directors or executive officers within insurance entities to avoid conflicts of interest.
- Strict compliance is necessary, with potential penalties for violations of these provisions.