The Institute of Actuaries of Australia ABN

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1 Fire Services Funding Review C/- Department of Treasury and Finance 1 Treasury Place East Melbourne fireservicesproject@dtf.vic.gov.au Dear Sir/Madam Fire Brigade Funding in Victoria The Institute of Actuaries of Australia (the Institute) is the sole professional body for actuaries in Australia. It represents the interests of over 1,700 Fellows and 2,000 other members. Our members have had significant involvement in the development of insurance regulation, financial reporting, risk management and related practices in Australia and in Asia over many years. The Institute considers that there are significant flaws in the existing structure whereby fire services are funded. The Institute does not accept one of the key reasons offered in the Green Paper for retaining the current system (that is, Option 1), being that insurance premiums provide a direct relationship to the risk of a fire and the level of damage caused and therefore the cost of fire services. The Institute considers that there is no clear relationship between the level of insurance premiums and the cost of providing the fire services. We consider that this lack of relationship substantially weakens the case for an insurance based model. The practicalities are that insurance premiums are based on a number of commercial and risk factors, of which fire is one. The proportion of premium allocated to fire risk is based on the level of benefits (e.g. sum insured) and type of cover under the policy. The cost of fire services is not taken into account in the premium. An example set out in Attachment A highlights the difference between insurance risk and cost of fire services. The Institute considers that an alternative fire services funding structure should be investigated. The fire services funding structure should fund the risk and cost of fire services, rather than the risk and cost of fire damage (being the focus of the existing funding structure). The Institute of Actuaries of Australia ABN Level 7 Challis House 4 Martin Place Sydney NSW Australia 2000 Telephone Facsimile actuaries@actuaries.asn.au W eb site:

2 Fire Services Funding Review July 2010 The Institute s position is that careful consideration should be given to the details held by the MFESB and CFA relating to each call out and an analysis of historical data as this would provide significant insight into the nature of fire service call outs and the variation in associated costs. Further, a considerable proportion of the fire services relates to community programs and education. These costs should either be spread evenly over the population or costs targeted at those who benefit from such programs. Of the seven options set out in the Green Paper, the Institute considers a property based levy with some recognition of fire risk factors in conjunction with government and council contributions (Option 6) to be most appropriate, albeit not ideal. We would prefer alternative options to be considered and that a model that incorporates funding from the majority of potential beneficiaries of fire services and which is based on the cost of providing those fire services be adopted. Further details of such a funding basis are provided in Section 4 of this submission. The Institute would be pleased to discuss the issues raised in this paper or to respond to specific questions to assist the Government develop the White Paper due to be released within six months of the issuance of the final report from the Bushfire Royal Commission. In this regard, please do not hesitate to contact our Chief Executive, Melinda Howes on (02) Yours sincerely Barry Rafe Senior Vice President Cc Jacqueline Bastiani (Jacqueline.bastiani@dtf.vic.gov.au)

3 Institute of Actuaries of Australia Submission to the Fire Services Funding Review : Victoria 1. BACKGROUND AND STRUCTURE In October 2009 the Victorian Government issued a Green Paper titled Fire Services and the Non-Insured. The Green Paper called for submissions responding to a range of questions and potential funding options regarding the basis for funding Victoria s fire services. The IIAust welcomes the opportunity to contribute to the discussion about the most appropriate basis for funding fire services. At the time of writing a number of papers have already been submitted in response to the Green Paper. We refer to some of those submissions throughout this paper with the aim of expanding or clarifying comments as well as aiming to limit the level of duplication between this and other submissions. Terms and abbreviations are consistent with the Green Paper unless otherwise stated. This submission is set out in the following sections: Section 1 Background and Structure Section 2 Fire Services, Fire Risk and Insurance Section 3 Factors to Assess Funding Options Section 4 Green Paper Funding Options Section 5 Measurement of Fire Risk Factors. 2. FIRE SERVICES, FIRE RISK AND INSURANCE 2.1 The Fire Service The primary function of the Victorian fire services is to extinguish and prevent fires on private and public property in Victoria. Other functions include community education and risk mitigation in relation to fire risks. The fire services are provided to the whole community irrespective of whether contributions to the funding of the costs of the fire service through some post service charges are made at the discretion of the authorities (and we understand this is rare for individual insureds). The provision and level of fire service is not differentiated in the community between any group, individual, business or level of contribution. It is a function of the perceived risk, resources and infrastructure available to provide the fire service, which tends to be closely related to the population within each region. 2.2 Fire Services and Fire Risk In theory, the provision and availability of fire services should relate to the level of fire risk. The higher the level of fire risk, the greater the level of fire services that would be expected to be required. Here risk represents the combination of both the frequency (i.e. number of fires) and the severity of fires. Institute of Actuaries Page 3

4 A number of factors can be used to assess the cost and level of fire risk for properties. For example: geographical location of the property; usage of property; fire risk hazards on property; level of fire risk prevention on property. The extent to which these factors could be used in determining the cost and level of fire services is likely to be limited, unless extensive data is collected in relation to each property throughout the State. In practice, such an exercise is likely to be prohibitively expensive. 2.3 The Insurance Premium Nearly all insurance policies that include cover for losses as a result of a fire, also cover losses caused otherwise. Most insurance policies that cover fire losses also cover a range of other perils, for example, storm/weather, burglary/theft, wilful damage, accidental damage, public liability, and business interruption. Hence, the insurance premium calculated and charged by insurance companies is a function of a number of factors, and only some of these factors would also influence the cost of fire services. The extent to which these factors are recognised and taken into account varies significantly between insurers. These aspects of underwriting and pricing of insurance policies have been covered in the witness submission WIT _R by David Whittle to the Bushfire Royal Commission. Mr Whittle s submission provides a summary of the proportion of an insurance premium that relates to fire risk. The key observations relate to Figures 2a and 2b in the submission. Figure 2a shows the proportion of premium (excluding fire services levy, stamp duty and goods and services tax) that, on average, relates to fire risk (excluding bushfires). Figure 2b summarises the average proportion of premiums estimated to relate to bushfire risk (the reinsurance component represents the cost of reinsurance for bushfire risks). Adding the proportions shown in Figures 2a and 2b shows that approximately: 20% of metropolitan buildings premiums reflect fire risk; 25% of country buildings premiums reflect fire risk; 7% to 10% of contents premiums reflect fire risk. The ratios above represent the proportion of premiums excluding charges. When considered as a proportion of the claims cost (or risk premium) they would be expected to be around 30% for metropolitan buildings policies, 40% for country buildings policies and 10% to 15% for contents policies. Thus, a relatively small proportion of the claims costs are directly associated with fire risks. Institute of Actuaries Page 4

5 The analysis of insurance premium and apportionment by risk to fire and bushfire as provided by Mr Whittle relates to the level of and type of coverage under the policies and not the cost of fire services. The cost of fire services would not be covered under insurance policies, as it is separately provided through the FSL loading in the policy. Further, the cost of a fire service is not directly related to the claims cost for an insurer. As an example, damage to the front of a small retail store may require the same service as damage to an equivalent building occupied as, say, a terrace house. However, the retail store could lead to a claim for business interruption and hence a considerably higher insurance cost. The insurance cost differs, even though the fire service cost might be the same in the two cases. For most companies, the sum insured is a significant factor in determining the amount of insurance premium. Sum insured and premium are directly linked such that increasing the sum insured will typically increase the premium (albeit not necessarily in a linear fashion). Analysis of claims costs has highlighted that sum insured makes up only around 25% of the relative difference in claims costs. Clearly, the amount of insurance premium is also linked to other risk factors. The relationship between level of coverage (i.e. sum insured) and other risk factors varies between insurance companies and types of policy. While the insurance risk is linked to the sum insured, the cost of fire services does not have the same level of linkage as highlighted in Example 1. Based on the details above, the Institute does not consider insurance premiums to be a good basis for determining the allocation of funding for fire services. 2.4 What is being Funded? The revenue being raised is applied to meeting the cost of providing fire services. It is the level of fire services that the community demands and expects that should be the driver in respect of the amount of revenue to be raised on a recurrent and nonrecurrent basis. Funding is therefore a balance between community expectations and the amount of revenue that can be raised and applied to the fire service. Consideration also needs to be given to the funding of expenditure for infrastructure (i.e. equipment, new stations etc.) and other projects. 2.5 Key Elements of a Fire Services Funding Model An optimal fire services funding model will consider the following factors: The need for pre-funding. It seems unlikely that a model of funding fire services on a pure user pays basis would be sustainable, given the substantial charge that would need to be imposed for each call out, as well as charges for community education programs; Institute of Actuaries Page 5

6 An element of community rating. Fire services are available to each individual and business in the same region at the same level. Fire services are provided at the level required (subject to availability), regardless of the extent of contribution to the cost of fire services. As a result, the cost of fire services should be spread across the community; Appropriate differentiation between fire risks. Some properties will be more prone to the chance of a fire than others and some, due to size or content (for example), will likely require more fires services should a fire occur. There is a need to differentiate the fire service charges to reward those applying appropriate fire prevention practices, as well as imposing a penalty on those who apply poor practices; Consideration of the nature of fire services. Not all fire services relate to fighting fires in buildings or on properties. A considerable proportion of fire services relate to attending motor vehicle accidents, providing fire safety education and community awareness programs; The need for exceptions. There will be some individuals who are not in a financial position to contribute to the funding of the fire services; Ease of use. It is not desirable to develop a complicated method for the collection of fire service contributions. As such, any model should be practical to implement, the cost to each individual/business should be reasonably straightforward to calculate, and the collection of contributions should be cost effective. The elements above have been used when considering the reasonableness of the funding options proposed in the Green Paper. 3. SUMMARY OF FUNDING OPTIONS Attachment A provides a relatively detailed summary of the various elements of the funding options presented in the Green Paper. The highlights and conclusions are summarised in this section, as are some potential alternatives/extensions. Option 1, retaining the current approach, meets few of the key elements highlighted in Section 2.5 and is, in the Institute s view, an unattractive option. The current approach does not adequately spread the cost of fire services amongst the beneficiaries, and insurance premiums are not a good reflection of fire risk, let alone of the relative cost of fire services. Option 2 (charging a levy on non-insured and underinsured property owners) has some attraction on a theoretical basis, but is unlikely to be practical or readily implemented. Identifying under-insured properties would either require an audit of each property, or could only be done after the event. Identifying non-insured property owners would require a register for proof of insurance. Whilst this could be achieved via a linkage with council rates, implementation may not be straightforward. Option 3 (status quo plus mandating banks to issue compulsory insurance) adds little to the current approach. While expanding the base of contributors, the expansion is likely to be limited, and will fail to include property owners without a mortgage and those renting properties who do not have contents insurance. Option 4 (introducing compulsory fire services insurance) would require each property owner to have fire services insurance. This is an attractive option meeting Institute of Actuaries Page 6

7 many of the factors set out in Section 2.5. The key issues to address relate to the manner in which premiums would be rated, and how they would be collected. Option 5 (introduction of compulsory property insurance) is an extension of Option 4 and arguably less attractive as it ties the fire service contribution to insurance premiums which, as we have discussed above, are not directly correlated to the costs of providing fire services. Collection of premiums could be simpler via insurance companies however there would be a need to ensure individuals have taken out insurance potentially via a similar system to Green Slips for CTP in New South Wales. Option 6 (replace the FSL with an across the board property tax) is an attractive option given the breadth of contributors and an expectation that it would differentiate based on the cost of providing fire services. Other jurisdictions have implemented such approaches and, while requiring a significant change for implementation, is not unsurmountable. We note, however, that property value itself is not a good proxy for differentiating fire service costs, and that this approach does not take account of the fire services provided to motor vehicle owners. Option 7 (require mandatory collection of costs from non-insured by the CFA and MFESB) is unlikely to enable collection of significant additional revenue, given that the it would be expected that a majority of the non-insured are not insured because they have insufficient funds to do so hence it is unlikely that they will have sufficient assets to pay for the cost of the fire services once the assets they have are burnt down. Of the options provided in the Green Paper, Option 6 meets the most of the key elements set out in Section 2.5. Even so, the Institute considers that there are alternatives which could provide a similar, but more equitable, outcome. 4. MEASUREMENT OF FIRE SERVICES RISK FACTORS The funding of fire services should relate to the manner in which the services are provided. As a result: Property owners, as the main beneficiaries, should contribute a large proportion of the funds; Vehicle owners should contribute funds to reflect the considerable proportion of services related to motor vehicle accidents; and, Community organisations and/or government bodies should contribute in so far as they benefit from the community services that the fire services organisations provide. As such, we consider that the fire services should be funded via a range of sources. Figures have been quoted that around 10% to 15% of services are provided to motor vehicle owners (as noted in submission to the Bushfire Royal Commission by Counsel Assisting). Thus, around 10% to 15% of fire service contributions should be contributed by motorists. If these costs were added to vehicle registrations, the increase would be around $20 per vehicle per annum. The collection of these contributions should be straightforward as part of the registration process, with VicRoads simply adding an advised amount to vehicle registrations. Education and community awareness programs benefit the whole community, and are arguably best funded via government funding. Requiring community groups to pay would possibly result in them avoiding such programs. Institute of Actuaries Page 7

8 The allocation of contributions amongst property holders can be argued to be either risk-based (i.e. those most likely to call on fire services should make higher contributions), community rated (i.e. a (relatively) flat cost charged to all property owners) or a combination of the two. Ultimately, a risk-based allocation is complicated by a range of factors: identifying the appropriate factors to rate by and charging the appropriate premium (e.g. how will properties in bushfire prone areas be identified and how will those that have implemented fire mitigation strategies be differentiated from those that have not?) who will collect the premiums the more refined the contribution allocation, the more complicated the required rating structure and, therefore, the more effort required to collect the correct contributions fire services are a community service and should be available to all citizens. There may be a need to spread the high costs of some individuals across the whole pool. The fire services authorities are able to collect data regarding the services they provide. It should be possible to use this information to create an allocation of contributions that reflected risk. That said, a considerable history of data would be required given the low frequency of fires (i.e. low number of fires per property) before detailed risk allocation could be carried out. The cost of fire services is likely to be much the same for broad segments of the community. The cost to service most houses across a particular suburb is likely to be very similar. Further, the cost to service businesses is not directly linked to the value of the property. Example 2 provides a basis for this reasoning. Example 2 Consider two businesses a local fish and chip shop and a Myer department store. The property value of the fish and chip shop will be a fraction of the value of the department store and, using a property value-based levy it would therefore have significantly lower fire services contributions. But what about the provision of fire services? The probability of a fire at the local fish and chip shop could be quite high, especially if it is not properly maintained. The department store is likely to have sprinkler systems and fire prevention procedures to minimise the chance of a fire occurring. Should a fire occur, the number of units required to extinguish the fire could be same; but would typically be expected to be more for the department store due to its size. Most fires at the department store, however, would be expected to be minor. It is not clear that the average cost of fire services (i.e. probability x size) would be different between the two businesses. It could be that the probability of a fire at the fish and chip shop offsets the additional attendance cost for the department store. Some elements of rating might be considered desirable, but this may be limited to broad factors such as ranges of capital improved value and location (in regions). These would be applied at quite general levels and would be readily identified. The South Australian model follows this type of approach (although it does differentiate more by property value than we would suggest is reflective of the cost of fire services). Institute of Actuaries Page 8

9 Overall, the Institute considers that a model that incorporates funding from the majority of potential beneficiaries of fire services, and which is based on the cost of providing those fire services, should be adopted. Such a model would include a charge against motorists, contributions from Government and a levy on properties that would result in a fixed fee across broad ranges of properties. The property-based levy could be designed following an analysis of historical fire service call outs and details of all properties (as obtained by the SRO) to determine the extent of differential pricing to be applied. Institute of Actuaries Page 9

10 ATTACHMENT A This example highlights the difference between insurance risk and cost of fire services. Example 1 Consider two neighbouring houses. House A is a 1940 s weatherboard that has not been materially altered since construction. House B is a recently constructed double brick house with electronic smoke alarms fitted. House A has a building value of $150,000 while House B has a building value of $600,000. Assuming all other risk factors are the same (e.g. same type of building occupation), the building insurance premium for House A is likely to be less than for House B (a single online quote indicated a difference of 20%, though quotes can vary significantly across insurers). The current basis for collection of fire service levies would see House B contribute more than House A. But what about the provision of fire services? The probability of a fire at House A would be expected to be higher than for House B older building (and wiring) and timber construction. If a fire occurred would the number of units required differ? Presumably the timber house would require more work to extinguish the fire. Thus, House A has a higher probability of using the fire services and, arguably, a higher cost of service once called upon. In other words, House A has a higher expected cost of fire services than House B. This example clearly shows that the cost of fire services and insurance risk are not necessarily closely aligned. Institute of Actuaries Page 10

11 ATTACHMENT B GREEN PAPER FUNDING OPTIONS A.1 FACTORS TO ASSESS FUNDING OPTIONS The Green paper presents seven funding options for consideration. In Section A.2 we comment on the options as they relate to selected criteria for comparison and assessment. The selected criteria are as follows:- 1. Equity Equity is achieving fairness between the services received by individuals or groups from Fire Services, compared to the level of cost paid for these services by individuals or groups. This will also take into account the levels of fire risk, and so the likelihood of requiring Fire Services. By taking some account of the level of fire risk, there may then be a positive incentive to reduce fire risks. The equity of funding options can also be considered compared to that for other essential services (such as police or ambulance). 2. Efficiency to Administer The calculation of the fee should be straightforward, and easy to understand. The collection of fees should also be cost effective. The required audits to ensure the fee is being calculated and collected correctly should also be cost effective. The calculation basis should also be able to exclude those who financially are unable to make monetary contribution. It may also be desirable to provide offsets for those who provide volunteer fire services. 3. Transparency Ideally, being able to link the source of revenue with the costs spent on funding fire services will provide transparency to the community of providing such a service. This may increase the community acceptance of the need to collect fees, as well as assist in providing accountability on the cost and type of service being provided. 4. Transitional Costs Changes to a new system minimise transitional costs and also not impact on the revenue for providing the fire services on a continuing basis. 5. Revenue Stability The level of fees collected each year should remain fairly stable and predictable to ensure consistency and continuation of services. Institute of Actuaries Page 11

12 A.2 ASSESSMENT OF GREEN PAPER FUNDING OPTIONS A discussion of each option as taken from the Green paper follows: Option 1: Retain the existing approach For those insured, the current insurance based funding model is that the FSL reflects asset value and risk, including fire risk. Insurance companies provide expert actuarial advice on the fire risk of individual policies on different types of properties. Equity Beneficiaries from Fire Services include property owners (both individuals and commercial) regardless of their level of insurance (or underinsurance or no insurance) vehicle owners broader community for example a business that is destroyed by fire could mean the loss of jobs in the community. Equity is perceived as not being achieved as some of the beneficiaries do not make a contribution or make a limited contribution. Property owners that are policy holders are perceived as making a disproportionate share of the funding. The balance of the contribution is made by the broader community through local and state governments. Property owners with no insurance do not contribute and property owners with under insurance make a lower contribution. There is also the question of equity between policyholders and the level of charge by the insurance companies for the fire services. For example two houses in the same street in the event of a fire can expect to receive the same level of fire service and therefore expect to pay a similar amount to the cost of providing the fire service. However if the insurance premiums are different because of sums insured then the level of payment for the fire services will also be different. Vehicle owners receive a benefit but make no direct contribution thereby adding to the level of inequity. Equity also considers the relationship between the level of contribution compared to the fire risk. Fire risk is one of a number of factors that contribute to the overall insurance premium, as discussed in the main body of this report. It is not considered an equitable basis for allocating the cost between commercial and individual policyholders. Transparency There is not a clear link between the main revenue source from insurance companies and the expenditure. Furthermore there is no visible accountability of the revenue raised from the insurance sector against what is spent on fire service costs. Revenue Stability The main revenue source is a charge by the government on the insurance sector to meet the budgeted requirements for fire services. This is certainly a stable source as the insurance sector has been able to pass on the cost to the policyholders by a Institute of Actuaries Page 12

13 loading in the insurance premium. However this adds to the cost of insurance and may make insurance less affordable. This may be a contributing factor to non and under insurance coverage The fire service levy percentage has been changed over time, when the underlying insurance premium base has changed, or when costs have increased at a different rate to the insurance premium base. Efficient to Administer Most of the cost of the revenue collection is met by the insurance sector and therefore from the government view is simple and cost effective. However, there is a cost to insurance companies to administer as well as adding to the complexity of collecting premiums. Option 2: Charging a levy on non-insured and underinsured property owners Property owners who do not insure or adequately insure their properties above a statutory amount would be charged a levy which would have the dual purpose of providing an incentive for people to insure their properties and spreading the burden of fire services funding. This would ensure that those who choose not to insure are still making a contribution to the costs of the fire services. As for option 1, but attempts to improve equity by sourcing additional levies from property owners that are not insured or are under insured. Such an extension would require the identification and assessment of non or under insurance and then enforcing compliance. As the levels of non and under insurance are not accurately known, it is not possible to assess what additional revenue might be raised. The logistics and administration cost of such a proposal may make this impracticable. Fire Risk Factors- As for option 1 Transparency- As for option 1 Revenue Stability- As for option 1 Efficient to Administer - As for option 1 with added cost in respect of non and under insured policyholders. Option 3: Status quo plus mandating banks to issue compulsory insurance Banks would be asked to state that property owners must establish and maintain property insurance as a condition of their mortgage. Banks would check this annually to ensure compliance. Currently, most banks require mortgage holders to insure their property for the first year of the mortgage only. As for option 1 with improving equity by banks being asked to check on insurance if they hold a mortgage. This has similar shortcomings to option 2 as well as involving the banks with additional administrative work. As for previous models, does not capture all beneficiaries such as non or under insurance if no bank mortgage. The definition of a bank, as opposed to other mortgage providers, needs to be defined. Institute of Actuaries Page 13

14 Fire Risk Factors- As for option 1 Transparency- As for option 1 Revenue Stability- As for option 1 Efficient to Administer - As for option 1 with added costs to banks in respect of non and under insured policyholders. Option 4: Introduce compulsory fire services insurance Every property owner would have to take out fire services insurance. The Victorian Government could mandate that fire services insurance is compulsory and could be offered by insurance companies. Proposes the introduction of compulsory fire services insurance on property owners to be offered by insurance companies. Insurance companies would merely be acting as agents to collect revenue to pass onto the government for the funding of fire services. Equity- Improves the level of equity as all property owners would be making a contribution. The option does not take into account vehicle owners. Transparency- May provide a greater level of transparency as it would link property owners to fire services. Efficient to Administer- Insurance companies would be required to administer the collection of premiums. A fire service risk rating basis would require to be developed to calculate the insurance premium to fund the fire services. Some issues would need to be addressed to ensure this option was cost effective, such as: How does this constitute insurance? What is being insured? Why is it not similar to a levy or tax on property owners? How and by whom is the premium to be determined? Option 5: Introduce Compulsory property insurance All property owners would have to take out property insurance offered by private insurance companies and the current FSL approach would be maintained. Similar to health care if private health insurance is not taken, a penalty applies, regardless if access health services. Equity- Could be seen as more equitable both for public and compared to funding for other essential services. The option does not take into account vehicle owners. Transparency- May provide a greater level of transparency as it would link property owners to fire services. Institute of Actuaries Page 14

15 Efficient to Administer- Greater detail is needed on the level of sum insured or cover (building versus contents). Variations on this theme would be to make a sum insured to cover fire services compulsory. Complexity will depend on the level of tailoring fees to individual risks/sum insured. Options to minimise costs of collection and audit would be to make this a compulsory charge collected as part of local council rates. In a similar fashion, changes have recently been made to rural areas to pay a water levy, regardless of whether mains water is provided, to pay for the costs of maintaining waterways. May be an administration cost to insurance companies for acting as a collection service for a government fee. Option 6: Replace the FSL with an across the board property tax A levy would be imposed on property values to replace insurance companies statutory contributions. The rates would be set at appropriate levels for the residential and commercial sectors and for regions based on risk. This would maintain the current FSL collection shares. This is a similar option to 5. An across the board property tax could be seen as similar to the ambulance membership a contribution is made to help fund the service, regardless of whether the service is required, and then the service is provided without additional charge. There is a risk of complexity depending on the basis being used to calculate the level of property tax. Option 7: Require mandatory collection of costs from non insured by the CFA and MFESB This option would remove the MFESB and CFA discretion to waive costs in the event of a callout to a non insured property. This is similar to how the ambulance service works, with certain people excluded from this cost on social and financial bases. It is expected these costs are collected on individual properties when a small fire or service is required. However fire services in a large event such as Black Saturday may be difficult to allocate across properties, for example when the service is providing a response across a number of properties. The emotional and financial issues involved with large scale fire events may make this impractical to collect. This option also does not provide benefits to the community through education, minimisation of risks, and fire awareness before the event. It assumes the services have been funded and are available as and when required. People who do not require the service do not pay a contribution for the benefit of the infrastructure being available. Institute of Actuaries Page 15