Fourth Meeting of the Actuarial Profession in CEE, Budapest, September 30 - October 2, 2000

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1 1 A presentation at the Fourth International Professional Meeting of Leaders of the Actuarial Profession in Central and Eastern Europe Budapest, by Gábor Hanák, Member of the Executive Board of the Hungarian Actuarial Society

2 2 After about 40 years of non existence of the profession, the Hungarian Actuarial Society (HAS) was established in 1991 by 36 founding members after an introductory eight-day course was organized jointly by the Budapest University of Economics and the Institute and Faculty of Actuaries

3 3 Main objectives of HAS were set in 1991 as fostering and spreading professional fastidiousness and the culture of insurance mathematics in the insurance business; creating and running a professional forum, providing self-instruction for the members; having the actuarial profession widely acknowledged; representing and safeguarding the professional interests of the Society and that of its members;

4 4 Main objectives continued: participating in organizing professional training; developing the standards of qualification and adjusting those to current requirements; comment the legislation and jurisdiction affecting the actuarial profession, having these opinions acknowledged; establishing and maintaining international professional relations; exchanging experiences.

5 5 Diploma Courses organized jointly by the Budapest University of Economics and the Institute and Faculty of Actuaries Two basic level courses in 1991/1992 and in 1993/1994 One advance level course in 1994/1995 Diploma issued by the Budapest University of Economics, endorsed by the Institute and Faculty of Actuaries, in 1998 for 21 Hungarian and 2 Croatian examinees

6 6 General Meeting Memorandum of Association Rules of Organisation and Operation Code of Ethics Election of officers President max two two-year periods Executive Board two-year periods President and four Members Fourth Meeting of the Actuarial

7 7 Committees Ethics (professional conduct, disciplinary procedures) Qualification Harmonization Task forces Opinion on draft legal rules (laws) Work out the issuance of Statement of the Society

8 8 Regular events Seminars jointly organized with Eötvös University of Budapest New Year Dinner Annual three-day Symposium Monthly club meetings

9 9 Ordinary members (129) Admittance by recommendation of two old members New member has to be involved in actuarial activity No actuarial qualification required Honorary members (1) Supporting members (0)

10 10 Employees: 120 Insurance companies: 75 Life: 60 General: 15 Pension schemes: 8 Social security: 6 Supervisory Authority: 7 Academics: 20 Other: 14 (Beware of overlaps!)

11 11 Consultants: 19 Insurance: 10 Life: 6 General: 4 Pension schemes: 3 Social security: 1 Supervisory Authority: 5 (Beware of overlaps!)

12 12 Practice at a market player Most of the insurance companies and pension funds are controlled by big multinationals Training at the Diploma Courses Continuation of the Diploma Courses Undergraduate courses (Other issues related to education shall be discussed on October 2) Fourth Meeting of the Actuarial

13 13 Functions required by law Chief Actuary of an insurance company Valuation (liabilities only) Minimum solvency margin Distribution of investment yield, life only Pricing Adequacy, completeness and consistency of the data Adequacy of the methods

14 14 Functions required by law Chief Actuary of a pension fund Planning, valuation (liabilities only), reporting Terms and conditions Contracts with insurance companies Adequacy, completeness and consistency of the data Adequacy of the methods

15 15 Adequate university degree Consult-level specialized qualification does not exist Five-year experience No criminal record Employment Good business reputation

16 16 Functions required by the market players beyond the legal requirements Product development Budgeting, planning, and forecasting Embedded value calculation Marketing Reporting

17 17 A draft has been worked out by HAS Requirements are based on the syllabuses of the IAA and the Groupe Consultatif Separate qualification for life and pension, for non-life, and for general actuaries There are four written exams in a total of 17 fields and one practice exam where a thesis has to be defended

18 18 Hungary is an associate member of the EU seeking for full membership Harmonization of various legal documents has been and planned to be carried out HAS is a donation member of IAA HAS applied for full membership in IAA HAS applied for associate/ observer membership in the Groupe Consultatif

19 19 Code of Ethics Application for full IAA membership and associate/observer membership in the Groupe Consultatif The proposal of HAS on qualification has been adjusted to changed IAA and Groupe Consultatif syllabuses Pension funds have become much stronger Fourth Meeting of the Actuarial

20 20 Bring to life state acknowledged qualification of actuaries, hence qualified actuaries in Hungary Participate in law making Creating professional standards for Hungarian actuaries Integration the profession into that of the EU